STATEWIDE – The New Jersey Senate today passed legislation that would require for-profit hospitals to disclose financial information to the public, as is already required of nonprofit hospitals.
The legislation, S1468, passed almost exclusively along party lines by a vote of 24 to 14. Only one Republican broke party lines to support the bill.
The legislation sponsored by Senators Weinberg, Cunningham and Gordon, would require for-profit hospitals in New Jersey to disclose audited financial statements, investments and investors, compensation levels for executives, and payments made to affiliates.
According to the Health Professionals and Allied Employees (HPAE), a union that represents 12,000 nurses and other health care workers in the Garden State, the legislation was drafted in response to concerns raised about whether public health care funds are diverted to finance excessive executive compensation, insider dealings with board members or affiliates or excessive profits at for-profit owners of community hospitals.
At present, non-profit hospitals must disclose most of their financial information to the public through various state and federal reports, while for-profits can keep most of their information hidden, even if they receive public funds and taxpayer dollars through charity care, Medicare, and Medicaid payments.
“The boards of for-profit hospitals are 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,” said HPAE President Ann Twomey in a statement. “With five for-profit companies now running local hospitals, 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. We applaud the NJ Senate vote to begin to impose reasonable transparency and accountability requirements on for-profits.”
Last year the limited liability corporation known as MHA, LLC, a group of private investors, bought Meadowlands Hospital Medical Center in Secaucus for $15 million, plus a $2 million reserve.
And HUMC Holdco, LLC, a part owner of the Bayonne Medical Center, is now in the early stages of purchasing Hoboken University Medical Center.
The companion bill introduced in the State Assembly by Assemblywoman Connie Wagner, A1523, has not yet come up for a vote before the Assembly’s Health and Senior Services Committee. – E. Assata Wright