Hospitals, already reeling, face $38M in cuts in new NJ budget

New Jersey hospitals have sustained a combined impact of nearly $1 billion from lost revenue and increased expenses due to the coronavirus pandemic – and now face another loss from proposed cuts in Gov. Phil Murphy’s revised budget.

Cathy Bennett, president and chief executive officer of the New Jersey Hospital Association, said the cuts amount to a loss of more than $38 million in state and federal funds. That includes $19.16 million in state funds, which forfeits an equal federal match.

“I’ve got to say, for a budget that emphasizes essential services and the most vulnerable, and knowing what we’ve just experienced with COVID-19’s impact on New Jersey residents, it’s beyond me how hospitals are not seen as essential to those goals,” Bennett said.

Bennett said funding for charity care, which partially compensates hospitals for care they’re required to provide to people without health insurance who can’t afford to pay, would drop by $20.175 million. Graduate medical education funding would drop by $18.15 million.

Bennett said there is a known correlation between where doctors do their hospital residency and where they choose to practice.

“The cut to graduate medical education is a direct impact for tomorrow’s healthcare heroes. Can’t be any clearer than that,” Bennett said. “That’s the needed education for our pipeline of physicians that we need desperately in New Jersey.”

Hospital finances remain wobbly after months when elective surgeries were prohibited, followed by a period in which patients remain wary of visiting. Bennett said this is no time to pile on.

“We’re in the worst public health crisis in a century, and our hospitals are continuing to prepare for a resurgence potentially this fall, particularly with the upcoming flu and pneumonia season,” she said.

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