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Commission on Commission on Rationalizing New Rationalizing New
Jersey's Health Care Jersey's Health Care Resources Resources
April 29, 2008April 29, 2008
Department of Health and Senior ServicesDepartment of Health and Senior Services
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Commission’s ProcessCommission’s Process
Established by Executive Order-October Established by Executive Order-October 20062006
Comprised of 11 members and chaired by Comprised of 11 members and chaired by Dr. Uwe Reinhardt, Princeton University Dr. Uwe Reinhardt, Princeton University Health Economist and included 3 Cabinet Health Economist and included 3 Cabinet members and Governor’s Officemembers and Governor’s Office
6 Sub-Committees made up of 6 Sub-Committees made up of commission members and industry commission members and industry stakeholders stakeholders
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Commission Sub-CommitteesCommission Sub-Committees
Access and Equity for the Medically Access and Equity for the Medically UnderservedUnderserved
Benchmarking Efficiency and QualityBenchmarking Efficiency and Quality
Infrastructure of Health Care DeliveryInfrastructure of Health Care Delivery
Reimbursement and PaymentReimbursement and Payment
Regulatory and Legal ReformRegulatory and Legal Reform
Hospital/Physician Relations and Practice Hospital/Physician Relations and Practice EfficiencyEfficiency
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Commission’s ChargeCommission’s Charge Assess the financial and operating condition of
New Jersey's general acute care hospitals against national performance levels
Analyze the characteristics of New Jersey's most financially distressed hospitals to identify common factors contributing to their distress
Develop criteria for the identification of essential general acute care hospitals in New Jersey
Make recommendations for the development of State policy to support essential general acute care hospitals that are financially distressed
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Commission’s FindingsCommission’s Findings
Overview of Market:Overview of Market: NJ Hospitals are in poor financial healthNJ Hospitals are in poor financial health
Services (ICU, surgery physician visits) are Services (ICU, surgery physician visits) are utilized at rates much higher than the utilized at rates much higher than the national averagenational average
Nationally Hospital margins are improving Nationally Hospital margins are improving but not in NJbut not in NJ
Without changes in practice patterns and Without changes in practice patterns and reimbursement more closures are comingreimbursement more closures are coming
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Commission’s Findings, Commission’s Findings, cont.cont.
Major Causes of poor financial health:Major Causes of poor financial health:
– Lack of universal coverageLack of universal coverage
– Underpayment by public payersUnderpayment by public payers
– Misaligned incentives between hospitals and Misaligned incentives between hospitals and physiciansphysicians
– Lack of transparency of performance and costLack of transparency of performance and cost
– Need for more responsible governanceNeed for more responsible governance
– Portions of the state are overbeddedPortions of the state are overbedded
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Key RecommendationsKey Recommendations
Develop an Early Warning SystemDevelop an Early Warning System
Increase Oversight of Ambulatory Increase Oversight of Ambulatory providersproviders
Require baseline hospital governance Require baseline hospital governance standardsstandards
Provide a fund to assist distressed Provide a fund to assist distressed hospitalshospitals
Limit uninsured reimbursement to Limit uninsured reimbursement to Medicare rateMedicare rate
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Key Recommendations cont.Key Recommendations cont.
Improve reimbursement to reward Improve reimbursement to reward efficiency and qualityefficiency and quality
Decide whether Charity Care should be Decide whether Charity Care should be concentrated on safety net hospitalsconcentrated on safety net hospitals
Increase funding:Increase funding:– Medicaid physician ratesMedicaid physician rates– Inpatient mental healthInpatient mental health
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Key Recommendations cont.Key Recommendations cont.
Expand Community Behavioral Expand Community Behavioral HealthHealth
Preserve Access to Inpatient Preserve Access to Inpatient Behavioral HealthBehavioral Health
Require enhanced hospital finance Require enhanced hospital finance transparency transparency
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Status of RecommendationsStatus of Recommendations
Legislation being drafted:Legislation being drafted:
– Early Warning SystemEarly Warning System
– Annual Hospital/Public MeetingsAnnual Hospital/Public Meetings
– Limit Uninsured Reimbursement to Limit Uninsured Reimbursement to Medicare Medicare
– Health Care Stabilization FundHealth Care Stabilization Fund
– Enhanced Hospital Board TrainingEnhanced Hospital Board Training
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Status of RecommendationsStatus of Recommendations
Commissioner is meeting with Boards Commissioner is meeting with Boards around the statearound the state
DHSS is requiring monthly reporting DHSS is requiring monthly reporting of key operational and financial of key operational and financial metricsmetrics
Developing Governance regulationsDeveloping Governance regulations