Mercer County Medical Society - Home

Published In THE ASBURY PARK PRESS, Thursday, March 30, 2006
Editorial

A $620-a-bed tax on hospitals proposed by Gov. Corzine - with half the $430 million it would raise earmarked for the general budget - is another example of the Democratic administration’s inability to fund state government without raising taxes. The tax is bad fiscal policy, with the cost ultimately borne by the taxpayers who use the hospitals.

It also threatens to split the state’s hospitals into the haves and the have-nots when it comes to reimbursement for serving Medicaid patients. Hospitals that treat more poor and indigent people will receive more charity care funding while those in suburban areas will receive less. Among the Shore-area hospitals that stand to take a major hit: Riverview Medical Center in Red Bank ($6 million less) and Community Medical Center in Dover Township ($4! .6 million less). Most of the hospitals that would receive substantial increases in aid are in urban areas represented by Democrats. Most of the suburban hospitals are in Republican districts.

Losses of large amounts of Medicare reimbursement money would also put further pressure on hospitals already struggling to maintain profitability. That, too, is not in the state’s best interest.

The Corzine administration’s goal is to come up with a state match to qualify for $215 million in federal money from the Medicaid program. Taking half of the $430 million hospital tax yield produces that match, with the remainder going to the general fund.

Supporters claim this is not a fiscal gimmick, but it is. The hospitals and their patients would pay more so the state could generate an additional $215 million to help balance the budget.

There’s also something wrong with taxing hospitals to come up with money to distribute to other hospitals. As Gary Carter, president of the New Jersey Hospital Association, said, “We are going to be taxed to provide something we are mandated to do.” That’s not fair. The Corzine team should head back to the drawing board to come up with a new source for matching funds that doesn’t rely on new taxes.