Experts weigh in on out of state restriction

As lawmakers prepare to put the finishing touches on sweeping pension and health benefit reform that has thrown the capital city into chaos for the last month, the focus on one last-minute add-on to the bill has begun to snowball.

The plan will drastically increase worker contributions, and eliminate cost-of-living adjustments to plug pension and retirement loopholes. But it’s the out-of-state care provision that has garnered the most recent attention.

Adjusted after the criticisms, the current clause would create an affordable health care plan – possibly the least expensive plan offered – that in most cases would require certification from a doctor for non-emergency out-of-state care.

In Trenton, opponents of the bill said this week that it would put doctors in a precarious position, while proponents said it would provide a boost to local hospitals and reduce state costs. State Street Wire asked two professionals outside of the Statehouse and on the metropolitan borders for their opinion.

Dr. Joseph Kozel  is a pulmonary disease specialist and president of medical staff at Hoboken University Medical Center. Most of the out-of-state referrals he sees going across the river are for lung, liver, or stomach problems that need specialized care or surgery.

“It’s an added step that will delay the process,” he said, and even if it’s a few days or a week, “who’s to say that it won’t hinder the patient’s ability to get timely care. It’s another hoop that you have to jump through.”

Under the new out-of-state provision – in which doctors are dinged with administrative penalties for misrepresenting the need for out-of-state care – Kozel said he could be required to send a patient to a less successful surgeon “just because I’m sitting here in Hoboken” and the doctor is across the state line.

“If you want me to say that the care is not available in New Jersey, well, it is available,” he said, but, “Not everything is equal.” Kozel sends patients to Memorial Sloan-Kettering in New York City for lung surgery in many cases. “I’m sorry but (MSK) outshines our facilities in New Jersey,” he said. “There are some instances where there is a difference.”

The out-of-state provision would increase in-state hospital usage at a time when many hospitals across the state are struggling, supporters of the bill said.

“As a hospital administrator, it would play out well for you,” Kozel said, but patients could face longer delays or, in some cases, less qualified doctors performing surgery on major organs. “It’s not fair to the patient,” he said. Kozel said too much emphasis is put on economics, rather than patient care. “I don’t feel doctors should pattern their referrals on an insurance company’s request (or the state’s request) to stay in-state,” he said. “(This out-of-state provision) will change my patterns of referral.”

Alexander Hatala, president and CEO of Lourdes Health System, defended the legislation in an op-ed piece his staff shared with State Street Wire today. Lourdes is one of the leading South Jersey health care providers with hospitals in Camden and Willingboro.

He said the out-of-state provision has “received a lot of attention and is generally misunderstood,” but equated it to the state’s “Jersey Fresh” campaign: buying local.

“I believe the incentives contemplated by this legislation make good sense and are good public policy,” he wrote. “While I certainly believe in freedom of choice when it comes to one’s medical care, the reality is that the fiscal health and well-being of New Jersey’s hospitals, and the nearly 150,000 employees who staff them, are at stake. I make no apologies for supporting financial incentives to encourage public employees to use in-state hospitals.”

“Without belaboring the details of this evolving legislation, it is important to understand that no public employee will be forced into a health plan which restricts access to care,” he explained, referencing the grandfather clause that allows current participants to keep the same level of care. “Workers will be given the option of choosing a lower-priced plan which will require them to use New Jersey facilities for treatment unless it is deemed unavailable in-state.”

Lawmakers said they can’t be sure the in-state plan will be the lowest-cost plan since the new plans have not yet been created. Part of the legislation creates a state board that will devise the public employee health plans.

Hatala continued, “My fellow CEOs and I often cite the relevance of our local ‘meds and Eds’ as an economic stimulus in the community, but this legislation isn’t just about jobs, it is about perception. New Jersey is sandwiched between two major media markets. With no market of our own, we have developed a bit of a complex. Every day we are bombarded with messages as to the superiority of our healthcare neighbors to the north and west. Yet, the fact is that New Jersey hospitals are nationally recognized for excellent, high quality care…As the Garden State, we are proud of the ‘Jersey Fresh’ mantle. We need to recognize our equally valuable healthcare ‘product,’ and patronize our own institutions in much the same way. This legislation does not restrict access; it protects and rewards choices that benefit our own state over others.”

He said Lourdes also pushes employees to “buy local.”

“I want to make it clear that I am not suggesting New Jersey public employees do something that hospitals like Lourdes do not already ask of their own workers. At Lourdes, we have a similar provision in our healthcare plan. Our associates avoid out-of-pocket facility fees if they choose a Lourdes provider. Many businesses in the private sector, to improve quality and reduce costs, ask their employees to choose from in-network providers. It is not a new concept. Given our dire financial straits in the state, this is not a sacrifice at all. It is an opportunity to ‘buy local,’ ” Hatala wrote.

Experts weigh in on out of state restriction