BY MARTIN DAKS CONTRIBUTING EDITOR
THE NEW JERSEY HOSPITAL Association, a nonprofit trade association that represents New Jersey hospitals, health systems and other healthcare providers has been led by President and CEO Cathy Bennett— a former state Health Commissioner and a Haddonfield resident—since November 2017. In this interview with COMMERCE she discusses key issues affecting hospitals, including the Affordable Care Act, Medicare for All, profitability, taxation, mergers, recruiting doctors and nurses, vaccination policies and the future of wellness in the Garden State.
COMMERCE: How do New Jersey hospitals view Medicare for All and the Affordable Care Act as they look to the future of healthcare delivery?
CATHY BENNETT: New Jersey’s hospitals continue to support improving access to health coverage and know that providing health insurance for more Americans is absolutely the right thing to do—for patients and families. But we need to understand what Medicare for All is, whether it is simply a campaign slogan, or is it one of the 10 varying bills introduced in the 116th Congress, which include a single national health insurance program. Is it a new national health insurance program with an opt-out for qualified private coverage, or a new public plan option that will be offered through the ACA marketplace? Is it a Medicare buy-in option for older individuals not yet eligible for Medicare, or a Medicaid buy-in option that states can elect to offer through the ACA marketplace?
Q. What information is not yet understood on these proposals to overhaul America’s healthcare system?
A. Each of these options would affect the long-term sustainability of our healthcare system. I think there’s a great deal more that we need to understand about the impacts of such a sweeping shift as Medicare for All. Considerations include the interruption of established employer-sponsored insurance coverage for 180 million Americans; the potential for increased politicization of health insurance; the chilling effect on Medicaid expansion and ACA marketplace enrollments; derailment of investments in cutting-edge research; and disruption of advancements in delivery system innovation, quality, and patient safety. As providers, we need to continue our commitment to putting the consumer first, delivering accessible, quality care in our communities, and improving the health of our residents while the Medicare for All debate evolves.
Q. What role are mergers playing in shaping the future of New Jersey hospitals? Is there still a place for small, independent hospitals?
A. About 80 percent of New Jersey hospitals are now part of a multi-hospital system, and we have seen “mergers 2.0” with system mergers. And yet we still have a number of independent hospitals that are viable and very important assets in their respective communities. New Jersey is a very good example of the potential for success in both models, and New Jersey’s hospitals have committed to improving the health of New Jerseyans. This means a shift in focus from a system of care centered around clinician practice and volume, to a patient-centered system organizing around patient needs. This patient-centered focus values collaborations and partnerships that advance the right care in the right place at the right time and prioritizes patient outcomes.
Q. What can you tell us about the key issues facing New Jersey hospitals?
A. Hospital and health system leaders must be visionaries, designing a very different future health system. Yet, they are bound by our current reimbursement system that has not kept pace with the shift to healthy communities and population health. That can be a frustrating balance.
We know, for example, that social issues such as food access, education, housing and employment are just as influential on your health as the time you spend in a doctor’s office or in the hospital. The broader health system, including hospitals and other providers—but also insurance companies, drug companies, government programs such as Medicare and Medicaid and social services programs—must all be part of this transformative shift.
I’m not sure that all those stakeholders are aligned at this juncture, and that’s a worry to any healthcare leader who is committed to building healthier communities within the constraints of today’s healthcare policy and resources.
As an extension of that, healthcare leaders also are very cognizant of so-called disrupters entering the healthcare space, such as Google Health, and Haven, which is the joint venture between Amazon, J.P. Morgan and Berkshire Hathaway. They add uncertainty to healthcare, but I think they also are motivating all stakeholders to up their game in healthcare innovations.
Q. Is New Jersey a good place for hospitals? What are the opportunities and challenges of operating a hospital here?
A. I think New Jersey is a great place for hospitals, healthcare and healthy communities. There is a tremendous depth and breadth of services offered here with high-quality care, including nationally recognized nursing excellence and a tremendous commitment to healthy communities, including $2.9 billion in community benefits and $23.6 billion in jobs, salaries and other economic benefits. Of course, we also happen to be in a region of the nation with challenges such as a high cost of living and a great deal of competition from providers across the Hudson and the Delaware.
Q. How are the finances of New Jersey’s hospitals? How do they stack up against national averages?
A. Hospitals’ overall financial standing has improved as more New Jersey citizens have been added to the insurance rolls under the Affordable Care Act. The amount of charity care costs that hospitals must absorb has been reduced from $1 billion to about $500 million.
In 2017, the most recent year of audited data available, the statewide average hospital operating margin was about 4 percent, although we continued to have roughly one-third of the state’s hospitals operating in the red. New Jersey’s average margin lags about 2.5 percent behind the national average.
In industry standards, a margin of 4 percent to 6 percent is generally considered the minimum you hope to see to ensure proper reinvestment back into the healthcare system to meet patient and community needs and keep pace with technology and innovation.
Q. Medical equipment is continuously being updated, but the price is rising, too. How are hospitals balancing the desire for the most advanced equipment against budget constraints?
A. You’ve hit upon the real conundrum. Everyone wants access to advanced, sophisticated medical technology. But we also are universally concerned about the rising costs of healthcare. I think the important thing is to continue investing, continue innovating, because over time those technologies will create efficiencies in care that will pay off, providing better value in healthcare. 3D printing is a great example. It’s a breakthrough technology that is becoming increasingly accessible and affordable, and it has tremendous applications in healthcare, from prototypes to implanted devices.
Q. How are New Jersey hospitals trying to attract doctors and nurses? What could be done to encourage more people to enter the medical professions?
A. Healthcare is such a rewarding field, and it’s been one of the enduring, reliable sources of jobs throughout every economic downturn. But as our population ages, the demand for healthcare increases, and we see the shortage of professionals in several areas—not just physicians and nurses, but also in important roles such as certified nursing assistants (CNAs), home health aides (HHAs), pharmacists and others.
We’re focused especially on positions like CNAs and HHAs. These caregivers are so important in providing quality, efficient care to our most vulnerable populations, but the settings they work in—nursing homes, for example—traditionally have some of the lowest margins because they serve a high number of Medicaid beneficiaries. Medicaid is a notoriously poor payer and our nursing homes, for example, lose an average of $47 a day for each Medicaid beneficiary cared for.
We agree that caregivers deserve a livable wage, but nursing homes will be hard-pressed to meet the increase in the minimum wage with such a significant shortfall in Medicaid reimbursement. We are strongly urging a $15 million state funding investment in nursing homes, which would bring an additional $15 million in federal matching funds to New Jersey. That would help nursing homes meet the new minimum wage requirements. Ideally, we would like to help create a career pathway for these caregivers, perhaps providing them support to continue their education and pursue job aspirations such as a nursing degree.
Q. The 2015 New Jersey Tax Court case, Fields v. Trustees of Princeton University, put a bull’s eye on property tax exemption for hospitals in New Jersey. What are the latest developments on that, and what is the NJHA doing about a legislative response?
A. We are finally beginning to see some movement on this issue after several long years in which the legal challenges between municipalities and hospitals escalated. No one wins in that scenario. There is a bill beginning to move through the legislature this spring that would preserve nonprofit hospitals’ tax-exempt status, while creating a standard contribution that hospitals statewide would provide to their host municipality to offset the costs of public services. It is far past time that we address this issue and allow hospitals and municipalities to move beyond being adversaries in a tax lawsuit, so they can work collaboratively on behalf of the communities they serve.
Q. Are hospitals attracting enough women and minorities? If not, what steps would you like to see to bring more of them into medical professions?
A. Healthcare traditionally has been an excellent field with great opportunities for women, and the same can be said for minorities. We are beginning to see a rise for women and minorities, from the patient unit to the executive office, but historically, that has not been as frequently or quickly as for men. New Jersey is a wonderfully diverse state, and we need to make sure our healthcare facilities are staffed with professionals who match that diversity. It is essential to good health that we have healthcare professionals who can address the language and cultural needs of all New Jersey residents. We also need those diverse individuals to rise to the executive team, so they can influence and shape a more equitable healthcare delivery system.
Q. How are hospitals dealing with measles and vaccination issues in New Jersey?
A. The measles outbreak in New Jersey—and in other parts of the country—is a classic case of hospitals and other healthcare providers being the eyes and ears of disease surveillance. In partnership with public health lead agencies such as the New Jersey Department of Health, healthcare entities are on the frontlines of caring for patients who contract the disease and helping protect the broader community, as well.
Today, it’s measles and mumps cases that are in the news, but it wasn’t too long ago that we were facing polio, tetanus, pertussis and the global Ebola epidemic. This is why we can never relent in public health preparedness. Also, I cannot overstate the importance of vaccinations. We should not underestimate the risk of communicable diseases that had all but been eradicated by vaccinations. We must protect ourselves, our families and our communities with our public health commitment to vaccination.