While he won’t go so far as to say it would have scuttled the deal that’s leading to the reopening of Pascack Valley Hospital, Robert C. Garrett said a bill seeking more detailed reporting requirements of for-profit hospital owners would have given his for-profit partner in the deal pause about going forward.

The hospital transparency bill, S-782, would have required the growing number of for-profit own- ers active in New Jersey to submit financial information to the state, similar to what nonprofit hospi- tals disclose to the Internal Rev- enue Service in order to maintain their tax-exempt status. Gov. Chris Christie conditionally vetoed the bill, which has gone to the Health Department for further review.

Garrett, president and CEO of Hackensack University Medical Center, said the partner, LHPHospitalGroup ,had concerns about the bill throughout its development.


"If this law was in effect before they entered the New Jersey market, I think it would give them some pause," Garrett said. "Would that have prevented them from coming? I'm not sure."


Randy Minniear, senior vice president of policy and legislation for the New Jersey Hospital Association, said such concerns could have scrapped the for-profit takeovers of Bayonne Medical Center and Hoboken University Medical Center. Discouraging for-profit operators from resuscitating strug- gling hospitals, he said, could push those operators to abandon such plans, leaving entire communities without local facilities.


Minniear said the NJHA did not bother to offer alternative language or regulations while the bill was being drafted, since the entire concept would put New Jersey at a competitive disadvantage.


"To our knowledge, there is no type of reporting requirement that would meet this level for the for-profit community in any of our neighboring states," Minniear said. "New Jersey is criticized for its busi- ness climate in general, and I think ... the administrative burden it could create adds to that list of disincentives for folks who are considering coming into New Jersey."
St. Joseph's Healthcare System's board recently ended negotiations with Ascension Health Care Network, a for-profit, Catholic system, after months of negotia- tions. In a statement, the board's members said going for-profit was not in the best in- terest of the Paterson and Wayne hospitals.


Garrett said the reporting requirements would not only increase administrative workloads, but the costs associated with fi- nancial reporting, too.


"It might sound like nothing, but it does cost money to put together a 990 form, to hire outside accountants to make sure it's all accurate — and every agency has a different requirement," Garrett said.


Also, Garrett pointed out that for-profit hospitals pay taxes, meaning "they are giving back to the community already."


But state Sen. Joseph Vitale (D-Middle- sex),co-sponsorofthebill,isworriedthatif some additional reporting requirements are not enacted, the costs will be paid by taxpay- ers not knowing where the state's charity money is going. He said there are good and bad actors in both for- and nonprofit health care, but a recently leaked audit of Meadow- lands Hospital Medical Center reinforced, in Vitale's mind, that when for-profits are in- volved, "it's always been money first, then patients next, and staff after that."


"All this veto does is to kick the can down the road, and fails to address the ur- gent need for transparency and oversight of this new breed of for-profit hospitals," Vitale said. "There is an urgent need for this law. ... Hospital licenses are a privilege and a con- tract with the public. They are not a private contract among investors and Wall Street."


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