Emergency Departments Losses Increase in 2002, CMA Report Finds

Hospitals in the state lost $460 million in emergency department care in fiscal year 2002, according to a California Medical Association report issued Tuesday, the Fresno Bee reports (Aleman-Padilla, Fresno Bee, 9/22). Researchers studied data compiled by the Office of Statewide Health Planning and Development and found that physicians in FY 2002 reported $175 million in unreimbursed ED care. The report shows that doctors' and hospitals' losses increased by 18% between FY 2000-2001 and FY 2001-2002 (San Francisco Chronicle, 9/22). In FY 2001, hospital ED losses were $390 million (Fresno Bee, 9/22).

Researchers also found that 28 EDs in the state have closed since 2000. ED costs "varied widely" statewide, with Los Angeles County hospitals accounting for nearly one-third of the state's total ED losses, the Chronicle reports (San Francisco Chronicle, 9/22). Los Angeles County EDs last year lost $143 million. Almost 80% of EDs in the state reported a financial loss, with an average loss of $80 per patient (Nguyen, AP/Contra Costa Times, 9/22).

CMA officials attribute the losses in part to low reimbursement rates from HMOs and Medi-Cal, the Bee reports (Fresno Bee, 9/22). According to the Chronicle, the costs of treating the uninsured also contributed to ED losses.

CMA's report is not consistent with findings from a June 2003 report by the California HealthCare Foundation and the University of Southern California indicating that EDs can generate profits for hospitals by increasing admissions in other hospital departments and creating demand for additional care, the Chronicle reports.

Glenn Melnick, author of the CHCF-USC study, said the CMA report does not consider revenue from hospital admissions. He said, "If (hospitals) are in financial crisis, it's not necessarily attributable to only the emergency department," adding, "It's generally attributable to the fact they're losing money on the inpatient side" (San Francisco Chronicle, 9/22).

The report comes as CMA officials are seeking support for Proposition 67, an initiative on the Nov. 2 statewide ballot that would provide $500 million annually for hospitals, clinics and EDs by adding a 3% surcharge on telephone service, except for cellular and business telephone lines. However, CMA has said that the measure is a "quick fix" and will not solve all cost problems in the long term, the AP/ Times reports (AP/Contra Costa Times, 9/22).

CMA CEO Jack Lewin, said, "We face an unraveling of our health care system" (San Francisco Chronicle, 9/22). He added, "We have a crisis in California that we're trying to get across to our legislators."

S. Daniel Higgins, an ED physician and president of the Los Angeles County Medical Association, said, "No businesses can survive these conditions. Our widgets are people, and they're going to be get discarded if we don't fix this problem" (AP/Contra Costa Times, 9/22).

Kelley Sanchez, a spokesperson for Saint Agnes Medical Center -- one of the few hospitals in the state with a profitable ED -- also noted that state mandated nurse-to-patient ratios combined with a nursing shortage is adding significant cost (Fresno Bee, 9/22).

KQED's "The California Report" on Wednesday will examine the CMA report (Cohen, "The California Report," KQED, 9/22). The complete segment will be available online in RealPlayer after the broadcast.

Additional information on Proposition 67 is available online.