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New Report Confirms Depth of California’s Health Care Crisis

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The latest report from national health care management consulting firm Kaufman Hall shows that one in five California hospitals — dozens throughout the state — is at risk of closure. That means health care services for millions of Californians are at risk. 

On Wednesday, CHA held a statewide media call to discuss the troubling findings in the report and reiterate the need for urgent aid from the state government to prevent more hospitals from shutting down following the closure of Madera Community Hospital at the beginning of the year. Some key numbers from the report: 

  • 20% — The percentage of California hospitals that are at risk of closure. 
  • 52% — The percentage of California’s roughly 400 hospitals — more than 200 throughout the state — that are losing money every day to care for patients. 
  • $23.4 billion — How much more it cost in 2022 to provide hospital care in California compared to pre-pandemic levels. Unlike other services — restaurants, airlines, and grocery stores — hospitals are unable to raise their rates to cover increased costs.  
  • $8.5 billion — The amount that California hospitals lost in 2022. This is on top of the $12 billion in losses (even after federal relief) they sustained during the pandemic.  

The media call yielded several early stories on the financial challenges and more are expected in the coming days. Early coverage includes: 

While the numbers in the report are disturbing, the real cost of this crisis facing hospitals — if help does not arrive soon — will be borne by Californians whose health care services will erode, slowly in some areas, and all at once in others. 

For some, this will lead to longer emergency department wait times, farther distances to travel for care, and “care deserts” for services like maternity care and behavioral health. For others, the change will be more severe with tragic examples where people can’t get to the next nearest hospital for care. 

The state must step up — first with immediate aid for hospitals closest to the edge of the cliff, but then additional support so that more hospitals do not come close to closure in the coming months. Finally, Medi-Cal rates, which have not increased in more than a decade, must be enhanced so that California pays more than 74 cents for every dollar it costs to provide care to Medi-Cal enrollees. 

Failure to act quickly and meaningfully leaves Californians — especially those in disadvantaged communities — without security that the health care services they rely on will be there when they need them.