NJ Loses $1B Per Year To ‘Unfair, Inflated’ Hospital Prices: Advocates

NEW JERSEY — When New Jersey officials recently announced that the state was jacking up health benefit costs for more than 800,000 government workers – which will likely come at the expense of local taxpayers – it raised an outcry among Republicans, Democrats and other political spectrums alike.

The irony? New Jersey may actually be overpaying on health costs by more than a billion dollars because of “unfair, inflated hospital prices,” a report claims.

Last week, nonprofit advocacy group New Jersey Policy Perspective (NJPP) released a study titled “People Pay, Hospitals Profit: Rising Prices Drive High Health Care Costs.” Researchers said that New Jersey is losing more than $1.26 billion every year to hospital overcharging. Read the full report and see its methodology here.

According to the NJPP:

“Everyone in New Jersey deserves access to affordable health care, yet rising health care prices put high-quality coverage out of reach for far too many. The cost of medical care has outpaced both income growth and inflation for decades, driven in part by increasing hospital prices. When hospitals charge beyond what’s needed to cover their daily operating costs, working families pay more for the same level of care … Escalating prices for health insurance coverage are often attributed to increased utilization, costs to cover services, and inflation; however, these changes do not fully account for the significant climbs. This leaves rising prices and profits as not-so-hidden factors that could be costing state and local governments billions of dollars each year.”

The NJPP report said that recent spikes in premiums for New Jersey state employees highlight how rising health care costs are also passed on to public employees and state and local governments, stretching their budgets thin and costing the state more than $1.2 billion every year.

“By reining in high hospital prices, state lawmakers can make health care more affordable for patients, public employees, and state and local governments alike,” the NJPP stated.

• See related article: Rallies, Outrage Over New Jersey Health Care Hikes
• See related article: State Insurance Hikes Cause Grumbling In NJ County About Tax Impacts

THE FIGHT FOR ‘FAIR HOSPITAL PRICING’

On Nov. 16, several labor unions, community organizations, healthcare advocates and social justice groups in New Jersey announced they were forming a new group – the New Jersey Coalition for Affordable Hospitals (NJCAH) – in an effort to “fight for fair hospital pricing.”

Citing the NJPP report as ammunition, members of the new coalition gathered outside a New Jersey League of Municipalities conference to demand that the state take immediate action to rein in hospital prices.

Their news conference took place just a week after members of the coalition sent a letter to New Jersey State Treasurer Elizabeth Maher Muoio, calling for the public release of a Rand Institute study detailing the cost of hospital care paid by the state.

According to organizers, the Rand Corporation, a national leader on researching hospital pricing trends, has conducted an analysis of the New Jersey State Health Benefits Program’s pricing, which the NJCAH believes should be made public.

“Not only has there been a recent and dramatic rise in the cost of the State Health Benefits Program, but research has also shown that state benefits plan and commercial payers are routinely being charged more than double what a hospital’s actual break-even price (how much a hospital needs to charge to effectively function) would be,” the coalition stated in a news release.

Founding members of the NJCAH include 32BJ, the New Jersey Policy Perspective, Communication Workers of America (CWA), the New Jersey Education Association (NJEA), New Jersey Police Benevolence Association (NJPBA), New Jersey Firefighters Mutual Benevolent Association (NJ FMBA), Health Professionals and Allied Employees (HPAE), the Rutgers chapter of the American Association of University Professors (AAUP-AFT), the New Jersey Working Families Party and New Jersey Citizen Action (NJCA).

“The premium increases in the state health benefit plans are a bellwether of what is happening with health care across New Jersey, and are driving us back to a day when people are being forced to choose between paying for health insurance and paying for rent or groceries,” NJCA director of policy and advocacy Maura Collinsgru said.

“With heroic doctors, nurses and medical staff saving lives every day, it’s time we stopped allowing private hospital executives to make us sick with their outrageous prices,” agreed Kevin Brown, New Jersey state director for 32BJ SEIU.

• See related article: Meet 10 NJ Families Who Had To Crowdfund For Health Care
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