Center for Studying Health System Change

Urban-Suburban Hospital Disparities Grow in Northern New Jersey

Disparities Could Increase Access and Quality Differences Among Urban and Suburban Patients

News Release
Aug. 4, 2005

FURTHER INFORMATION, CONTACT:
Alwyn Cassil (202) 264-3484 or acassil@hschange.org

WASHINGTON, DC—Hospitals and physicians are aggressively expanding capacity to deliver profitable specialty services in suburban areas of northern New Jersey, fueling concerns about health care costs, according to a new community report released today by the Center for Studying Health System Change (HSC).

The improving financial performance among suburban hospitals has fueled expansion and modernization efforts, while the smaller community hospitals in the urban communities surrounding the city of Newark are confronting declining admissions, growing charity care burdens and deteriorating financial performance. At the same time, safety net hospitals in Newark have financial and institutional protections that-for the time being-protect them from the economic decline experienced by smaller hospitals in surrounding urban communities.

"These developments raise the prospect of widening disparities in care among the three groups of hospitals and the patients they serve," said Paul B. Ginsburg, Ph.D., president of HSC, a nonpartisan policy research organization funded principally by The Robert Wood Johnson Foundation.

Other key findings of the report, Urban-Suburban Hospital Disparities Grow in Northern New Jersey, which is available here, include:

• Growing numbers of specialist physicians are terminating contracts with health plans—or threatening to do so—in an effort to obtain higher payments.
• Employers are shifting health costs to workers, but most are holding off on adopting consumer-driven health plan designs.
• Recent increases in the state’s charity care funding pool have helped hospitals, but access to ambulatory care remains limited for uninsured people.

Northern New Jersey is one of 12 communities across the country tracked intensively by HSC researchers through site visits. The new report is based on a March 2005 site visit and interviews with more than 75 Northern New Jersey health care leaders, representing health plans, employers, hospitals, physicians and policy makers.

The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely research on the nation’s changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is funded principally by The Robert Wood Johnson Foundation and is affiliated with Mathematica Policy Research, Inc.