Hospitals Accounted for 12.1% of Southern California Economy in 2004
Hospitals in Southern California in 2004 accounted for about 12.1%, or about $85.5 billion, of the region's economy, according to a study by the Los Angeles County Economic Development Corporation, the Ventura County Star reports.
The study examined the financial impact of 212 hospitals in Los Angeles, Orange, Riverside, San Bernardino, Santa Barbara and Ventura counties (Hernandez, Ventura County Star, 2/28). The Hospital Association of Southern California commissioned the study (Girion, Los Angeles Times, 2/28).
Greg Freeman, a senior vice president for policy at LAEDC, said that the population of the six counties increases by about 300,000 annually and that the population currently is about 16 million.
Jim Lott, executive vice president of health care policy and communications at HASC, said the hospitals would spend $8.2 billion on construction projects in the next five years, in part because of population increases (Ventura County Star, 2/28). Lott attributed some of the construction to efforts to comply with state seismic safety rules (Los Angeles Times, 2/28).
Of the 212 hospitals examined, 107 spent more on patient care in 2004 than they received in reimbursements, the report found (Los Angeles Times, 2/28). Hospital revenue in 2004 amounted to $20.6 billion, but hospital expenditures were $21.4 billion.
In addition, the report found that the number of patient discharges increased by 17% from 1995 to 2004 and that hospital outpatient visits increased by 10% over the same period (Abram/Hopkins, Los Angeles Daily News, 2/28).
Lott said continued population increases would contribute to greater demand for health care services, translating to additional hospital expansion and construction (Ventura County Star, 2/28).
Glenn Melnick, a health economist at the University of Southern California and RAND, said that a study based on data from one year might not provide the most accurate representation of hospitals' circumstances, noting that a longer-term study would indicate that hospital finances have improved since 1999 because of price increases (Los Angeles Times, 2/28).