N.J. Lawmakers Examine Economy’s Impact on Healthcare

The Assembly Health and Senior Services Committee and the Assembly Human Services Committee held a joint hearing yesterday to address the impact that the nation's financial crisis will have on health services in this state.

NJHA was on hand at the session with a statement underscoring hospitals’ significant contributions to the New Jersey economy.

“New Jersey hospitals are a major contributor to New Jersey’s total economic output; they provide $17 billion in annual revenues that drive both state and local economies,” stated NJHA President and CEO Betsy Ryan. “Financial experts say those dollars ripple throughout New Jersey’s economy, with a “multiplier effect” that reaches $38 billion in economic impact statewide.

In addition, said Ryan, “New Jersey’s hospitals provide roughly 150,000 jobs, and the employment “multiplier effect” reveals that nearly 300,000 New Jersey jobs are directly linked to hospitals. Healthcare as a sector boasts the state’s highest rate of jobs growth. In fact, healthcare is a leading employer that surpasses education, casinos and hospitality, manufacturing and retail in its total number of jobs.”

Ryan warned state leaders that the economic downturn could place even greater strain on New Jersey’s hospitals, as growing unemployment could force more New Jerseyans into the ranks of the uninsured. Click here to read Ryan’s full statement.

State Health Commissioner Heather Howard and Human Services Commissioner Jennifer Velez offered their own perspectives before the committee. Velez stated that “hospital emergency rooms and state psychiatric units are at or close to capacity and facing burgeoning demands.”

Assemblywoman Mary Pat Angelini (R-Wall) expressed her concern with transferring behavioral health patients to proper facilities, an issue that NJHA has spearheaded with state officials in recent weeks. Velez promoted the department's cooperation with NJHA to get these patients into the proper level of care.

"Hospitals can't be a catch-all for all of these patients,” said Velez. “We are engaged in an active dialogue with the Hospital Association in order to find a proper pathway to transfer these patients to state facilities.”

The Commissioner also touched on the state's SCHIP program and the recent expansions to the NJ FamilyCare program. Since FamilyCare Advantage was enacted in January to extend discounted coverage to children over 350 percent of the federal poverty level, the program has only enrolled a total of 129 kids. However, since the enactment of Sen. Joseph Vitale’s (D-Woodbridge) and Assemblyman Louis Greenwald's (D-Voorhees) Kids Mandate legislation in July, approximately 5,000 kids and 12,000 parents have enrolled.

Assemblyman Samuel Thompson (R-Matawan) asked how the Department would be able to handle a potential 5 percent spending reduction that Gov. Jon Corzine has requested. Velez admitted that it will be difficult to find savings because the department is already cut down to its core components.

“We are actively meeting on this issue, and I must admit that there is no good choice in this matter,” she said.

Howard testified on DHSS’s progress in maintaining and addressing proper access to care during these difficult economic times. She cited statistics from the Kaiser Family Foundation that an increase of 1 percent in the unemployment rate will cause an increase of 1.1 million unemployed citizens.

Assemblywoman Joan Quigley (D-Jersey City) addressed the call for more cuts in the DHSS budget: “Please do not cut any programs that affect access to care or cut anything that affects the provider communities,” she said. “Hospitals are an economic engine in all of our communities and can't afford to be cut any further.”

Angelini echoed those sentiments by imploring the Commissioner not to cut any more charity care funding.

NJHA will continue to engage the Legislature to mitigate the impact that the financial crisis will have on N.J. hospitals.

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