Catholic Hospitals Brace For Funding Cuts

Special to the Register

THEY COME OFF the streets of Paterson, N.J., every day: the poor and the uninsured. They come seeking medical care at St. Joseph Hospital and Medical Center. The price tag on the services: more than $48,000 a day.

While the hospital provides the care, it's the state's responsibility to pick up the tab, says William Boland, executive director of the New Jersey Catholic Conference.

“[New Jersey] has no public hospitals, per se,” he said. So the state reimburses hospitals, including St. Joseph, St. Peter and New Jersey's 11 other Catholic health care institutions, for providing charity care. But for most of 1996, the state hasn't held up its end of the bargain.

The problem began when a proposal to secure funding for charity programs in private hospitals died in the state assembly late last year. Reimbursements to hospitals remained frozen until last month, when the state finally passed a measure to resume funding. The new two-year measure provides $310 million for the first year and $300 million for the second. The allocated funds fall well short of what many hospitals will need.

All this has New Jersey hospitals and government officials asking, Who is responsible for patients who can't pay?

The answer is especially critical for the state's Catholic hospitals; most are in cities where many people are uninsured or otherwise unable to pay.

The freeze in state reimbursement has left some hospitals unable to pay vendors, and having to cut staff. St. Joseph hasn't had to lay off people yet but it is “missing a lot of cash,” said St. Joseph's president Sister Jane Frances Brady.

Some of the state's Catholic hospitals are involved in a lawsuit filed April 15 by the 114-member New Jersey Hospital Association (NJHA) requesting that the state reimburse them.

The NJHA is still pursuing the lawsuit despite passage of the new funding law, said Ron Czajkowski, the organization's vice-president.

That the law is only temporary, expiring in two years, also means there may be a repeat of this year's funding freeze. Robert DeSando, press secretary to Assembly Speaker Jack Collins, said that the reduced funds the law makes available for charity care is something hospitals may have to get used to it. Collins believes less money should be earmarked for charity care in the future.

DeSando said the amount of money hospitals have received in the past does not encourage cost containment and may even encourage fraud.

To that end, a charity care/managed care program and a “smart card” carrying a patient's medical history have been implemented. The system is designed, DeSando said, to get people out of emergency rooms and into private practice offices or managed care clinics.

A person who comes to an emergency room with flu symptoms, for example, should be referred to one of these alternatives. If not, the hospital might not be reimbursed, he said.

“That's why we believe hospitals will not need that much money in the future,” he added.

Sister Brady sees things differently. She agreed that if a flu patient came to St. Joseph's emergency room, he or she should be referred elsewhere. But savings in managed care, she said, should not be used to support charity care. “They are two separate issues.”

“I think he's (DeSando) completely missed the boat,” said St. Peter's Tofani, citing research that charity care is a $1.2 billion a year problem in the U.S. Tofani wondered who, with the limited budget, was going to pay for managed care. “I think they're really ignoring the problem.”

Even before the cuts, said Sister Brady, New Jersey was not providing enough money for charity care. To be reimbursed, a hospital has to provide documentation from patients they've treated. Some—illegal aliens, for example—have no records, she said. Without documentation, they become what the state calls “bad debt,” for which New Jersey does not reimburse hospitals.

If St. Joseph receives $25 million, for example, it probably provided double that in charity care, she said.

With a long-term solution nowhere in sight, St. Joseph's and the other hospitals continue treating patients without insurance or other resources. The question of who will pay remains.

Christopher Martinez is based in Florida.

The Perils of Government Funding

HOW MUCH SHOULD the Church rely on government funds?

When disaster strikes anywhere in the world, Catholic Relief Services (CRS) is there, providing food and shelter. In calmer times, it provides assistance to agricultural and community projects in developing nations.

But CRS is conscious—and uncomfortable with—its reliance on government money for most of its budget. The organization is reviving its private donation efforts and concentrating more on foundations and grants, said spokesperson Jennifer Brill.

The reason? When government funds get cut, organizations like CRS feel the pinch.

Some institutions are weaning themselves of such public funds. “As reimbursement of charity cases has decreased, we have decreased our reliance on it,” said Jerry Tofani, vice-president of finance at St. Peter Medical Center in New Brunswick, N.J.

The dilemma for charitable organizations is whether to serve more people while funds are available—and to make harsh cuts when they dry up—or to stick to more modest programs regardless of available funds.

Most of CRS' $317 million budget comes from government sources. It receives $100 million for food—31 percent of its budget—from the U.S. Congress. Another $59 million in cash grants comes from the U.S. government for emergency relief and support of development projects. In addition, the government reimburses CRS $53 million for shipping food overseas. All told, just 27 percent of CRS' budget comes from private sources.

Other agencies share CRS' uneasiness about government dependence. “We really don't know what we're looking at for our new fiscal year,” said Todd Hamilton, who depends on federal funds to run senior citizen job training programs in the Baton Rouge, La., diocese. Congress' examination of funding for job training programs “does compel us to look at other possibilities” for funding, Hamilton concluded.

—Christopher Martinez