JNESO's testimony before for New Jersey State Health Committee Hearing on For Profit Healthcare

Sept 19, 2011

Senator Weinberg and members of the Senate Health and Senior Services Committee, thank you for the opportunity to address you today about the conversion of non-profit hospitals to ‘for profit’. JNESO, District Council 1 represents over 5000 nurses, techs and other health care related employees in New Jersey and Pennsylvania, 322 of which are employed at Hoboken University Medical Center.
 
We are not opposed to the sale of this institution. We understand that the sale of this hospital to a well intentioned, ethical entity is vital to the survival of HUMC.  Quality health care should not be jeopardized for sake of profit or politics.   In light of recent news articles, that certainly does not seem to be the case.  In fact, JNESO collected over 3000 postcards from citizens concerned about the lack of transparency of this transaction.  It seems as if the instincts of the many thousands of concerned residents were correct.  This hearing brings to light the process by which the transaction between HUMC HoldCo and the Hoboken Municipal Hospital Authority has unfolded. 

We also believe, Senator Weinberg, that going forward with the passage of your legislation S1468 that requires for-profit hospitals to report certain information to the Department of Health along with expanding the scope of the Community Health Assets Protection Act (CHAPA) to include municipal owned hospitals would be not only advantageous but would eliminate such controversial actions.  Under normal circumstances questions about transparency or conflicts of interest can and are addressed in a CHAPA review. This review requires the Attorney General and the Superior Court to support or oppose conditions of the acquisition and enforce steps to safeguard the value of charitable assets and proceeds from a sale that are dedicated for appropriate healthcare purposes. A CHAPA review did not occur with this transaction because the “Municipal” hospital is exempt.  We are therefore concerned by what authority the conditions of this Certificate of Need (CON) will be enforced.

Recently, Hudson Healthcare, Inc filed for bankruptcy.  Hudson Healthcare, Inc. contracted with the Hoboken Municipal Hospital Authority to run the day to day operations of the hospital.  Over 36 million dollars is owed to creditors including employees.  It bears repeating that should the allegations be true, as demonstrated in the recent news articles, this cast serious doubt as to the true intentions of the Hospital Authority. 

Generally speaking, healthcare costs are less controlled at for profit hospitals.  As per the New Jersey Hospital Association website a chest pain admission at Bayonne Medical Center (BMC) costs on an average of $29,000 where as the average in Hudson County is $14,000.  HUMC provides the second largest amount of charity care in Hudson County behind Jersey City Medical Center (JCMC)-reducing charity care admissions will leave the public with less access to care in a setting that is controlled by increased traffic flow and poor traffic patterns.  Although the proximity of the two hospitals is close, the reality of getting to JCMC in an emergency when HUMC may be closer presents a logistical challenge. 

Often, for profit models discontinue money losing services that provide important benefits to the community.  This certainly decreases the social value of for profit hospitals.  Another step most for profit hospitals take is to include layoffs in their business model to increase profit margin.  HUMC Holdco recently provided HUMC’s current registered nurses with employment applications with initial terms and conditions of employment. These terms make drastic cuts to current benefits including but not limited to; paid time (sick time and vacation time), pension, differentials, call pay and staffing incentives.  While hourly rates of pay are offered at the Union granted concession rates of 2010 (7% below scale), Holdco’s asserted broad cancellation rights make the wage offer almost meaningless.  HUMC Holdco has not committed to fully staffing the facility as evidenced by their lack of commitment to hire back 100% of the workforce.  Long term employees can be terminated without cause or recourse so that the offer of employment may be a short lived in an attempt to comply with the Asset Purchase Agreement (APA) condition hiring of 75%.  The terms of employment offered are less attractive than those at BMC which were arrived at after a filed bankruptcy and a lock out of the workforce. When the Hoboken Municipal Hospital Authority gave Holdco no guidelines regarding employment conditions they ignored the service of all the employees of HUMC and the mutually cooperative labor relations enjoyed at this facility for more than thirty (30) years.  

We raise employment issues because we understand that having a sufficient, competent professional staff is a condition of granting a CON. 

We are not against organizations making money; however, meaningful employment is paramount to quality health care delivery, especially when you have experienced caring individuals that have dedicated their livelihood to their patients.  I would argue that considering the current unemployment climate, now hovering at 9.4% in New Jersey, downsizing for the sake of profit is not conducive to a community hospital’s mission or to Hoboken city’s employment picture. 

Thank you again Senator Weinberg, Senator Vitale and members of the Senate Health Committee.  We are available to answer any questions.