Taken from NJ.com
By Deborah Smith-Gregory – Opinion
August 21, 2020
University Hospital in Newark was front and center as the premier academic medical center responding to the COVID-19 pandemic. The hospital performed the function it always has for our state: it cared for and treated everyone who walked in through the door.
In a community largely made up of people of color, which was also disproportionately affected by COVID-19, University Hospital struggled yet rose to the challenging demands to continue to serve its mission of caring for all patients. At the height of the pandemic, every inch of the hospital was turned into COVID-19 units and tents were built out in the parking lot to triage symptomatic patients.
Unfortunately, the revised FY2021 Budget continues to exacerbate the hospital’s financial frailty and, as a result, undermines the healthcare of Black, brown, uninsured, and underinsured people in our state. In addition to New Jersey’s approximately 640,000 uninsured residents, another 124,000 have lost insurance due to job loss during the pandemic. University Hospital treats a large portion of those uninsured patients, relying on charity care to make up some of the revenue lost.
Because it is charged with treating the sickest with the least ability to pay, the hospital lost millions in federal funding due to the CARES Act allocation formula, which relied on 2018 revenues. For a public health facility like University Hospital, where 73% of all revenue comes from healthcare subsidies such as Medicare and Medicaid, the reimbursement rate is a fraction of what private insurance pays, lowering overall revenues for the hospital.
While University Hospital has to subsist on mainly Medicaid, Medicare, or charity care, private hospitals can tap into better-resourced patients who have private insurance with reimbursement rates that are at least twice as high. To be generous, we can say the federal reimbursement formula had the unintended consequence of victimizing the hospital and the people it serves. Now, the State of New Jersey is poised to extend the pain in its proposed budget.
As New Jersey’s only public health hospital, University Hospital stepped up admirably in caring for patients during the pandemic and yet is recommended for a cut in appropriations. Our state legislators weighing funding priorities need to determine whether the cut in funding is fair and equitable. We assert that it is not. Total state aid to the hospital has decreased by $11.5 million since 2014, while treating almost 100,000 patients in its Emergency Department each year. University Hospital deserves more to ensure the viability our state’s premier public health institution.