A tale of two hospitals' bed tax efforts

Local hospital taxes are apparently a lifesaver in Arizona, but close to a non-starter in New Jersey.

In Phoenix, a local ordinance has helped draw an additional $272 million in Medicaid matching funds since it was implemented in late 2012, the Arizona Republic reported. The city also received another $29 million in funds to expand Medicaid access to 46,000 adults and children.

Officials expect the receipts to exceed $300 million by the end of the year--far higher than the $200 million originally estimated when the city passed the ordinance into law.

"Because of the recession, a lot of people lost their jobs, so there was a sharp spike in unemployment and people not covered by insurance," Phoenix Deputy City Manager Rick Naimark told the Republic. "There was a big increase in uninsured patients and this situation was putting our hospitals, the jobs they create and our healthcare system at risk."

The ordinance, which exempted public, speciality and children's hospitals from the tax, is set to expire at the end of the year. However, the expiration coincides with the expansion of the state's Medicaid program, which is expected to replace a significant amount of that drawdown.

Meanwhile, a proposal to use such a tax in New Jersey has failed to gain any significant momentum, New Jersey Spotlight reported.

An alliance of the Garden State's 16 safety net hospitals is pushing for the tax to make up a projected $29 million cut in disproportionate share hospital payments from the Medicaid program, as well as concerns that issues with the state's health exchange will cut into newly enrolled residents.

"The whole thought process was hospitals like ours would turn around and see all these people with insurance," said New Jersey Hospital Alliance Joseph F. Scott, who is also chief executive officer of LibertyHealth System. "Between what's happening with the exchange, (hospitals) getting people to understand why it's important for them to have insurance and this whole timing issue of getting the cuts before people are on the exchange, it could have devastating impacts on hospitals that serve the highest-need populations."

However, hospitals that do not serve safety net populations have indicated they are opposed to such a tax. A similar proposal failed in New Jersey back in 2006.

To learn more:
- read the Arizona Republic article
- here's the New Jersey Spotligharticle

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