Fighting the Hospital Tax


On Tuesday, I held a press conference at Riverview Medical Center in Red Bank to stand with New Jersey's hospitals against the proposed "sick tax" that hospitals would be forced to pay under Governor Corzine's budget plan.

I commend the Governor for his Herculean efforts to access federal funds, cut spending, and bring New Jersey's finances under control, but this particular plan would hurt our hospitals, and they're already in fragile economic condition.

Hospital executives from all around the state, about 20 in total, joined me for this important event, which I have to thank Riverview for hosting. The Blaisdell Auditorium was packed with about 150 people, including members of the press, doctors, nurses and other individuals who have concerns about the effect this proposed tax could have on healthcare in New Jersey.

Under the tax proposal, hospitals would pay approximately $50 per patient bed each day to generate $430 million for the state. Two hundred fifteen million of that funding would support the state budget, while the other half would be used to attempt to collect matching funds from the federal government under a federal-state partnership that pays for Medicaid services.

If the federal government accepts the plan, funding will be redistributed in a way that would benefit 25 hospitals and work to the detriment of 49 others. There is no guarantee, however, that New Jersey’s proposal will be approved, and recent activity at the federal level seems to suggest that it won't.

If we move forward with this proposal, every county in New Jersey will experience a net loss. We could very likely see hospital closures around the state and, at the very least, reductions in staff. If we balance the budget on the backs of New Jersey hospitals, they cannot help but collapse, or face the possibility of passing their economic burden on to their patients. The end result would be a further reduction in access to health care for New Jersey residents; I don't think that's a risk we should be willing to take.

Although some hospitals in the state would benefit from the plan if it were successful, all of New Jersey’s hospital organizations are united in their opposition to the proposal, which they believe would have an overall negative impact on the health care network in the state.

It doesn’t make sense to place these requirements on the second largest industry in New Jersey, particularly when it is already struggling to stay above water.

Riverview, which would lose over $6 million annually under this proposal, is a great example of what is wrong with the plan.

Just last year, Riverview introduced the $4 million Cyberknife technology, which will help patients who have inoperable tumors and vascular abnormalities. That kind of innovation has made New Jersey’s medical services well-known across the country. But if our hospitals are strained under this new tax, new technologies like Cyberknife will be impossible for them to implement.

Already operating under razor-thin margins, the majority of New Jersey hospitals will find that with the further burden of the proposed tax, it will be too expensive for them to borrow the kind of funding needed to offer new technologies to their patients, or complete capital projects.

I was pleased to read in the Star Ledger today that there has been some significant resistance to the "sick tax" among members of the Senate Budget Committee. Senator Ellen Karcher, who serves the 12th District with me, is firmly opposed to it as well. I know a lot of my colleagues in the Assembly are concerned about it . While I truly appreciate what Governor Corzine is trying to do with the budget, I don't think this plan is worth the risk we would be taking by implementing it.

Here are a couple more photos from the conference:

John Lloyd (far left), President/CEO of Meridian Health; Betsy Ryan, President of the New Jersey Hospital Association; and Richard Scott, M.D., Vice President of Clinical Effectiveness and Medical Affairs at Riverview (far right), all gave impassioned speeches about this topic.