N.J. hospitals' finances fell ill in 2007

By Stacey Burling INQUIRER STAFF WRITER
Posted: November 26, 2008

An analysis of New Jersey hospitals' financial health in 2007 showed they were hurting even before the economy went really sour, the New Jersey Hospital Association said yesterday.

Average margins - the equivalent of profit - for 53 hospitals and health systems were slim. About half of them posted losses for the year, according to the organization's annual report on the financial condition of the state's hospitals.

The report analyzed aggregate figures and did not list individual hospitals. It did crunch the numbers by size, type and location of hospitals. Major teaching hospitals, facilities in the suburbs, and hospitals with 400 or more beds were the healthiest.

The group used the report's findings to continue its plea for better funding from government programs, especially the state's charity-care program.

The problems are likely to get worse as patients lose their jobs - and their health insurance - the group said.

"We think this report is very troubling because it's before the market crash, so to speak," said Betsy Ryan, the association's president and chief executive officer, who emphasized that hospitals are the state's second-largest employment sector.

"With what's happened recently, you can imagine what the '08 figures will look like."

Three New Jersey hospitals closed in 2007, and five filed for bankruptcy, Ryan said. Another five closed in 2008.

The report found that operating margins rose slightly in 2007 - from 0.6 percent in 2006 to 1.3 percent last year. But total margins, which include income from grants and investments, dropped from 3.1 percent in 2006 to 0.9 percent last year.

Contact staff writer Stacey Burling at 215-854-4944 or sburling@phillynews.com.

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