NJ Hospital Closures May be Offset by Incentives

John Commins, December 19, 2012

When community hospitals close, the immediate thought is of the loss of access to healthcare for the people in the service area.

No less important, however, is the economic impact of the closing. Hospitals are economic engines, oftentimes the largest employers in their communities. The ripple effect of a closure is felt almost immediately by the local businesses and municipalities that depend upon the salaries and taxes that hospital employees pump into the local economy.

New Jersey State Assemblyman Jerry Green (D-Middlesex, Somerset, and Union) saw firsthand the effect that the 2008 closing of the 355-bed Muhlenberg Regional Medical Center had on Plainfield, NJ, and the thousands of lives that were disrupted with the shuttering.

"It has had a tremendous impact job-wise," Green says. "At one time we had a little over 1,000 employees, the majority of whom lived in the Plainfield area. Local vendors that offered different services to the hospital were no longer able to do that. We had doctors in the immediate area that used the facility that no longer could afford to do business in the area because the hospital is no longer there, so they have moved out. That was revenue for them. It meant the people who live in the community that worked for them no longer have jobs. These same 1,000 people spent their money in town."

JFK Medical Center now operates Muhlenberg as a satellite emergency room and for outpatient clinical care. JFK's plans to turn the hospital into a shopping and residential development have been criticized by some city residents.

John Commins

John Commins is a senior editor at HealthLeaders Media.

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