Statement of John Bauer, RN and President of HPAE Local 5185 to the NJ Assembly Health and Senior Citizens Committee

December 5, 2019

Good Morning Chairman Conaway and the members of the Assembly Health and Senior Citizens Committee. My name is John Bauer, Registered Nurse and President of HPAE Local 5185 which represents 850 nurses, health professionals, technical, service, business, and clerical staff at CarePoint Health’s Bayonne Medical Center. On behalf of HPAE’s nearly 14,000 nurses and health professionals, thank you for the opportunity to address the issue of improving financial transparency and to urge you to vote in favor of A.5916, A.5917, and A.5918.

As a union, we appreciate Assemblyman Chiaravalloti taking the steps to introduce these important bills. As we continue to demand accountability of the for-profit owners of our hospital as they prepare to sell all three hospitals we urge lawmakers to ensure for profit healthcare corporations are held to the same standards as nonprofit healthcare companies.

The State Commission of Investigation (SCI) report released in March 2019 highlighted severe oversight problems within the CarePoint health system. The report stated, “SCI discovered a number of issues that the Department of Health (DOH) should be aware of as it develops new rules for ensuring effective scrutiny of hospital ownership, identifying and addressing conflicts of interest and other potential abuses, and providing for adequate financial disclosure and transparency in the public’s best interest.”

Greater enforcement of oversight and stronger regulations are needed to ensure hospital revenue is invested in care, not transferred to investors or other businesses relations as CarePoint has done. The $157 million transferred out of CarePoint hospitals for the benefit of the owners alarmed our union members, especially as CarePoint attempted to reduce staff levels and sent patients the highest charges in the nation while protecting the financial interests of the corporate owners.

In 2012, the NJ Legislature sent similar bills to Governor Christie’s desk, that would have created greater financial transparency of for-profit hospitals. That bill would have required all hospitals to disclose to DOH the same or equivalent information that nonprofit hospitals are required to submit to the IRS on Form 990. Then Governor Christie conditionally vetoed the bill, requesting that rather than make that requirement, the DOH report on the “need” for the requirement based upon the review of existing hospital financial reporting requirements.

As was noted in the SCI report, HPAE has a long history of questioning the financial and business practices of healthcare corporations. In addition to Bayonne Medical Center, HPAE represents 400 nurses at CarePoint Christ Hospital who have also experienced first-hand what happens when for-profit hospital owners are not held accountable.

The bills before you today will go far to enhance the Department of Health’s ability to help ensure the long-term adequacy and viability of hospitals by ensuring money is properly spent across the state. They also will ensure a proper understanding of hospitals’ financial statements to help the department and other state agencies, legislators and others make well-informed policy decisions regarding the amounts and types of state aid that should be allocated to hospitals.

These steps will enable better accessibility to financial transparency for the public and ensure the financial stability of NJ’s healthcare systems.

Thank you for the opportunity to participate in the much-needed strengthening of hospital financial oversight.