“California hospitals will be facing severe funding losses.”
“If hospitals are starved for the funds they require to operate, they will be forced to cut back on services.”
“OHCA’s actions threaten the viability of the entire health care delivery system.”
These quotes from CHA’s latest legal filing in our lawsuit against the Office of Health Care Affordability (OHCA) underscore what’s at stake for hospitals across California.
With the first enforceable cost target applying this year, combined with last year’s historic federal funding cuts, hospitals must now find a way to relieve some of the financial pressures facing them by cutting staff, access to services, or jeopardizing the quality of care.
For many hospitals, these pressures are simply untenable. Since the start of 2025, hospitals have laid off more than 3,500 employees — also resulting in more than 6,500 jobs lost in the broader community, as hospitals reduced their spending. OHCA’s draconian caps on the resources hospitals have available to spend on care for patients will only cause further reductions in staff, services, and patients’ access to care.
This is not the way in which lawmakers intended for the system to work when establishing OHCA in 2022. But, as CHA’s lawsuit makes clear, OHCA has done nothing to prevent these harms. And, counter to the judge’s initial ruling that the field is not yet experiencing harm as a result of OHCA’s actions, the latest petition establishes — thanks to strong input from members — that hospitals are in fact experiencing immediate, concrete, and negative consequences today.
CHA anticipates the decision on whether the case may proceed within the next few months; if allowed to continue, a decision on the case’s merits would follow.
This lawsuit is one piece of CHA’s advocacy strategy, and there is no silver bullet. We will continue — as we have done since the office’s creation — to speak out at every board meeting, to submit monthly letters calling the office to account for its faulty data, and to ensure that hospital leaders’ perspectives are shared with lawmakers who have oversight of the office’s work.
OHCA’s decisions are wreaking havoc on the hospital field, and CHA will exhaust every avenue to ensure that the office is held accountable for its entire mission: to make care more affordable while protecting access and quality.
