1999 Hospital Commission Announces Plans

News Release

PO 360
Trenton, NJ 08625-0360 Len Fishman
Commissioner
For Release:
February 11, 1999 For Further Information Contact:
Rita Manno
(609) 984-7160


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Commissioner Convenes Advisory Commission on Hospitals
Trenton -- A new advisory commission will examine the hospital industry, assess the overall financial health of facilities, identify warning signs that might place a facility in jeopardy and recommend options for hospitals looking to merge or convert to other uses, Commissioner Len Fishman announced today.

The new commission -- formed at the direction of Gov. Christie Whitman -- is in response to a request by hospitals to study an industry that has undergone tremendous change in the last five years with mergers, acquisitions, competition for services, certificate of need reform and expanded managed care.

In their February 5 letter, hospital CEOs asked the Governor "to begin an immediate examination of our concerns and to work with us to devise solutions that will preserve our health care safety net, particularly in our urban areas."

The task force will bring together hospitals, employers, consumers, government, unions, doctors, nurses, and others involved in health care.

"Access to quality health care is one of the most important rights consumers have. We need to examine our hospitals in this state and the challenges they face in this very changing market place" the Governor said.

Over the last decade, some hospitals in New Jersey have consolidated, merged, joined systems or closed, the Governor noted. "Everybody including hospitals and government need to be prepared for any future changes," she added.

The advisory commission will also respond to the findings of a report by the state Health Care Facilities Financing Authority, which is analyzing the financial condition of the hospital industry in New Jersey. That report, expected in March, will be looking at capacity, demand, revenues and expenditures in hospitals.

The advisory commission is expected to report to the Commissioner in June.

In addition, a Hospital Assistance Unit will be created within the department to help hospitals and their boards explore options for their future, including restructuring, consolidation of services and changing the type of services offered. Hospitals need viable options to achieve a balance between their revenues and expenditures. The state will consider financial assistance to a hospital in retaining the consultants necessary to evaluate a hospital's current and future strategies.

"In using the new unit within the department, hospitals will be opening themselves up to a process that seriously considers some fundamental changes," said the Commissioner.

"We're saying to hospitals in need of help that they have to be pro-active at an early stage in order to get the best possible outcome."

The administration already has taken many actions to support hospitals, especially urban inner city hospitals that serve a disproportionate numbers of uninsured patients. These include:


Supporting charity care and hospital relief programs that distribute $523 million annually to hospitals caring for disadvantaged populations. The formula used to distribute these funds is effective in that the majority of the funds go to hospitals providing most of the care to the poor and uninsured.

Reforming the certificate of need law to eliminate Certificate of Need requirements for many services and streamline them for others. This makes it easier for hospitals to add or remove services in response to changing market conditions. The Certificate of Need reform commission continues to examine the impact on urban hospitals if further revisions to Certificate of Need requirements are implemented.

Promoting partnerships between urban and suburban hospitals, including the new cardiac services pilot program which will allow a suburban hospital to offer satellite cardiac surgery services in partnership with an urban hospital cardiac program. Revenues from the cardiac program in the suburban hospital must be used to support programs and operations in the urban hospital.

Expediting decisions on hospital mergers, consolidations, conversions of use and/or closures that require a full Certificate of Need, without compromising the complete review of these transactions.

Responding effectively to assure uninterrupted access to care when services or facilities are closed through such measures as ensuring emergency transport of patients, and transfer of records and extension of admitting privileges to physicians at the receiving hospital

Supporting HCFFA's program for refinancing hospital debt, which has resulted in a record number of refinancings. In 1998, HCFFA issued $1.4 billion in bonds. About $1 billion of these bonds represented refinancings, which resulted in present value savings for New Jersey hospitals of more than $57 million.
Note: Members of the Advisory Commission on Hospitals have served on a prior committee that examined health care issues. Attached is the list of members.


ADVISORY COMMISSION ON HOSPITALS

George Laufenberg
NJ Carpenter's Fund
Sister Jane Frances Brady
CEO
Saint Joseph's Hospital & Medical Center

Hank Meisner
Director, Governmental Affairs
Horizon

Dick Oths
Chairman
New Jersey Hospital Association

The Honorable Michele Guhl
Commissioner
NJ Department of Human Services

Lilton Taliaferro, Jr., Esq.

Jim Leonard
Vice President, Government Relations
NJ State Chamber of Commerce

John Jacobi, Esq.
Seton Hall Law School

Dr. Gregory Sachs
Chairman
Medical Society of New Jersey

Gary Carter
President
New Jersey Hospital Association

Dr. Stuart Cook
President
University of Medicine and Dentistry of NJ

The Honorable Jaynee LaVecchia
Commissioner
NJ Department of Banking and Insurance

Andrea Aughenbaugh
President
NJ State Nurses Association

Joe Gonzalez
President
NJ Business & Industry Assoc.

Frank Ciesla, Esq.

Jeff Beck
Director, State Government Relations
Aetna/U.S. Health Care

Frank Fumai
President & CEO
Cathedral Health Care System

Charles Wowkanech
President
NJ State AFL-CIO

Albert Tama, M.D.
Executive Vice President/Medical Affairs
Cooper Hospital

The Honorable Jane Kenny
Commissioner
NJ Department of Community Affairs

Dr. Jonathan Metsch
CEO
Jersey City Medical Center

Paul Langevin
President
NJ HMO Association

F. Kevin Tylus
Vice President, Health Plan Operations
Prudential HealthCare Group

The Honorable Jim DiEleuterio
NJ State Treasurer

Melanie Willoughby
President
NJ Retail Merchants Assoc.

The Honorable DeForest B. Soaries, Jr.
NJ Secretary of State

Curt Macysyn
State Director
National Federation of Independent
Businesses of NJ

Ciro Scalero
Association of Children of New Jersey

The Honorable Mel Gelade
Commissioner
NJ Department of Labor

Harry Luna
President
Latino Chamber of Commerce of
Mercer County

Harvey Holzberg
CEO
Robert Wood Johnson University Hospital

Rev. Reginald T. Jackson
Saint Matthew A.M.E. Church

Maurice Coffee
Vice President, Government Relations
West Jersey Health System

Charles Wowkanech
President
NJ State AFL-CIO

Albert Tama, M.D.
Executive Vice President/Medical Affairs
Cooper Hospital

The Honorable Jane Kenny
Commissioner
NJ Department of Community Affairs

Dr. Jonathan Metsch
CEO
Jersey City Medical Center

Paul Langevin
President
NJ HMO Association

F. Kevin Tylus
Vice President, Health Plan Operations
Prudential HealthCare Group

The Honorable Jim DiEleuterio
NJ State Treasurer

Melanie Willoughby
President
NJ Retail Merchants Assoc
.
The Honorable DeForest B. Soaries, Jr.
NJ Secretary of State

Curt Macysyn
State Director
National Federation of Independent
Businesses of NJ

Ciro Scalero
Association of Children of New Jersey

The Honorable Mel Gelade
Commissioner
NJ Department of Labor

Harry Luna
President
Latino Chamber of Commerce of
Mercer County

Harvey Holzberg
CEO
Robert Wood Johnson University Hospital

Rev. Reginald T. Jackson
Saint Matthew A.M.E. Church

Maurice Coffee
Vice President, Government Relations
West Jersey Health System



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