| For-profit companies "turn around" hospitals, not with a magic bullet but with by, cutting corners, services, and staff. They do it with our tax dollars. And they do it in the dark. The New Jersey State Senate has an important opportunity on January 6 to bring the financial operations of these companies into the public light and out of secret boardrooms.
These for-profit hospitals use the same increasingly scarce public sources of funding - Medicare, Medicaid, Charity Care, and Family Care, as our non-profit hospitals. Yet the current financial reporting requirements are very weak. For-profit hospitals must be held to the same standards of financial transparency and accountability as our non-profit hospitals. Shouldn't the communities they serve know how much is being spent on compensation for top executives or on supplies and services provided by the owners' affiliates and subsidiaries-particuarly when much of the revenue is the result of our tax dollars? Maybe, but they are not. |
| We turn to our hospitals when we are most vulnerable, expecting that providing safe and effective care is their #1 priority. We count on our hospitals' overarching commitment to the health, safety and welfare of patients and communities to dictate how the hospital uses its financial resources. In the case of not-for-profit hospitals, the board of directors must answer to Internal Revenue Service and state Attorney General requirements that they act in the public interest, remain true to their charitable mission and provide documented community benefits.
Not so for-profit hospitals, where the board of directors is accountable first and foremost to the owners and investors, where the core objective is increasing the wealth of investors, and public disclosure requirements are far more limited. With five for-profit companies now running local hospitals, from Bergen County to Salem County, it is more important than ever to be able to track how patient care dollars are being spent. We've already seen examples where partners take millions in profits and fees while laying off staff and cutting services; where owners make large and secret contributions to lobbying efforts and where companies conduct lucrative dealings with their own affiliates.
When a for-profit hospital claims a service is underutilized, or a bleak financial picture demands staff or service cuts, the community deserves the full picture. When, the Governor and NJ Legislature cut health care funding, or when our communities look to a for-profit to 'save' their hospital, they deserve the full picture. When our state agencies are reviewing whether to allow one of our non-profit hospitals to be sold to a for-profit, they should have the full picture of who is involved.
For-profit or non-profit, when decisions about our health care are being made, our communities need to see what's behind the closed boardroom doors. These for-profit companies are taking over valuable community assets, built up over time with tax-exempt funds. Greater transparency will let people across New Jersey know if our tax dollars are being diverted for profits instead of providing health care It's really our money. It's certainly our health care.
S1468/A1523, sponsored by Senators Weinberg and Cunningham and Assemblywoman Wagner would require for-profit companies to disclose the same information our non-profit hospitals already do, including whether, for example, the Boards of these private, for profit companies, are 'self-dealing', or paying excess compensation to their CEOs, or planning to cut services. It is an important first step in transparency and accountability, something taxpayers, patients and NJ residents need and deserve. |
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