HealthLeaders-InterStudy, a leading provider of managed care and healthcare market intelligence, finds that northern New Jersey hospitals continue to experience poor financial performance for a fifth consecutive year, prompting the governor to create a special commission to study the state's healthcare resources. According to the latest Northern New Jersey Market Overview report, rising uncompensated-care costs, a tight labor market, difficult managed care negotiations and intense competition have contributed to the brutal operating climate for hospitals in the state.

"New Jersey hospitals' poor financial performance has led to hospital closures, bankruptcies and management changes," states Patrick Powers, HealthLeaders-InterStudy analyst. "However, the results from the governor's commission will shed light on where improvements can be made."

The state's hospitals have yet to recover from a state rate-setting policy that ended in 1992, which put a stop to hospital price regulation and left provider executives ill-prepared for managed care negotiations. In addition, high labor costs caused by a nursing shortage, insufficient Medicare and Medicaid reimbursement, an older and sicker patient population and a rise in charity-care costs have all proved detrimental to hospital budgets.

With the recent announcement of Gov. Jon Corzine's creation of the Commission on Rationalizing Health Care Resources, the state's supply of hospitals and other healthcare services will be evaluated, as well as their ability to appropriately respond to community needs for high-quality, affordable and accessible care. The commission's findings will be sent to the governor by June 2007.

  Other healthcare news in northern New Jersey:   * Speculation continues over Horizon Blue Cross Blue Shield as an     acquisition target; in August, WellPoint Inc. announced it would     purchase Horizon's nonBlues HMO license in New York.   * Summit Medical Group, a 120-physician multispecialty practice, relocated     in September 2006 to a $50 million, 42-acre campus that may serve as a     national model of integrated patient care and will pose a new level of     competition to area hospitals.    About Market Overviews 

Market Overviews provide a detailed analysis of local healthcare markets, allowing healthcare businesses to plan their local strategies.

About HealthLeaders-InterStudy

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  For more information, contact:   Kelly Morphy   HealthLeaders-InterStudy   615-369-4818 

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SOURCE: HealthLeaders-InterStudy

CONTACT: Kelly Morphy of HealthLeaders-InterStudy, +1-615-369-4818,

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