New Jersey hospitals improved their fiscal health slightly last year by freezing wages and eliminating jobs, a report released Thursday by the New Jersey Hospital Association shows. The average operating margin for New Jersey’s nonprofit hospitals climbed from 0.2 percent in 2008 to 1.7 percent in 2009, according to the report. But one-third of the 73 general hospitals in...
Newton Memorial Hospital in Newton in this 2002 photo.New Jersey hospitals improved their fiscal health slightly last year by freezing wages and eliminating jobs, a report released Thursday by the New Jersey Hospital Association shows.
The average operating margin for New Jersey’s nonprofit hospitals climbed from 0.2 percent in 2008 to 1.7 percent in 2009, according to the report. But one-third of the 73 general hospitals in the state still posted losses last year.
"While we certainly enjoy this break in the clouds, the storm hasn’t passed for New Jersey hospitals," said Sean Hopkins, senior vice president of health economics at the hospital association.
A January 2010 hospital survey found half had eliminated jobs in the last two years, one-third put off giving raises, and one-quarter cut back on programs and services for patients.
"New Jersey hospitals have taken some very difficult but decisive actions to counteract the effects of the recession and other financial pressures," said Betsy Ryan, the association’s CEO and president.
The hospital association report follows a Moody’s Investor Services analysis released Monday that said the New Jersey hospital industry’s future will remain uncertain for a while.
"The Great Recession and New Jersey’s weakened economy will result in continued pressures on not-for-profit hospitals, which already include lackluster or declining patient volumes and reduced commercial and governmental reimbursement," the report says. "... We anticipate more hospital closures, payment defaults or bankruptcy filings over the next several years for those hospital that cannot respond effectively and swiftly to these challenges and invest in long-term strategies."
Moody’s assigned negative outlook ratings to Newton Memorial Hospital in Newton, Robert Wood Johnson University Hospital at Rahway, and Saint Peter’s University Hospital in New Brunswick. Newton Memorial is expected to join Atlantic Health System after getting government approval. Atlantic owns Overlook Hospital in Summit and Morristown Memorial Hospital.
Donna Mancuso, spokeswoman for the Rahway hospital, said it has "embarked on a three-year plan to reduce costs, increase revenue, and ensure that it continues to be the premier hospital in our service area. Our lines of credit remain open, making capital available if needed, and we are investing in capital improvements to provide high quality, patient-focused care."