California Public Hospitals Face $3 Billion Deficit Over Next Five Years, Report Says
California's 26 public hospitals are facing a budget deficit of at least $3 billion over the next five years because of rising numbers of uninsured patients and declining or stagnant financial assistance, according to a report released yesterday by the California Association of Public Hospitals and Health Systems, the AP/Sacramento Bee reports. The report found that public hospitals absorb 55% of the cost of treating the more than six million uninsured state residents, care that cost a total of $1.6 billion in 2001. The report also found that hospital expenses have risen 53% since 1995, but revenue has not increased equivalently. According to the report, the gap between revenue and expenses by 2007 is expected to be more than $1 billion. "This drastic divergence between revenues and expenses cannot be sustained without extensive reductions in services and loss of access to care for millions of Californians," the report said, adding that the cuts have already begun. For example, Kern Medical Center in Bakersfield last year laid off 130 employees and closed a 25-bed inpatient unit and an outpatient clinic, in addition to reducing the hours of its remaining clinics. The facility also faces additional cuts this year stemming from a $10 million loss. "I think we are really on the brink of disaster in the public hospital system," Denise Martin, the association's president and CEO, said (AP/Sacramento Bee, 5/5). The report is available online. Note: You must have Adobe Acrobat Reader to view the report.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.