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California 'Safety-Net' Hospitals at Risk Amidst Health System Changes

Mar 17, 2015

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Credit Andrew Nixon / Capital Public Radio

Throughout California, many hospitals that serve mostly low-income patients face financial strains. And as Health Care Reporter Pauline Bartolone in Sacramento found, changes in the health care system are making the problems even worse.

Safety-net hospitals serve a higher percentage of the uninsured, and low-income patients who have Medi-Cal. Jan Emerson-Shea with the California Hospital Association says these hospitals often don't have enough patients with higher-paying commercial insurance to offset losses.

Jan Emerson-Shea: "While Medi-Cal does provide some level of reimbursement to hospitals, we still lose significant amounts of money on every Medi-Cal patient we treat."

Emerson-Shea says recent changes are adding to the burden. Payments to hospitals are being cut under the Affordable Care Act and because of federal sequestration. At the same time, Medi-Cal reimbursements are going down.  And the providers are responsible for expensive seismic retrofits and electronic health record systems. 

Jerry Kominski of the UCLA Center for Health Policy Research says there's reason to be concerned about the prospect of safety-net hospitals closing.

Jerry Kominski: "It means that particularly low-income patients, even if they have insurance, may be more likely to see hospital closures in their neighborhoods, meaning that they have further to go when they have an emergency. And that places more burden on populations that are already vulnerable."

Doctors Medical Center in the northern Bay Area says it's facing closure in the next few weeks. And a network of charity hospitals in the San Francisco peninsula and Los Angeles says it's looking for a buyer to stay in business.