NJ begins sorting hospitals

While it stopped short of creating an actual list of hospitals that aren't worth saving, a New Jersey healthcare commission has created criteria for sorting out financially-troubled hospitals that should close from those that should be propped up by state financial aid. Unlike neighboring New York, nobody seems to be suggesting that the state should use this framework to demand hospitals close. The commission did suggest that hospitals which fall below its line be allowed to close (rather than funded to keep going).

In its report, which was a year in the making, the New Jersey Commission on Rationalizing Healthcare Resources said that the state's hospitals are "truly in poor financial health," concluding that uninsured patients, underpayment by government insurance programs, lack of cost and quality transparency and misaligned incentives between hospitals and physicians were all factors in their poor financial performance. The group, which was headed by famed healthcare economist Uwe Reinhardt, said that the northeast area of the state--near to neighboring New York state--has the largest oversupply of hospital beds, but that the whole state faces some oversupply problems.

To keep hospitals on their toes, in the meanwhile, the commission is recommending that hospitals in New Jersey be required to post their annual financial reports and Form 990s for the prior three years on their Web sites, along with their chargemasters and sliding scales of prices for uninsured residents.

To find out more about the commission's report:
- read this Modern Healthcare piece (reg. req.)
- read the Commission's report (.pdf)

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