The New Jersey Department of Health has warned lawmakers that CarePoint Health's Hoboken University Medical Center has been operating at a significant loss this year and has less than a month of cash on hand.
State officials said HUMC is "in financial distress or at risk of financial distress" after evaluating several financial indicators that are part of the department of health's early warning system, according to an Oct. 20 letter to city and state lawmakers. The financial indicators include days of cash on hand, average daily census, days in accounts receivable, average payment period and operating margin.
The department highlighted three metrics that were particularly concerning for the first seven months of the year, the most recent period for which data is available:
- CarePoint's days of cash on hand have been consistently low for the past year and have steadily declined in recent months, with HUMC reporting 25.19 days.
- CarePoint's operating margins are all negative and have declined in the past year, with HUMC reporting -14.14%.
- CarePoint's days in AR remain high, with HUMC reporting 174.18 days.
In mid-April, CarePoint also requested an advance on its charity care funds for all three hospitals, which totaled $10.98 million, "citing emergency cash flow and other financial issues," according to the letter.
CarePoint, which recently converted to nonprofit status, operates a safety net hospital in Hoboken, Jersey City, and Bayonne, N.J., and is pushing for more state funding to treat more than 50,000 uninsured patients in the communities it serves per year.
"CarePoint will keep working with Hudson County’s state legislators, elected officials and community leaders to ensure that every possible step is taken to support the critical work being done every day in these safety net hospitals," a spokesperson for CarePoint told Becker's. "Not being able to provide care to desperate people in need would be a tragic outcome that no one should want to see, but it could become the reality if CarePoint does not receive the financial support it needs."
CarePoint said it aims to improve its financial position through its newly launched philanthropic arm with charitable donations, opening up building naming rights, endowments, new strategic partnerships, enhanced services and the system's CAREs community outreach program.
"The mission that these hospitals strive to follow every day is to care for the needy, and unfortunately that is unsustainable without both philanthropy and state support," according to the health system.