Financial Pressures Continue to Plague Hospitals

Publication Date: January 2001

Publisher: Center for Studying Health System Change

Author(s): Debra A. Draper; Linda R. Brewster; Lawrence D. Brown; Carolyn A. Watts

Research Area: Health

Type: Report

Coverage: New Jersey

Abstract:

In March 2001, a team of researchers visited northern New Jersey to study that community's health system, how it is changing and the effects of those changes on consumers. The Center for Studying Health System Change (HSC), as part of the Community Tracking Study, interviewed more than 60 leaders in the health care market. Northern New Jersey is one of 12 communities tracked by HSC every two years through site visits and surveys. Individual community reports are published for each round of site visits. The first two site visits to northern New Jersey, in 1997 and 1999, provided baseline and initial trend information against which changes are tracked. The northern New Jersey market encompasses Essex, Morris, Sussex, Union and Warren counties.

Since 1999, when hospitals and health plans in northern New Jersey were struggling with poor financial performance, many hospitals' financial problems have worsened. The state hospital association reports that 60 percent of New Jersey's hospitals currently operate in the red. Small and urban safety net hospitals appear to be the most severely affected, raising concerns about low-income and uninsured residents' continued access to care. In contrast, most health plans are now financially stable and reporting profits. Meanwhile, many employers have experienced double-digit premium increases, and some enrollees face reduced options as plans become choosier about their customers and turn down some employers.