How the Crisis in California's Public Hospital Threatens Access to Care
Total Page：16
File Type：pdf, Size：1020Kb
On the Brink: How the Crisis in California’s Public Hospitals Threatens Access to Care for Millions CALIFORNIA ASSOCIATION OF PUBLIC HOSPITALS AND HEALTH SYSTEMS 70 Washington Street, Suite 310 ! Oakland, CA 94607 ! 510.874.7100 ! fax: 510.874.7111 ! www.caph.org Our Mission CAPH, a non-profit trade organization representing California’s public hospitals and health systems since 1983, works to strengthen the capacity of its members to advance community health; ensure access to comprehensive, high- quality, culturally sensitive health care services for all Californians; and educate the next generation of health care professionals. Our passionate belief that everyone deserves an equal opportunity to enjoy good health—regardless of insurance status, immigration status or ability to pay—drives our policy and advocacy agenda. Copyright © 2003 California Association of Public Hospitals and Health Systems Contents Executive Summary ...................................................................................................................... 2 Introduction ................................................................................................................................... 6 A System on the Brink of Collapse ..............................................................................................6 What’s at Stake .......................................................................................................................... 14 Unstable Patchwork of Funding ...................................................................................................22 Further Cuts Loom ...................................................................................................................... 22 Policy Recommendations ........................................................................................................... 26 Appendix A - CAPH Financial Forecast: Cost and Revenue Assumptions ................................... 30 Appendix B - Unstable Patchwork of Funding Summary .............................................................. 31 Footnotes .................................................................................................................................... 33 CAPH Members .......................................................................................................................... 33 Case Studies Kern Medical Center...................................................................................................................... 4 Los Angeles County Department of Health Services ...................................................................... 8 Alameda County Medical Center ................................................................................................. 12 Tuolumne General Hospital ......................................................................................................... 16 San Francisco General Hospital ..................................................................................................20 UC Davis Medical Center............................................................................................................. 24 Natividad Medical Center ............................................................................................................. 28 List of Figures Figure 1: Concentration of Care to the Uninsured at Public Hospitals ............................................ 6 Figure 2: Total Operating Expenses at Public Hospitals 1995-2001 ............................................... 7 Figure 3: Widening Expense-Revenue Gap at Public Hospitals 2002-2007 .................................. 10 Figure 4: Expense-Revenue Gap at Public Hospitals With and Without Cost Containment Efforts 11 Figure 5: Percent Change in Uninsured Discharges 1995-2001.................................................... 15 Figure 6: Federal Medicaid DSH Allotments to California ............................................................. 22 Executive Summary California’s public hospitals and health systems today confront a severe crisis. Driving this crisis is a steadily growing demand by uninsured and vulnerable patients for health care services matched against a shrinking pool of funds available to pay for that care. If the imbalance between rising costs and declining revenues is allowed to continue, draconian cuts will have to be made. Emergency rooms and trauma centers will close. Thousands of health care workers will be laid off. Entire public hospitals will close. At stake is access to health care for millions of Californians. A System on the Brink of Widening Expense-Revenue Gap at Public Hospitals Collapse 2002 to 2007 Although the rising cost of $8.8 delivering health care impacts all $8.6 providers in the state, public Billions $8.4 hospitals and health systems are $8.2 particularly hard hit because of Cumulative $8.0 $3 billion the large number of uninsured $7.8 patients they serve. In 2001 $7.6 alone, public hospitals provided $7.4 $1.6 billion in care to the Expenses $7.2 Revenues uninsured, more than half of the $7.0 total statewide hospital cost of 2002 2003 2004 2005 2006 2007 caring for the uninsured. At the Source: CAPHOSHPD FinancialAnnual Financial Forecast Disclosure Report same time, local, state and federal funding sources that support public hospitals and What’s at Stake health systems have either declined significantly or, at Although they make up six percent of hospitals best, remained flat. statewide, public hospitals and health systems provide 55 percent of the cost of hopsital care to the unin- The situation is only expected to worsen. Based on sured. They provide 11 million outpatient visits analysis by CAPH, over the next five years California’s annually, serve a patient population that is 76 percent public hospitals and health systems will face a cumula- people of color and train half of the state’s new tive budget shortfall of at least $3 billion. This drastic physicians. Public hospitals also provide life-saving divergence between revenues and expenses cannot be emergency and trauma care that benefits all members sustained without extensive reductions in services and of their communities, both on a daily basis and in the loss of access to care for millions of Californians. event of a disaster or terrorist attack. Millions of low- income and uninsured Californians rely on these essential community providers for their care. 2 Public hospitals and health with the true costs of providing systems throughout the state Why the Crisis in Public care and, in fact, have been cut have already been forced to Hospitals Matters to EVERYONE substantially in recent years. close clinics, shut down inpatient units, lay off staff Although they make up only six per- Further Cuts Loom and reduce urgent care and cent of hospitals statewide, Additional funding reductions in other needed services. The California’s public hospitals and the current and next fiscal years harmful impact of these cuts health systems: at the federal, state and local is felt by all Californians, but levels further threaten the ability falls most heavily on low- ! Provide 55 percent of the cost of of public hospitals and health income families and hospital care to the uninsured systems to continue to meet the individuals who rely on ! Serve a patient population that is 76 health needs of their communi- public hospitals for their percent people of color, including ties. The federal government is currently contemplating several care. Unless policymakers more than 50 percent Latino and stakeholders find ways budget and policy proposals ! Represent 62 percent of the state’s to address this difficult issue, that would severely reduce level I trauma centers even more devastating cuts federal Medicaid funds to the will have to be made. ! Train almost half of all medical public health care safety net. In residents in the state California, the state faces a Unstable Patchwork ! Provide 54 percent of all hospital- projected $26 billion to $34.6 of Funding based outpatient visits to the billion budget deficit and is Public hospitals and health uninsured proposing deep cuts in health care services for low-income systems are uniquely reliant ! Employ more than 70,000 health patients. Counties throughout on a tenuous patchwork of care workers funding made up primarily of California also are experiencing tight fiscal constraints that limit Medicaid revenues and state Without public hospitals, the state’s their ability to fund vital health and local funds. This emergency and trauma care network care programs. The combina- unstable patchwork is the would collapse, thousands of jobs tion of these proposed reduc- result of the lack of a would be lost and millions of Califor- tions, on top of the already comprehensive public policy nians would be forced to go without divergent trend between costs to ensure universal access to needed health care. health care for everyone, and revenues, would accelerate particularly those least able the unraveling of the public to afford care. Moreover, health care safety net. available funds within this patchwork have not kept pace Policy Recommendations: A Two-Pronged Approach 1. Expand health insurance coverage for 2. Preserve the public health care safety net. low-income, uninsured populations. ! Maintain current levels of funding that ! Reduce the number of Californians support public hospitals and health without health insurance through systems. comprehensive and/or incremental ! Target new funds to the public