Without Funds, N.J. Hospitals Face Crisis

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[New Jersey] has an estimated 1.3 million people without health insurance who cannot pay a doctor or a hospital bill. New Jersey law requires that hospitals treat anyone who walks through their doors, and then get reimbursed later by the state. But the state’s looming budget shortfall has forced it to cut back on the reimbursements, leaving hospitals to pick up the tab. And hospitals, in turn, are going broke: Six have closed in the past 18 months, and half of those remaining are operating in the red.

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The situation has come to a head in this city [Plainfield] of 48,000 people—majority black, largely poor and with many new immigrants moving in. The city’s hospital of 130 years, Muhlenberg Regional Medical Center, is slated to become the latest casualty of this faltering system, closing its acute-care facility later this year. The obstetrics and pediatrics wards have already shut, and equipment is being packed up and wheeled out.

The hospital says it lost $16.8 million last year and will lose another $18 million in 2008, leaving its owners little choice but to close it down. But news of this latest closure has hit hard for those in Plainfield and surrounding towns who have come to rely on Muhlenberg. Many are elderly, some have chronic conditions, and they will now have to travel as far as 10 miles away for care.

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Muhlenberg, owned by Solaris Health System, blames the huge growth in uninsured patients, the underfunding of Medicaid and Medicare and the state’s budget cuts for charity care. “The healthcare system in New Jersey is clearly broken,” Muhlenberg says on its Web site. “And hospitals that serve a high percentage of poor and uninsured cannot survive under these pressures.”

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Some of the uninsured are new immigrants from Mexico and Central America who are moving into the town. But most are longtime residents, working-class families, black and white, who have lost their jobs and their health insurance as the regional economy has faltered.

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The wave of illegal immigration is another problem. Illegal immigrants by law cannot apply for charity care. But by law, they must also be treated at New Jersey hospitals, which cannot ask for proof of citizenship. “They get treated, but the hospital is just hoping somebody, someday will pay,” said Mary Zink, a Plainfield art teacher who volunteers with the People’s Organization for Progress, an activist group that has been leading protests against Muhlenberg’s closing.

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Some state officials have said that New Jersey needs this period of consolidation—that there were too many hospitals, and that some needed to close to make the system more rational and efficient.

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