Measure Would Ensure Greater Transparency for Privately-Owned Hospitals
TRENTON – A bill sponsored by Senate Health, Human Services and Senior Citizens Committee Chairwoman Loretta Weinberg and Senator Sandra Bolden Cunningham which would require privately-owned hospitals to report more financial information to the public was approved by the health committee yesterday by a vote of 7-0, with one abstention.
“Even though a hospital is privately-owned, it may still derive a large part of its funding from the taxpayers,” said Senator Weinberg. “If these facilities are the recipient of taxpayer funds in the form of charity care reimbursement or Medicaid funding, the taxpayers have a right to know about their finances. This bill would create more public scrutiny of for-profit health care facilities in order to make sure that these hospitals are still living up to their responsibility to the patients they serve.”
“With the high cost of health care, hospitals should give health care consumers a full accounting of where their health care dollars go,” said Senator Cunningham, D-Hudson. “Whether the facility in question is for-profit, not-for-profit or State funded, people seeking to get a better look at the finances of their hospital have a right to do so. This bill reaffirms those rights for for-profit facilities which have historically not been held to the same tough reporting standards as other hospitals in the State.”
The bill, S-1468, would require that for-profit hospitals be subject to increased reporting requirements through their filings with the State Department of Health and Senior Services and through their local health departments of each municipality in which the hospital operates a facility. The bill would also require hospitals to post certain financial information on their Web site, including: audited financial statements for the past three years; unaudited statements for the current year; a list of payments for goods or services, including leases and rentals; a list of all compensation, including salaries, benefits, bonuses and deferred compensation, paid to each board member and officer of the hospital; whether the owners of the hospital maintain a business entity outside the United States that does business with the hospital; a list of any properties for which the hospital has claimed a tax abatement; a description of major facility expansion projects at the hospital; and if the hospital had surplus revenues for the prior fiscal year, the total amount that would be used for debt retirement, facility expansion or a reserve for operating contingencies.
“If we’re ever going to see the health care system in this country achieve a small measure of rationality, we have to be up-front with health care consumers about where the money goes,” said Senator Cunningham. “Giving the public a greater look at the finances of for-profit hospitals allows them to choose where they want to spend their money, and puts financial pressure on for-profits to put more funding into direct patient care.”
“Unfortunately, for-profit hospitals aren’t immune to financial malfeasance and bad business practices,” said Senator Weinberg. “However, because these hospitals serve the dual roles of business and health care provider, they have to be held to a higher standard of reporting and transparency for the people they serve. This bill would ensure that both regulators and the public at large get a better picture of hospital financing, no matter what the profit status of the facility may be, to ensure a more streamlined, more affordable health care system in the Garden State.”
The bill now heads to the full Senate for consideration.