Hospital stabilization fund draws lawmaker’s attention

TRENTON – At the end of 2012, 25 percent of New Jersey’s hospitals had less than 30 days cash on hand, a decrease from 2011 of 33 percent, but still a cause for concern.

Health Department Commissioner Mary O’Dowd responded to questions from Assembly Budget Committee member Gary Schaer regarding the lack of the so-called stabilization fund in the fiscal year 2014 budget for endangered hospitals.

She told Schaer Thursday that in case of a true emergency, the state would work to find funding for a hospital, but since fewer hospitals have been seeking the money and since the federal government no longer provides the 50 percent match, the state felt it would be more prudent to funnel funds to hospitals in different ways.

For example, funds go to hospitals’ graduate medical education and other programs, O’Dowd said.

Schaer pointed out that without that stabilization fund there are hospitals that would have closed.

Medical marijuana

Lawmakers questioned O’Dowd regarding several other areas in the FY14 budget, including the progress of the medical marijuana program.

Of the six facilities envisioned, one in Montclair is up and running, one in Egg Harbor and another in Woodbridge are building their infrastructure and have received background check approvals, and the one in Egg Harbor intends to start dispensing medical marijuana by September, O’Dowd said.

The remaining three are not as far along, and haven’t identified specific locations in towns where they hope to open dispensaries, O’Dowd told the committee, pointing out that local opposition remains the program’s largest obstacle.

Committee members John Burzichelli and Declan O’Scanlon both expressed support for the program. While Burzichelli expressed some frustration with the fact only one out of six facilities is operating, O’Scanlon said there is no doubt the Health Department is taking the program seriously.

O’Dowd said there are 900 patients and caregivers and 250 physicians registered for the program.

Charity care

Regarding charity care, budgeted once again at $675 million, O’Dowd said a streamlined formula ensures that hospitals are rewarded for actual performance.  “Hospitals that provide more in documented care will receive more in funding,’’ she said in response to O’Scanlon who said in years past it seemed charity care seemed to reward lack of performance because the funding was guaranteed.

The new formula works to guarantee a hospital 80 percent of the previous year funding, with 20 percent based on actual charity care that is documented.  That formula originally was 90/10, O’Dowd said, adding that this method helps provide transparency and predictability for hospitals and the state.

Bonnie Watson Coleman said it seems as if funding for major urban centers has decreased while funding for some suburban centers has risen.

O’Dowd said that patients who use hospitals regardless of ability to pay often use the health care system more than those who can pay. “The primary source of health care was the emergency department,’’ she said regarding some cases.

She said that Capital Health reported seeing more patients from the Trenton community using their hospital in Hopewell.

And Coleman said even Princeton has seen an increase.

She wondered if the state’s high unemployment rate is a contributor to the charity care situation. Hospital stabilization fund draws lawmaker’s attention