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Vitale ‘Health Care Stabilization Fund Act’ Approved By Budget Committee

TRENTON – A bill sponsored by Senator Joseph F. Vitale which would establish the Health Care Stabilization Fund to provide grants to general hospitals and other health care facilities to ensure access to health care services in a community served by a hospital facing closure was approved by the Senate Budget and Appropriations Committee today by a vote of 9-5.

“For so many uninsured New Jerseyans, hospitals are the frontline in health care access,” said Senator Vitale, D-Middlesex, and Chair of the Senate Health, Human Services and Senior Citizens Committee. “But due to the skyrocketing cost of care and other financial factors, we’ve seen many hospitals, unable to remain economically solvent, closing down in areas where they’re needed most. The Department of Health needs some emergency mechanism to ensure that residents are not put in jeopardy when their local health care facility files for closure.”

The bill, S-1978, known as the “Health Care Stabilization Fund Act,” would create a fund in the Department of Health and Senior services, and would authorize the Commissioner of Health to make emergency grants from the fund to maintain access to essential health care services for a community facing a hospital closure due to financial distress. The bill would require the Commissioner to consider certain factors before awarding a grant, such as extraordinary circumstances threatening access to care in a community, the unavailability of funding from other sources, and the effects of a grant to stabilize access to essential health care services, such as emergency room access. The bill would require that any hospital receiving a stabilization grant would have to make changes in governance and business operations to continue providing access to services, and that the facility would be subject to State audits and oversight by the State Comptroller.

“The Health Care Stabilization Fund should be used on an emergency basis to ensure access to care while auditors and State officials help hospital administrators identify problems,” said Senator Vitale. “The ultimate goal is to get hospitals off emergency subsidies as quickly as possible, so that they can stand on their own as a valuable point of care for the community. By tying emergency funding to audits and increased State scrutiny, we can do far more for health care in a community than if we just wrote a blank check.”

The bill comes as a recommendation of the Reinhardt Commission on Rationalizing Health Care Resources, which was empanelled by Governor Corzine to look at issues affecting health care facilities and make recommendations to stabilize the industry. Eighteen hospitals in New Jersey have closed since 1992 – many in urban areas, catering to the needs of uninsured State residents living in these cities. Senator Vitale noted that in addition to ensuring a healthy business environment for New Jersey hospitals, the State must look at other ways to promote care for those in need.

“New Jersey’s health system is in crisis, and we need to look to alternate ways of meeting the health care needs of our State’s residents,” said Senator Vitale, who also authored a plan to move towards affordable health care for all New Jerseyans. “For too long, New Jersey’s hospitals have been asked to shoulder the responsibility of care for the uninsured without adequate reimbursement, and now we’re starting to see the cracks. Hospitals are an important part of our State’s health care safety net, but if any sustainable health care system must be diverse, cost-effective and offer access to care for those in greatest need.”

The bill now heads to the full Senate for consideration.

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