“Like the rest of the country, New Jersey healthcare leaders are watching with deep concern the recent events on Wall Street and throughout the nation’s economy. There’s much at stake, and the healthcare services that our residents rely on are not immune to the crisis.

“Plummeting investment income, rising costs of goods and services and a squeeze on lending and capital affect healthcare providers just as they do other businesses. But the unique mission of New Jersey hospitals – a charitable commitment to caring for all, regardless of their ability to pay – makes these providers especially vulnerable to a faltering economy. And they become even more important at a time when jobs are threatened and the number of individuals without health insurance climbs.

“New Jersey’s economy, likewise, depends on hospitals and other healthcare providers as sources of jobs and spending.

“Consider these key economic implications:

• 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. Financial experts say those dollars ripple throughout New Jersey’s economy, with a “multiplier effect” that reaches $38 billion in economic impact statewide.
  
• 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.
  
• New Jersey hospitals are the healthcare safety net for New Jersey’s 1.3 million residents without health insurance. The cost of charity care services provided by our hospitals exceeds $1.3 billion annually. Hospitals this year will receive $605 million in state reimbursement for this charity care, leaving hospitals to absorb roughly $700 million of the costs. Those charity care services suffered a 15 percent funding cut in the state’s 2009 budget.
  
• An economic downturn will place an even greater strain on these safety net services and the healthcare facilities that provide them. A new study released last week by the Kaiser Commission on Medicaid and the Uninsured shows that Medicaid programs already are experiencing a growing demand for healthcare services from the nation’s neediest individuals. A survey of all 50 states showed that Medicaid enrollment increased 2.1 percent in fiscal year 2008 and is expected to jump another 3.5 percent in 2009. Medicaid, incidentally, pays New Jersey hospitals just 69 cents for every $1 of care they provide.
  
• The nation’s credit crisis will make it increasingly difficult for hospitals to borrow capital to invest in their programs and modernize facilities. New Jersey’s hospital facilities already are 30 percent older, on average, than the rest of the nation’s, according to the state’s Commission on Rationalizing Health Care Resources.

“The nation’s economic meltdown comes at a time when New Jersey’s hospitals already are struggling under a blend of pressures that are unique to our state. They include the state’s charity care mandate and the chronic underfunding in that program; reimbursement shortfalls from other key payers including Medicaid and Medicare; and a proliferation of ambulatory care facilities – much higher than neighboring states – that drain patients and revenues away from hospitals.

“Those problems are among the factors that have forced eight New Jersey hospitals to close their doors in the last two years. Of the hospitals that remain, nearly half are losing money.

“With that said, New Jersey hospitals’ recent struggles may in fact make them especially prepared to weather this most recent economic storm. They have learned to economize, consolidate and find business solutions that allow them to keep their focus on the highest of priorities – delivering high quality care to the people of our state.”