“That’s definitely considered a rash number of filings,” she says.

But it wasn’t solely the recession that pushed these hospitals over the edge.

“In reality, the financial pressures on New Jersey hospitals preceded the recession,” McKean-Kelly says. “Reimbursement pressures on the state contributed not only to bankruptcy filings but also hospital closings.”

Of the six hospitals that filed, two emerged: St. Mary’s Hospital and Bayonne Medical Center.

McKean-Kelly points out hospitals can run into financial problems if they accept a lot of patients covered by Medicare, Medicaid or New Jersey’s Charity Care.

“All three of those major government programs pay hospitals less than it costs to take care of patients,” she says, explaining that Medicare pays New Jersey hospitals 89 cents on the dollar per patient; Medicaid pays just 68 cents on the dollar per patient; and Charity Care ranges from 15 cents to 96 cents per patient.

“The big issue is what we would call the patient mix,” she says.

In other words, hospitals taking more government-covered patients earn less than hospitals taking more privately insured patients.

New York hit hard
Neighboring New York also felt the pain as two major New York City-based hospitals succumbed to financial stress earlier this year. St. Vincent’s Hospital in Manhattan closed its doors in April after filing for bankruptcy, carrying a debt of $700 million, and Harlem’s North General Hospital filed for bankruptcy and subsequently closed its doors in June, $200 million in debt.

Efforts to save St. Vincent’s from closure fell short. The facility was split up, with Beth Israel Medical Center taking on the hospital’s cancer center; Lenox Hill running the urgent care center; and Mount Sinai Medical Center acquiring the HIV/AIDS center.

“In the crucial seconds of a health emergency getting to a hospital in time can literally save a life,” said City Council Speaker Christine Quinn in a statement last February. “Redirecting patients to a hospital miles away is simply not an appropriate response, and we won’t allow our community, especially our senior community, to be left without an emergency care medical center right here, on the west side of Manhattan.”

In April, days before St. Vincent’s closed its doors, Quinn addressed the situation again.

“Only a full-service hospital can fully replace St. Vincent’s Catholic Medical Center,” she said. “However, no hospital has come forward with a proposal to buy St. Vincent’s and [its] massive debt.”

Over the summer, St. Vincent’s was granted court approval to sell its cancer center, hospice and its long-term home health business and certified home health agency.

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