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EDITORIAL: For-profit hospitals need to reveal their profits

Ever since for-profit hospital ownership started becoming more common in New Jersey, it always has seemed like regulators, the public and the not-for-profit care centers have been out to get them. The last few years have seen for-profit operators up against city councils, neighbors, unions — the beat goes on.

In fact, these operators should be welcomed with open arms, if for no other reason than without them, many or all of the hospitals they’ve taken over would otherwise have closed, creating large gaps in care. That’s particularly true in urban areas, such as Jersey City.

However, while we’ve welcomed these operators and encouraged stakeholders to find ways to work effectively with them, it’s only fair that everyone plays by the same set of rules. That’s why we like what we’re hearing out of the office of Health Commissioner Mary O’Dowd, particularly the idea of having for-profit hospital operators publicly disclose their quarterly and annual earnings, as nonprofit hospitals have long been required to do. For-profits’ financials can be accessed through an open records request, which is a cumbersome process that shouldn’t be necessary. And it makes it harder for stakeholders to see, for instance, whether hospitals have contracts with their parent companies or subsidiaries that might represent a conflict of interest or a failure to meet needs of the communities where these hospitals are based.

Critics of O’Dowd’s recommendations have pointed out it doesn’t make sense to insist upon this added transparency when other players in the health care system, from insurers to private physician practices, are largely exempt. You could probably count the number of times we’ve sought additional regulation from the state on one hand, but this just makes sense, especially with more physicians banding together and forming large practices as a means of preparing for additional changes through federal legislation. How effectively these companies are doing business is an important part of allowing consumers to make fully informed decisions about where they go when they need care.

While there has been some pushback from the for-profit players on this initiative, it makes common sense for these operators and investors to go ahead with the increased disclosure. It all comes back to their first point — that there is an inherent level of mistrust between the operators and the communities they serve. Anything those operators can do to prove they’re fully committed to their communities should be done. If their financials say otherwise, then perhaps they need to think about a different kind of investment.

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