“We were $45 million in debt and we had $200,000 in the bank,” Mr. Betts, said in an interview on Feb. 1, hours after he announced that the hospital would close. “It’s been a roller coaster since then.”

On the same day, Bayonne Medical Center, 25 miles away, mired in $29 million in debt and in the middle of its own bankruptcy, completed an agreement for its sale to a limited liability corporation that would assume the bulk of its debt. “We looked at everything we could to turn this thing around,” said Dan Kane, the medical center’s chief executive.

Two cities, two struggling hospitals, two wildly different outcomes. What has happened in Paterson and Bayonne paints a vivid picture of the distressed situation of New Jersey’s hospital industry. It also underscores the findings of a commission appointed by Gov. Jon S. Corzine that the state toughen its criteria for deciding which troubled hospitals to save from going out of business.

For years, financially ailing hospitals have routinely appealed to state officials for emergency grants and other measures to help them stay afloat. In the past year, eight hospitals — including Barnert and Bayonne — have received such grants, totaling about $38 million. But the report issued last month recommended that the state reserve such fiscal parachutes for hospitals deemed to be essential, a determination made by weighing factors like the number of poor patients and the proximity of other hospitals.

Nonessential hospitals, the commission said, should “be subjected to market forces and to potentially close.” Mr. Corzine has not set a timetable for acting on the recommendations.

The report does not go as far as a similar review undertaken by the New York State Legislature, which recommended in 2006 that at least nine hospitals be closed down, including five in New York City.

Nevertheless, the commission’s findings have sent a tremor of insecurity through the 78 acute care hospitals in New Jersey at a time when federal statistics show that hospitals here are in worse financial condition than their counterparts nationwide.

Five New Jersey hospitals — including Barnert and Bayonne — have filed for bankruptcy since July 2006. According to the report, 38 of the 80 hospitals reviewed by the commission scored below the statewide average on prime measures of financial viability, including profitability and liquidity. Nearly 60 percent of those hospitals are in the Newark and Hackensack areas. And Barnert will become the 16th acute care hospital in the state to close in the last decade.

At the same time, the report found a glut of hospital beds in the state, particularly in northern New Jersey, where occupancy rates average around 75 percent; roughly 85 percent occupancy rate is considered the benchmark for a hospital to be viable.

The report has sent hospital officials around the state scurrying to explain how the situation got to this point and whose fault it is.

Betsy Ryan, president-elect of the New Jersey Hospital Association, said that her group is finalizing its response to commission recommendations like forcing hospitals to be more transparent about their finances and linking some aid to efficient management.

But she called on state officials to address what she said were chronic underpayments to reimburse hospitals by public insurance programs like Medicaid and the state’s Charity Care program.

New Jersey and Washington are the only states that require hospitals to provide Charity Care, or to treat patients regardless of their ability to pay. Under the Charity Care program, hospitals can draw from a state-financed pool of money — this year about $715 million — to reimburse costs associated with caring for the poor. But the report found that public insurance reimbursements cover only about 70 cents of every dollar spent by the hospital, and sometimes as low as 22 cents to the dollar, Ms. Ryan said.

Those reimbursements are particularly significant in New Jersey where about 1.3 million of the state’s 8 million residents are without health insurance, including 250,000 children.

“Until the state addresses that hospitals are losing money on every Medicaid and Charity Care patient we treat, hospitals will continue to struggle,” she said.

The report predicted that more hospitals are likely to close in the coming years if the state does not establish a system for rescuing financially troubled hospitals or, at the very least, an early warning system, an idea Ms. Ryan said her association welcomed.

Heather Howard, the New Jersey health commissioner, said officials were already working on creation of such an early warning system.

“Unfortunately, a hospital will sometimes come in on Friday and say, ‘We can’t meet payroll; can you help us out?’ ” Ms. Howard said. “I want to move from a culture of crisis management to one of strategic planning.”

Currently, the most common way the state helps ailing hospitals is with grants in the form of an advance on Charity Care funds, the same grants that helped Barnert and Bayonne, though to little avail.

It is unclear whether an emergency fund for distressed hospitals would have helped Bayonne and Barnert, but without it their fates were left to the whims of the market and the appetites of potential buyers.

Mr. Kane, who became the chief executive a year ago, said that the forces that allowed the 278-bed medical center to survive stemmed from hard work and good fortune — hard work in establishing an active campaign to find a buyer and the good fortune to locate one.

Vivek Garipalli, who leads the company that bought the hospital, I.J.K.G., said that despite the fiscal condition of the health industry in New Jersey, he is confident about his company’s $33 million investment in the hospital.

“Bayonne is a very vibrant community where the payer-mix is good,” Mr. Garipalli said in an interview. With Bayonne situated on a peninsula where — in the teeth of northern New Jersey traffic — the nearest hospital is roughly a half-hour’s drive away, “There’s a built-in market here of 62,000 people,” he said.

At Barnert Hospital in Paterson, the problems proved more intractable. After staving off closing for months through a series of intense negotiations with creditors, the hospital was forced to shut down after a deal with a potential buyer fell through.

Its demise leaves Paterson — New Jersey’s third-largest city with 150,000 residents — with just one acute care hospital, St. Joseph’s Regional Medical Center, which does not provide residents with some services offered at Barnert.

But as he prepared to close the hospital earlier this week, Mr. Betts bemoaned the death of what he felt was an important local institution and the loss of more than 300 jobs.