Unions Target Black Box of NJ Hospital Pricing

In response to an unprecedented spike in healthcare insurance premium hikes for essential workers, some of the state’s largest unions, healthcare advocates and social justice nonprofits are forming the New Jersey Coalition for Affordable Hospitals (NJCAH) to press for more transparency on the runaway healthcare pricing. 

The launch at the annual League of Municipalities Convention in Atlantic City comes as municipal and county governments are being forced to address 20 to 24 percent hike in the cost of covering their workforces that bore the brunt of the health consequences, sometimes fatal, of working throughout the pandemic. 

The announcement coincides with the release of a blockbuster research report that suggests that New Jersey’s State Health Benefits Program and School Employees’ Benefit Program could be losing as much as $1.26 billion per year to hospital charges that go well above and beyond commercial breakeven rates. The analysis by New Jersey Policy Perspectives, a nonprofit think tank, found that over the eight year period from FY 2015 to FY 2023 the state’s medical benefits have increased by $417 million despite the fact there are currently 54,000 fewer people enrolled that there we’re in FY 2015. 

“The major takeaway from the research is that the state needs to take action on ensuring that we have fair and reasonable prices in New Jersey and in doing so protect affordable healthcare for all,” said Dr. Brittany L. Holom-Trundy, a senior policy analyst with NJPP during a phone interview. “The fact that we are seeing these increase costs is all a result of  just the patchwork of our healthcare system that we have in the United States. There are so many complex factors that go into coverage prices and that complex network ends up helping to cover up and obfuscating the rising costs permitting stakeholders to use the very costly complexity to play the blame game.” 

Healthcare advocates say the time has long past for the state legislature to hold oversight hearings at which the state’s influential hospital systems are required to publicly disclose what they are charging for common medical procedures.

Godwin Dillion, 41, lives in Montclair and is a janitor who works in New York City and is a member of 32 BJ with pre-existing conditions. Despite his having healthcare insurance, Dillion said during a phone interview he’s often reluctant to be proactive about getting checked out because he’s had instances where a doctor’s office visit resulted in  a bill for thousands of dollars.

“This happens a lot and its a big stress factor—-because you don’t want to go to the doctor to deal with my main concern because it usually leads to another appointment and then there’s another bill and that definitely holds me back from getting stuff checked out when it can mean three appointments,” he said.

Fran Ehret, the executive director of CWA NJ, which represents 55,000 state, county and municipal workers, tells InsiderNJ that unlike another service or product, healthcare consumers are at the total mercy of the hospital and healthcare providers when it comes to pricing, often at their most vulnerable and distressed time.

“There’s just no transparency—we are not able to see the cost drivers and they never explain what they are charging for different services for different procedures and medications,” Ehret said during a phone interview. “For any other transaction you know what your costs are up front before you make a decision. With hospitals you don’t get to do that, You don’t know how much hospitals are being paid or how much they are charging for different services and as public sector workers [working for governments] we are an easy target because these bills are just paid and this leaves a lot of opportunity for hospitals to price gouge.”

Ehret adds that for years the exponential rise in healthcare prices have been “cost shifted” to public employees, their employers and ultimately to taxpayers. “We can’t deal with all of the healthcare’s systemic problems that there are but here in New Jersey this is something we feel we can try and do something about,” Ehret said. 

Ehret’s union is just one of the several unions that are part of the NJCAH that collectively represent close to a half-million public and private sector workers. They include  32 BJ Service Employees International Union (SEIU), Communications of America CWA, the New Jersey Education Association (NJEA) , the New Jersey Police Benevolence Association (NJPBA), the New Jersey Firefighters Mutual Benevolent Association NJFMBA, the Health Professionals and Allied Employees (HPAE-AFT), as well as the Rutgers chapter of the American Association of University Professor (AAUP-AFT).

“Unfair and unjustifiable hospital prices are a clear and present danger to workers, private employers and state and local governments,” said Kevin Brown, New Jersey State Director of 32BJ SEIU. “From being an obstacle to quality and affordable healthcare for workers to draining billions of dollars from state and municipal government budgets at a time when funding for vital services is at risk, we cannot and should not be forced to continue to absorb escalating healthcare costs driven by hospital prices. With heroic doctors, nurses and medical staff saving lives every day, it’s time we stopped allowing private hospital executives to make us sick with their outrageous prices.” 

“When healthcare costs spiral out of control, other priorities suffer. We need real reform and meaningful action to control hospital costs so we can invest those dollars toward our students’ success instead,” said NJEA President Sean M. Spiller.

Other member groups of the coalition include New Jersey Policy Perspective, NJ Citizens Action and the New Jersey Working Families Party.

“Health care is not accessible if it is not affordable,” said Maura Collinsgru, New Jersey Citizen Action’s director of policy and advocacy. “The premium increases in the State Health Benefit Plans are a bellwether of what is happening with health care across New Jersey and are driving us back to a day when people are being forced to choose between paying for health insurance and paying for rent or groceries.”

Collinsgru continued. “We can’t afford to have our state pay extra for unjustifiable hospital expenses when that money should be funding essential medical services for New Jersey residents. NJCA stands by our labor partners in the Coalition for Affordable Hospitals in calling for the immediate action and real reform needed to rein in out-of-control hospital and health care prices, and to ensure health care is affordable for all New Jersey workers, taxpayers and consumers.” 

According to Ehret, New Jersey’s public unions are still pressing their case with Gov. Murphy and the legislature to direct $330 million from the state’s unexpended American Rescue Plan funds to help insulate local governments and taxpayers from the healthcare premium hike.

New Jersey is not alone.

According to a research report from the Commonwealth Fund, a foundation committed to healthcare access, when the U.S. is compared to the world’s other wealthy nations it  “ranks last overall, despite spending far more of its gross domestic product on health care… last on access to care, administrative efficiency, equity, and health care outcomes, but second on measures of care process.”

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