New Jersey Healthcare System
The healthcare landscape in New Jersey is facing rising health care costs at a rate that is outpacing the rest of the nation. In addition, a growing elderly population is going to create demand for more nursing homes and home care and other geriatric specialists. The state is also feeling the effects of the opioid epidemic that is straining the system. One trend in the healthcare system is addressing healthcare costs for employees, and some health systems have joined together to form the Healthcare 'Transformation Consortium to provide better insurance for their employees and cut costs. Other trends address the quickly rising inpatient and additional expenses, consolidating to increase access to other service areas and protect smaller hospitals from failure, and expansion to adopt a capitated system that treats the entire patient, including services for mental health and addiction issues.
- New Jersey employs one healthcare worker per every 20 residents. However, there are disparities where the Bergen and Camden counties have a disproportionately high number of workers in contrast to the Hudson and Gloucester counties, which have fewer workers and depend on surrounding areas for service.
- The state has a growing elderly population that is creating an increased demand for healthcare services, particularly nursing and residential care. Nursing and residential care facilities are found throughout the state, even in rural areas, and clusters are located near populous centers and along the coast due to the larger portion of older people. This trend should result in substantial increases in the need for workers in gerontology, physical therapy, and residential and home care.
- Between 2004 and 2017, the number of urgent care facilities almost doubled and the number of workers nearly tripled. These urgent care facilities alleviate the stress on hospital emergency rooms.
- Taxpayers will spend $3.4 billion to cover the 800,000 New Jersey public workers.
- Hospitals have been merging for the past decade due to the Affordable Care Act's emphasis on curbing long hospital stays.
INCREASING HEALTHCARE COSTS
- Inpatient care costs have increased by 40% over four years, and spending on inpatient care continues to rise. The use, price, and overall spending on medical services increased by 18% between 2012 and 2016, compared to the 15% national average. In 2016, New Jersey had the fifth-highest per-person spending, which was about $6,200 per patient. The cost of inpatient care rose 19% even though there was a 19% decrease in hospital use.
- An executive from the New Jersey Hospital Association states that the national trend in treating patients in less intensive, outpatient settings is leading to the price increases as those patients that require inpatient care have more complex needs that cost more. The healthcare community is working to drive the transition to outpatient care.
- Of in-patient services, newborn care increased the most at 50%, and the causes are not known.
- Several of the New Jersey Health Systems have formed the Healthcare 'Transformation Consortium to try to address the issues with costs and deliver a "better insurance product" to their 75,000 employees. The insurance Consortium includes "Atlantic Health System, CentraState Healthcare System, Holy Name Medical Center, Hunterdon Healthcare, St. Joseph's Health and St. Peter's Healthcare System".
- The Consortium provides a solution to lower costs as the "economies of scale will yield indirect savings" and uses a common third-party administrator to handle the administration of their self-insured plans. This action is likely to be a future trend to address the rising costs and providing health insurance to employees. The companies learned from groups like the Catalyst for Payment Reform and Health Transformation Alliance and decided to consolidate their resources to lead change and hope that others will follow suit.
- Hospital systems have been consolidating across the state at a fast pace. In 2017, an estimated 80% of the hospitals were part of a multi-hospital system due primarily to a need to prepare to face deep funding cuts. Mergers also help hospitals avoid duplication and gives them greater access to capital and resources they need to modernize or other service lines to serve the community.
- Hospitals are also consolidating with other types of healthcare providers such as nursing homes and home health agencies for more integrated care, which is better for the patient and reduces costs in the long-run and will impact the rate of readmissions as patients can seek alternative care. The growing older population will likely drive this trend in the future.
- Lourdes Medical Center and Virtua Willingboro Hospital have been renamed Virtua Willingboro Hospital and Virtua Our Lady of Lourdes Hospital, respectively, after being acquired by Virtua. The acquisition brings together Lourdes' geriatric and heart care expertise with Virtua's obstetrics expertise and has 280 locations and more than 13,000 employees.
CAPITATED SYSTEM TO CARE FOR THE WHOLE PATIENT
- The 10th Annual New Jersey Healthcare Market Review (NJHMR) conference featured a keynote address by Barry H. Ostrowsky, President and CEO of RWJBarnabas Health. In his speech, he claims the future of healthcare is going to center on a capitated healthcare system that takes a holistic view and enlists social services to treat the whole patient.
- RWJBarnabas Health was the first to undertake a capitated system in New Jersey as they transitioned from being a healthcare company to a health company. Given the focus on this topic at a top conference for medical providers and its endorsement by Brach Eichler's Healthcare Law Practice, a trusted go-to counselor in the healthcare space, this system may be an upcoming trend for the state.
- Hackensack Meridian Health, New Jersey's largest integrated health system, merged with Carrier Clinic, the state's leading mental health provider, to bolster their mental health and addiction care services to address growing emergency department visits for mental health and addiction issues. The merger will open new addiction treatment centers, offer urgent care centers with behavioral health services on site, and coordinate physical and behavioral health.
- Mergers between hospitals and behavioral health providers are likely to be an upcoming trend due to the almost $2 billion in hospital costs used for opioid overdose care. Also, these mergers will address health reforms such as value-based care that treat the whole patient, not just physical health.
- RWJBarnabas Health and Trinitas Regional Medical Center are in talks for a possible merger. In 2016, RWJBarnabas completed a much larger merger with Robert Wood Johnson University Health and Barnabas Health and is now a $5.4 billion nonprofit network. It created the most comprehensive health system in the state.
- Meridian Health and Hackensack University Health Network merged and also partnered with other companies to add health care services such as "home health care, fitness and wellness, rehabilitation centers and urgent care" centers outside of the hospitals. They state that the healthcare system has been too disjointed, and it is time to integrate care. While they generate $1.5 billion from hospital annual revenue, their non-hospital businesses generate $600 million in revenue, demonstrating the need for capitated care that treats the whole patient.