Urban-Suburban Hospital Disparities Grow in Northern New Jersey

Originally published by the Center for Studying Health System Change (HSC) as a Community Report, 2005.

Growing Disparities Between Urban and Suburban Hospitals in Northern New Jersey

HSC researchers examined the northern New Jersey health care market as part of the Community Tracking Study and found widening disparities between urban and suburban hospitals. Suburban hospitals, serving populations with higher rates of private insurance coverage, were generally faring well financially and investing in facility improvements and service expansion. Urban hospitals, by contrast, faced mounting financial pressures as they served disproportionate shares of uninsured and Medicaid patients while operating aging facilities with limited capital for modernization.

The urban-suburban divide in hospital financial health reflected broader demographic and economic patterns in the region. As populations with employer-sponsored insurance concentrated in suburban communities, the revenue base for urban hospitals eroded. These urban institutions were essential to the health care safety net, providing emergency services, trauma care, and primary care to vulnerable populations that had few alternative sources of care. The growing financial gap between urban and suburban hospitals raised concerns about the long-term viability of urban safety net institutions and the access to care implications for the communities they served.

Health plan competition in the northern New Jersey market was characterized by the dominance of several major insurers, with employers regularly switching carriers to obtain lower premiums. However, this price-focused competition did little to address the structural challenges facing urban hospitals or to promote quality improvement and care coordination across the fragmented delivery system.

Sources and Further Reading

Center for Studying Health System Change, "Urban-Suburban Hospital Disparities Grow in Northern New Jersey," Community Report, Community Tracking Study (2005).