NJ hospitals in dire straits after charity budget cuts

While hospitals in every state are struggling to fund charity care and bad debt, things in New Jersey are particularly bad. Not only does the state have 1.3 million people without insurance--and a law in place requiring hospitals to treat anyone who visits--but also, the state now faces major cuts in the funding that paid for these impoverished patients. Gov. Jon Corzine (D) recently signed a state budget that cut $111 million from the charity care fund. Now, hospitals that were already struggling are facing even worse problems.

Hospitals say that the stage was set for the hospitals' financial weakness well before the charity cuts, in part due to patients cherry-picking from ambulatory surgery centers. Now, with half of the state's hospitals operating in the red, observers and hospital leaders expect to see many more closures.

These closures are particularly likely to occur in communities populated by high numbers of poor patients--the ones who will find it most difficult to transfer to another hospital. For example, Plainsfield, NJ-based Muhlenberg Regional Medical Center--which serves a poor, ethnically-mixed community--has begun the process of closing down its acute care beds after operating continuously for 130 years. It lost $16.8 million last year and expects to lose another $18 million in 2008.

To learn about the hospitals' troubles:
- read this Washington Post piece

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