Report: S.F. Public Health Subsidies Could Reach Unsustainable Level
San Francisco's general fund contribution to the city's Department of Public Health could reach an unsustainable $4.3 billion over the next five years, according to a report by the city's Office of the Controller and City Services Auditor, the San Francisco Business Times' "Bay Area BizTalk" reports.
Details of Report
Consulting firm Health Management Associates helped produce the report, which included input from DPH officials.
The report lists:
- Challenges the city faces as a result of the Affordable Care Act, including moving from a "provider of last resort" model to a provider "of choice" model;
- Covered California health plans' dearth of contracts with the city; and
- Decreases in federal funding to city programs.
Before the implementation of ACA, there were about 84,000 uninsured residents in San Francisco.
According to the report, about 56,000 of those residents now have access to insurance, but many of those residents have selected private coverage over public health plans.
The report found that San Francisco's general fund contribution to DPH will increase from $554 million per year to $831 million annually by 2018-2019 unless structural reforms are implemented and additional patients gain health coverage.
In addition, DPH is slated to lose 16% of its revenue over that time period as federal and state safety-net funding is reduced, according to the report.
The report warns that funding the city's DPH will become unsustainable if San Francisco does not take steps to reconfigure services and staffing.
The report calls for the creation of:
- A centralized call center; and
- A Managed Care Office to focus on improving performance and obtaining new contracts with Covered California health plans.
In addition, it recommends integrating services offered at San Francisco General Hospital with those offered at the Laguna Honda Hospital long-term care facility.
DPH's CFO Greg Wagner said, "That growth (in annual city subsidies to the public health department) ... cannot happen," adding, "That is not a world we can live in."
Wagner said the city "looked at a number of potential scenarios" for the first Covered California enrollment period that did not pan out. He added, "We did a lot of careful analysis and ultimately decided it didn't pencil out for us."
However, he noted that DPH is in the process of making necessary changes to keep the system operating. In addition, he acknowledged that the city must retain current customers who previously were uninsured in order to maintain revenue (Rauber, "Bay Area BizTalk," San Francisco Business Times, 5/12).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.