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For NJ health care pros, daunting questions loom: Effects of legislative reform, new expansion and preventative care top of mind

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Coming off a generally progressive year, New Jersey's health care industry — providers, insurance companies and hospitals — still face a host of critical questions in 2018: Is value-based care sustainable? Can independent hospitals survive? How will Gov.-elect Phil Murphy deal with individuals who are left uninsured after the federal government's slashing of the individual mandate? And, how can New Jerseyans get some relief from some of the highest health care costs in the country?

Most agree the industry needs to build on its successes from 2017. Further strides were made in the value-based care space, marked by Vanguard Medical Group becoming the first primary care provider to offer telemedicine to all its patients; Hackensack Meridian Health’s move to offer upfront payment options to breast cancer patients; the major health systems continuing to expand, as RWJBarnabas Health finalized a major research partnership with Rutgers University and Hackensack Meridian Health launched the Seton Hall Hackensack Meridian School of Medicine on the former Hoffmann-La Roche campus.

Still, a major focus on lowering the cost of health care and angst over speculation on how the new governor will handle key reforms dominated speculation on what’s to come in 2018.

More comprehensive approach

Barry Ostrowsky.
Barry Ostrowsky.

Focusing on preventative medicine as a means to keeping the cost of health care down must remain a priority in the coming months, according to Cathy Bennett, who became president of the New Jersey Hospital Association in September. Her basic message: The less one is sick, the less needs to be spent on care.

“It may seem simplistic, but ‘good health’ is the most important issue in our health care system in 2018 and beyond,” Bennett said. “Some aspects of our health care system are still steeped in a world where we focus on illness, and the responsibility for those individuals falls almost solely on hospitals and other healthcare providers – even if their illness is the result of societal issues. Our focus in 2018 needs to be on a more comprehensive approach to good health, especially recognizing that social determinants like housing, nutrition and education are key contributing factors.”

Barry Ostrowsky, CEO of RWJBarnabas, the state’s largest health care provider, agreed that community-based health care will be a primary focus in 2018, and he went as far as saying health systems will diversify away from traditional hospitals as their primary revenue source and instead place more emphasis on other assets and services such as ambulatory, community and preventative care.

A growing commitment to addressing social determinants of health will be among RWJBarnabas’ highest priorities this year, Ostrowsky said. A program developed by the provider will work with communities to improve the factors that lead to better overall health of the state’s residents, including housing, employment and nutrition.

“We can provide great health care services, but if the community around us isn’t experiencing better health in their daily lives, then the services we’re providing aren’t really meeting their goals,” Ostrowsky said.

“I think we and others have migrated our mission to focus more on the health of the community than the number of services we are supplying,” he continued. “ … The health of an individual is typically made up of 10 percent genetics; 30 percent is the result of what we do as a health care system in terms of conventional service; and 60 percent has to do with the social determinants of bad housing, low employment, food insecurity, etc.

“So [if] we keep concentrating on the 30 percent, we’re really not going to make the community that much happier or healthier. So our approach is to develop programs that will address the social determinants. It’s not unique to us, but we are doing it in a way that’s more significant than others certainly in this region.”

Continued expansion to drive industry

Robert Garrett.
Robert Garrett.

Robert Garrett, co-CEO of Hackensack Meridian, sees continued growth through mergers and acquisitions in 2018 as his system finalizes the merger with Edison-based JFK Health it announced in May.

“Continued growth and new ventures will define health care in 2018 for our network and the industry,” said Garrett in an email. “We are welcoming JFK Health to our network, which will expand us to 16 hospitals and more than 160 patient care locations throughout the state. … We expect to see more traditional and nontraditional health care partnerships – such as the CVS acquisition of Aetna – entering into our market. The industry will also remain focused on developing more robust population health programs to improve quality outcomes and the patient experience while making health care more affordable – a strategy we wholeheartedly embrace.”

A new administration

On the insurance front, Ward Harris, president of the New Jersey Association of Health Providers, was optimistic the incoming governor will tackle health care reform issues, even despite the repeal of the individual mandate and slashing of cost-sharing subsidies by the federal government.

“The challenge will be to navigate these and other changes with limited state funding opportunities,” said Harris in an email. “After 10 years, the stars seem to be finally aligned to tackle out-of-network reform, ending surprise billing and price gouging for services where consumers had no choice in their provider. Gov.-elect Murphy has indicated support for this reform and state budget savings for tax payers will help propel it to passage.”

NJHA’s Bennett warned that if the GOP-controlled U.S. Congress makes good on its proposals to slash Medicaid funding, it would be devastating to New Jersey.

“In New Jersey, one in every five health care claims is paid by Medicaid,” she said. “It is an essential program for New Jersey families and for the health care system that cares for all of us. We saw some proposed changes to Medicaid in the various Obamacare repeal bills, but any ill-conceived changes to Medicaid could have devastating impacts. We must be very responsible and very careful with the future of Medicaid.

'Unprecedented consolidation'

Leslie Hirsch, interim CEO of New Brunswick-based Saint Peter’s Healthcare System, said he believes independent hospitals such as his will continue to be squeezed by legislation and that most of them have been cut out of lower-cost health insurance plans such as Horizon Blue Cross Blue Shield New Jersey’s Medicare Blue Advantage Plan and the Tier 1 portion of its Omnia plan.

“The unprecedented consolidation of the hospital industry and formation of mega-systems that has occurred in New Jersey will continue to be an important issue in 2018,” Hirsch predicted. “Of the state’s 71 acute-care hospitals, 13 remain independent. It is more important than ever that independent hospitals like Saint Peter’s University Hospital continue to have a voice and be treated fairly when it comes to participation in tiered and narrow payer networks. …We must be allowed to compete with our larger counterparts on the basis of quality and cost.”

Hirsch also hopes that the state’s Legislature will work to repeal old regulations that hinder independent hospitals, such as one that does not allow them to perform life-saving elective angioplasties to heart disease patients.

“We look forward to the Murphy administration and its impact on key health care policy issues,” he said. “It will be important for the new administration to get up to speed quickly with regard to key state and federal health care policy issues, particularly with respect to those that impact hospital funding, and the safety net for the underserved and vulnerable.” 

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Vince Calio

Vince Calio

Vince Calio covers health care and manufacturing for NJBIZ. You can contact him at vcalio@njbiz.com.

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