New Jersey Hospitals Facing an Epidemic of Bankruptcies

Six New Jersey hospitals have closed their doors in the past six months due to financial problems. Many more are likely to follow unless something is done to help solve their major financial short falls very soon. According to the Washington Post, July 7th, 2008, hospitals like Muhlenberg Regional Medical Center has lost $16.8 million dollars in 2007 and estimates a loss of $18 million more in 2008. What is causing this medical crisis in the Garden State? There seem to be many reasons and the cause and magnitude of each one is increasing significantly with time.

Decrease In Patients With Health Insurance

The number of insured patients is decreasing. Since New Jersey law requires all patients be treated, this alone is creating a growing shortfall as more and more industries lay off people who lose their health insurance benefits with their jobs. The Washington Post estimates that 1.3 million New Jersey residents have no health insurance at all. Each employee downsized by industry or laid off because off industrial bankruptcies increases this number.

Increase In The Number Of Illegal Aliens In New Jersey

Like people without health insurance, New Jersey hospitals are required to treat all people who show up without asking them if they are illegal aliens or not. Even if they are illegally employed, they receive no health insurance benefits and are not likely to use cash since they are often paid very small hourly wages and can't be tracked by the hospital administration or collection agencies since they have no Social Security Number and no permanent address.

The State New Jersey pays the hospitals a small contribution for legal but uninsured residents but will pay nothing for illegal aliens using the same facilities. In a way this amounts to free hospitalization for Illegal aliens. This free care is one more reason this Country is being flooded with illegal aliens. It is quite possible for illegal aliens with medical problems to cross the borders just to receive free and advanced medical care.

New Jersey State Cut-Backs in State Charitable Contributions To Hospitals

The New Jersey State Government budgeted $605 million for charitable contributions to hospitals to try to help cover the deficit of the hospitals due to non-reimbursed treatment and expenses. This amount didn't come close to making up the shortfalls of many hospitals in the less affluent areas of the New Jersey. However, due to State shortfalls in their budgets, the $605 million dollar contribution was cut back by $111 million to only $494 million for 2008.

The Rise Of Outpatient Care Facilities

Many outpatient care facilities started to spring up throughout New Jersey. Since these facilities are cheaper than hospitals and can legally only service insured, paying customers. They have started to drain this source of income away from the larger hospitals that had to live with State Of New Jersey restrictions and standards.

My own outpatient cataract surgery was done in such a clinic. Since I am fully insured, this was one less procedure which would normally be done in a hospital and increase their profit level. Thousands of patients are siphoned away from hospitals and encouraged to use these outpatient facilities, which are little more than suites in office buildings.

How Can These Problems With Hospital Closings Be Remediated?

There seems to be only one sure way to stem the tide of large scale hospital closings. That would be to install a national health care program as is present in countries such as Canada and France. This is being promised to some degree by the Democratic candidate for President. However, trying to understand how this would be accomplished should this candidate be elected is somewhat problematical. It was made even more complex by that candidate's back peddling on issues of great expense such as ending the war in Iraq and the issuance of future tax rebates.

We could only keep our fingers crossed that someone with great power will do something very soon. It doesn't seem like the current President has been doing anything to help with this issue.