Scroll Top

Following The Money In For-Profit Health Care

Transparency and accountability shouldn’t just be a “gotcha” gimmick used by opposing political parties in Trenton — it should be a bedrock principle of all of our politics and policies. The public’s right to know, for example, how we spend health care dollars and whether we put patient care first, before profits, seems a key principle to us.

That’s why consumer groups, health plans, health advocates and health care unions joined together recently to support our legislation that would require all hospitals – for-profit and not-for-profit — to report on finances and governance to the New Jersey Department of Health and Senior Services.

The legislation passed both the Senate and Assembly with strong bipartisan support this year. It’s now up to the governor, who has campaigned and governed calling for transparency and accountability in the use of public funds. We think this legislation epitomizes those principles, and hope he agrees.

We turn to our hospitals when we are most vulnerable, expecting that providing safe and effective care is their No. 1 priority. We count on our hospitals’ commitment to the health, safety and welfare of patients and communities, and we trust that our hospitals use their financial resources for our communities’ benefit.

Bergen and Hudson counties are home to five for-profit hospitals, and other not-for-profit hospitals from Essex to Salem counties have either been turned over to for-profit owners or managers or are in the planning stages.

Taxpayer-financed funding

Both for-profit and not-for-profit hospitals rely on taxpayer-financed funding sources such as Medicare, Medicaid and charity care. But not-for-profits, unlike their for-profit counterparts, are required to make extensive financial and governance disclosures to regulators and the public. Because for-profit hospitals are relying on taxpayer-financed funding sources, when these hospitals cut services and staff, their owners and managers are converting taxpayer dollars into personal profits.

This difference in accountability and transparency matters. Even with New Jersey’s laws on charity care, not-for-profit hospitals are held to higher standards, and are subject to stricter scrutiny in meeting health needs of a community. Not-for-profit hospitals are also accountable to the IRS and state attorneys general for operating in the public interest, with boards of directors that are held to at least minimum standards and remain true to their charitable mission, make public extensive financial disclosures, disclose and avoid conflicts of interest and provide documented community benefits.

When legislators and the governor make difficult decisions and debate budget priorities, how can we make the right decisions without complete and accurate information?

The Hospital Disclosure and Public Resource Protection Act would level the playing field. Even Moody analysts said “since non-profit hospitals are required to report these financials, this law would let them access better information to compete with for-profit competitors.”

Necessary information

Requiring this information should not prevent for-profit companies from operating hospitals in New Jersey, but it should give our elected officials, our regulatory agencies and our communities the information they need to determine whether our hospitals are spending our scarce health care dollars on providing care for our communities rather than profits for investors, and whether a for-profit hospital is devoting sufficient resources to maintain the hospital and its services.

Sen. Loretta Weinberg, D-Teaneck, is state Senate majority leader, and Assemblywoman Connie Wagner, D-Paramus, is deputy speaker.

Leave a comment