People who work in New Jersey's health care system say the situation is making an already costly system more expensive, and that nowhere is the problem more glaring than at the state's 76 hospitals.
"Every hospital wants to have every service so they can tell their patients that they have all the services," said Mahmud Hassan, a health care economist at Rutgers University. "It's basically a marketing tool."
According to the lengthy 629-page report compiled by Avalere Health LLC, a Washington, D.C.-based health care consulting firm, the state has 50 more magnetic resonance imaging machines than all of Canada.
This glut of high-tech, state-of-the-art services is driving up health care costs to consumers, Hassan explained, because at the same time hospitals have been installing these costly systems to keep pace with their competitors, government reimbursements to hospitals are being slashed.
"Something isn't right in terms of insurance payments and reimbursements to hospitals, and that's put a big drag on the entire system," said Hassan.
The report found that many of the state's hospitals are in deep financial trouble, operating on profit margins of less than 2 percent.
Moreover, many of those same hospitals are long overdue for renovations and infrastructure upgrades. Yet because of their financial instability these same hospitals are finding it difficult to get loans so the work can be done.
The report states that there are too many hospitals in New Jersey.
Hospital executives seem aware of the surplus as well, as indicated by the fact that between 2001 and 2005 nine of the state's general acute-care hospitals either closed, retooled to reduce duplications of widely offered services or merged with another hospital.
Another problem eating up dollars and also related to the lack of a cohesive approach by state health care providers is the striking difference in how patients are treated across different regions in the state.
For instance, a Medicare patient treated at Barnert Hospital in Paterson averages more than 70 doctor visits and 26 hospital days in the last six months of life, according to the report. The same patient at Pascack Valley Hospital in Westwood gets an average of 47 visits and 18 hospital days, a far less expensive approach. William Marino, president and chief executive officer of Horizon Blue Cross Blue Shield of New Jersey, the state's largest insurer, recently described these regional variations as "stunning." The report notes that no uniform, statewide guidelines are in place to ensure patients receive adequate care while at the same time costs are also kept in check.
"The state's current administrative structures for overseeing and managing the health-care system is, like the system itself, fragmented, decentralized and often not fully transparent to all of its public stakeholders," the report said.
Some comfort might be taken from the report's finding that New Jersey's health care ills merely reflect the broader problems of the nation's system. source: Bergen Record 7/25/07
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