John 3:16 & Redrider765. Please see my response below to diannseda. There is often no single reason why hospitals go out of business. In NJ, aging infrastructure, the need to invest in costly new equipment, high labor and administrative costs, and unreimbursed care are major contributors.
The simple fact is that Medicare and Medicaid are what keep many, many hospitals open. Why else do hospitals scramble to comply with JCAHO certification (http://www.jointcommission.org/) every three years? So they can continue to be eligible to receive Medicare and Medicaid funding. By removing JCAHO certification, that effectively closes an institution's doors, which is what happened at Cabrini Medical Center, the Manhattan hospital where I used to be the marketing director.
Insurance companies typically negotiate reimbursement rates with hospitals at a discount from the published "rack" rate (think Travelocity and hotel rooms), which is why it is better to go in-network for care when possible. But even at in-network hospitals, you could receive care from an out-of-network physician and be put between a rock and a hard place when your insurance company covers only a percentage of your bill and the medical professional comes after you for the unpaid portion.
There are no easy answers to the healthcare debate, but streamlined electronic medical records & price negotiation are a place to start.

The NJ Hospital Association respectfully disagrees with you. Getting 90% reimbursement of costs from Medicare sure beats the 70% they get from Medicaid and the even less they get for charity care (and the 0% they get for illegal immigrants), but none of those patients keep the doors open b/c none of them pay for the full cost of providing care. Hospitals that consistently lose money shut their doors. The HUMC has lost tens of millions on the 85% of patients who fall in those buckets and has been struggling for years to keep afloat and if they don't turn it around and get some paying patients, the HUMC will join the list of shuttered hospitals in this region eventually as well.

As for your in and out of network comment, I am out of pocket a certain percent no matter which I use until I hit my max out of pocket limits. I might get reimbursed 80% by staying in network but I still pay 20% of every bill til I am out thousands of dollars. So I judiciously watch how I spend my healthcare dollars because I know baring some major catastrophic illness, I am on the hook for a portion of every single bill from every single doctor appt, test or visit to the ER. Making people more accountable for how they spend money on healthcare by making them pay a meaningful part of the expense is the "easy solution". But nobody wants that b/c everyone wants to stick someone else w/ the bill.

Redrider765; reliance on Medicare/Medicaid depends on the hospital. It also depends on billing (based on CPT codes). The lion's share of reimbursements come from procedures (ie. cardiac catheterization) rather than primary care. Medicare reimburses generously for cardiac procedures & joint replacement.

Some departments are money losers (ER) and others are huge profit centers (cardiology and radiology). Rates also vary widely from hospital to hospital, and from medical professional to medical professional. I have seen ultrasound rates anywhere from $600 to $2,000 for the exact same procedure. The CPT code & insurance reimbursement rate is the same regardless of whether you use a 16-slice or 64-slide CT scanner, yet the equipment investment costs are hugely different.

Every hospital & medical professional is chasing the same thing; wealthy, self-paying patients. The battle is not about insurance; it's about a two-tiered healthcare system developing in this country. Many doctors are not taking any health insurance at all anymore because of the billing and approval hassles. I have seen this trend with obstetricians in Manhattan (you have to pay out of pocket and submit bills to your health insurance) and it looks like this is the trend. Doctors and hospitals are focusing on private patients because that is where the money is.

Almost every hospital that has shut down in this state has been overly reliant on Medicare, Medicaid and charity care for patients. Go look up the bankruptcy filings if you don't believe me.

Do you have a link for data related to New Jersey hospital closures? I suspect that large amounts of unreimbursed care played a more significant role in hospital closures than any other factor. I used to write the annual report for my hospital, and year after year the annual losses almost exactly equaled the amount of unreimbursed care.
Of course, you need to have paying customers (employer-based insurance) to help make a hospital profitable. But I have been through the fire drill of two JCAHO screenings and have been told pointblank by senior administration that if the hospital lost the regular payments every two weeks from Medicare and Medicaid then we would have to close our doors. I used to be Cabrini Medical Center's representative at GNYHA meetings (Greater New York Hospital Association) so I do not believe we were alone in relying on those payments.

Also, Redrider765 I don't understand your comments re. in- & out-of-network. The amount your insurance company gets charged varies HUGELY depending on which hospital or physician you go to. The degree of profitability depends on which procedure you get (ie. mammograms & flu shots are money losers) and how much the hospital/physician has invested in equipment and facility upgrades. With in-network care, the amount your insurance will pay exactly equals the amount a hospital or physician charges. With out-of-network care, the sky is the limit for the billable amount.
As the consumer, you are responsible both for your deductible and for any unpaid balance that remains after the insurance company has paid its portion. The amount facilities charge varies enormously; my hospital used to charge insurance companies half the amount for a hospital admission than St. Vincent's two blocks away used to charge. Yet both hospitals have closed in the last couple of years.
Many physicians have stopped accepting Medicaid (low-income w/no age limit) patients simply because the reimbursement rate is too low for them to turn a profit, but the hospital reimbursement rate is quite a different ball of wax; it is rising so that it will match the Medicare rate in 2014. http://blog.acphospitalist.org/2011/01/hospitals-seeing-more-medicaid-patients.html

Kathy, none of your comments have to do w/ the premise of my 1st post, that people w/ insurance subsidize Medicare, Medicaid and charity care by being routinely charged more for the same services. In fact, you seem to agree. And whatever Medicaid might charge in 2014 has nothing to do w/ what they charge now and w/ the hospitals that are going bust now b/c of the low reimbursement rates. If you need further information, I suggest you google it. It is out there in the trade rags, the paper and at sites like the NJHA. And if you need evidence that poor reimbursement rates are killing hospitals, go look at a map and see where the preponderance of the closures are. You will notice they tend to be in areas where patients w/ nice health insurance plans don't tend to live.

As for my comments on in and out of network, my insurance company only reimburses 80% for in-network bills. Out-of-network they reimburse 60%. I pick up the difference until I hit my max out-of-pocket limit which is $7,500. To me it doesn't matter that an in-network provider might charge lower rates b/c 20% of a medical bill out of my pocket is still money out of my pocket. I don't want to pay a dime more than I have to so I avoid going to the doctor or hospital unless absolutely necessary. Only when I determine that I need to go to the doctor and am willing to pay out of my pocket to do it do I worry about who charges how much for what.

Redrider765, this will be my last comment on the subject. I do not know why you are fixating on the whole "who is subsidizing whom" concept. It's not that clearcut. Hospitals have to pay for utilities, insurance, salaries, pension contributions and supplies; these costs are fixed regardless of how the patients pay or how many there are. The name of the game is to try to maximize certain procedures that reimburse generously, thereby generating profits for the institution. You could make the case that cardiology and radiology departments subsidize the ER.
You are making generalizations about Medicare and Medicaid that are simply not the case. I have never, ever heard any industry insider, and I know a lot of them, say they do not want Medicare or Medicaid patients. They are paying patients; the goal of any hospital is patient volume. For Cabrini Medical Center, it was 200 patients per day. >200 and we were profitable, <200 and we weren't.
Hospitals that close tend to be near indigent populations. Indigent populations = unreimbursed care = hospitals operating at a loss. Period.
And it's not like when hospitals close the unreimbursed problem goes away. Hospitals like NY Methodist used to be solidly profitable; with all the hospital closures now they are seeing large amounts of unreimbursed care that is sinking their bottom line.

Kathy - I guarantee you that if hospitals had the ability to turn away patients, they'd love to cater to only people w/ insurance. Doctors are already doing it. But they can't by law so they take them and do what they can to get paid. And all you are pointing out is the obvious fact everyone already knows, beds w/ Medicare/Medicaid patients that are full but you still lose some money on are better than empty beds you lose even more money on. I understand the concept of overhead and contribution margin so I get that, everyone gets that. I also get that when you break out the contribution margin of a Medicare patient vs. an Insurance patient, the margin is far higher w/ the insurance patient. Whatever tangent you want to go off on w/ your responses still doesn't change the fact that you are losing money and will eventually go bust w/ these Medicare/Medicaid/charity care patients b/c they still don't cover the fully loaded cost of care inclusive of overhead. And w/ your Cabrini example, I also guarantee that your break even point would have been far higher than 200 patients if you had only Medicare, Medicaid and charity care cases b/c they pay less than insurance. And that was the point of my 1st post. Insurance companies and the people who have insurance are subsidizing everyone else by paying more for the exact same services.

OK, your about the most obnoxious person i ever witnessed. If someone said it is hot out today you would have some opposite opinion as to why its hot today. No matter what someone writes about you feel the need to monitor your computer and get the first crack at rebutting what someone writes.
First off, your premium has the under insured and uninsured coverage built in. "paying more" at the hospital and the charges they charge has NOTHING to do with the charity care. Second, Insurance plans have established rates/charts as to what a certain procedure cost and can be charged for. So, if vaginal delivery is X, the hospital OVER CHARGES ALL THE TIME. Thats why the term is called usual and customary. Rates go up every February on most plans. This is to offset the losses by the previous years uninsured and under insured. Hospitals and every business out there, reports losses every year for tax purposes. The tax code, which is extensive and archaic has many loopholes to allow these loses to be claimed. Dont be so quick to think cause you see articles and hear news stories that all hospitals/ businesses are losing money that it is the actual case. YOur last sentence is right on the money. Folks who have the fortune of having health care will be tapped to cover those who do not have health care. It almost makes you think of dropping your insurance and just go to ER every time you feel sick cause somehow/someway you will get treated and the bill will get paid.

Paying more absolutely has something to do w/ charity care. The government does not cover the full cost of providing care for charity cases, Medicare or Medicaid to the hospitals. The hospitals pass that cost on to the insurance companies as best as they can by raising prices as much as they can and charging you and the insurance company for as many things as they can get away with. The insurance companies pass that cost on to you in the form of higher deductibles, copays, max out of pocket limits and insurance premiums every time your plan comes up for renewal. And even then, half the hospitals in this state lose money b/c they can't charge you or the insurance companies enough to cover the losses on charity care or any other service provided to people who don't pay the full cost of providing care. As for your rant on the tax code, you can't claim losses and get money back for losses unless you have profits. If you lose money year after year, you go bust. The list of hospitals that no longer exist in this state or surrounding states is not a short list.

BTW - while I may be obnoxious - you seem to completely agree that I am right so wtf is your malfunction? You are being overcharged to help cover bills other people don't pay, you agree and you get all huffy about it w/ me? How about you blame the people responsible, the people who decided hospitals have to treat everyone including those w/o 2 pennies to rub together.

Of course I oppose a single payer system b/c there will be a huge percent of the population who will depend on everyone but themselves to pay for them. I am not a fan of handouts.

Redrider, single payer means just that. The overwhelming majority of people would be covered by a single plan. It is not a handout, it would be covered by tax dollars that most people pay. There would always be the option for the very wealthy to opt out and do their own thing. You say you are not a fan of handouts. Does that include handouts to corporate entities like banks, or just to regular people who depend on them to survive because they are poor, young or disabled?

Read the 3rd sentence of my 1st post again John. I explicitly stated why hospitals charge more there.

Interesting point! I tend to include Hoboken in my titles to give people a frame of reference. As you point out, my pieces are applicable both to Hoboken and Park Slope (very similar stroller populations) but not so much to Topeka, Kansas. I will make sure to include details in followup pieces like how I breastfed all over Hoboken for over two years. This is such a breastfeeding-friendly place, it's great! Never once got a negative comment or funny look even in public places like parks.

Hi, Diann, thanks for the info! One of the issues with health insurance is that the costs and rates vary widely both by geography and demographics. For example, women are more expensive to insure than men since we give birth.
NY and NJ have the highest density of hospitals in the US, with the most teaching hospitals (residencies and internships are funded by the federal government) and the most research; that makes our hospitals very expensive to maintain. All of these hospitals are competing for market share; they have a certain # of beds to keep full and need to keep length of stay low since insurers pay a fixed amount per hospital admission. The facilities also tend to be much older here than in places like TN; capital improvements are expensive. NY and NJ also have large indigent populations who lack insurance to cover preventive care; many people use the ER for routine care like diabetes treatment.
All of this combines to drive up insurance premiums relative to other parts of the country like Kansas. I have toured the hospitals in Kansas City and they are brand-new, state-of-the-art and not at all crowded. Almost makes me want to give birth there :-)