N.J. health commissioner report pushes for full financial transparency for all hospitals

A report released late Friday by New Jersey’s health commissioner, Mary O’Dowd, recommends that the state require that all hospitals, public and private, for-profit and non-profit, publish their quarterly unaudited financial statements on their websites within 45 days of each quarter’s end, and their annual audits within 180 days of the close of a hospital’s fiscal year.

Because hospitals earn a significant amount of their income from state programs that cover care for the poor, elderly and disabled, the government has authority to request such information. However, according to New Jersey paper The Star Ledger, hospital leaders in the state expressed concern about the need for public disclosure of this information. In particular, hospitals say the quarterly unaudited financial statements would not be very useful for the public, but would provide information to competitors and unions that could put hospitals at a disadvantage in negotiations and efforts to expand their business.

"They are internal working documents with proprietary information. Sharing that information, especially in an unaudited fashion, could confuse consumers and pose risks to the hospital’s business operations and plans," said Kerry McKean Kelly, spokeswoman for the New Jersey Hospital Association, in The Star Ledger’s report.

According to O'Dowd's report, hospitals that do not post the information would incur a daily fine for each day past the date when the information should have been posted. In addition, hospitals would need to disclose contract dealings with business partners.

In New Jersey, as California and other state, the push for financial and price transparency is not just supported by consumer groups. It also has heavy union support. This information, while useful for the public, also helps unions in contract negotiations with hospitals.

According to The Star Ledger, Jeanne Otersen, spokeswoman for Health Professionals and Allied Employees union, said that her organization would also have liked to have seen the state require hospitals to disclose the salaries and other compensation of its top executives. "Those are important – they provide the full picture,” she told the paper.