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 today by a vote of 23-16, receiving final legislative approval.
“New Jersey’s hospital system is in crisis, and with every announcement of closure, hundreds if not thousands of uninsured State residents in the surrounding area are left to scramble as they lose their primary point of health care,” said Senator Vitale, D-Middlesex, and Chair of the Senate Health, Human Services and Senior Citizens Committee. “New Jersey’s hospitals, through the charity care program, are on the frontlines in terms of providing access to quality care for those without health insurance. We need a mechanism in place to ensure the continuation of access when hospitals are on the verge of financial collapse.”
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.
“Through this legislation, not only are we providing emergency funding to help continue hospital operations, but we’re also providing a level of accountability to the State in terms of how those dollars are spent,” said Senator Vitale. “The primary goal of emergency funding is to continue hospital operations so that the residents served by that hospital aren’t put in jeopardy of losing access to care. But through the accountability standards in the bill, we’re also ensuring that the money will not be wasted, and that hopefully, the hospital can begin to pull itself back from the brink of fiscal instability to stand on its own once again.”
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.
“Every closed hospital represents the shrinking safety net for uninsured residents in need, particularly in our State’s urban centers, where hospitals are absolutely vital points of care,” said Senator Vitale, who also authored a plan to move towards affordable health care for all New Jerseyans, the first phase of which was approved today. “There needs to be a better way to fund care for the uninsured, so that we’re not imposing too much of a burden on health care facilities and are getting the greatest value for our health care investment. In addition to keeping our hospitals afloat, we need to move towards a smarter system to meet the needs of the uninsured, so that we’re relieving financial pressure without throwing more money down the charity care black hole.”
The bill now Governor’s Desk to be signed into law. It was approved by the Assembly earlier today by a vote of 49-29, with one abstention.