One of the country’s richest hospitals, which caters to Hollywood elites, accepted nearly $28 million last year from an unusual source: a charity that siphons money from other California hospitals, many of which serve the state’s poorest residents.
Cedars-Sinai Health System in Los Angeles secured the grant under California’s recession-era financing scheme that allows wealthy hospitals to take valuable health care tax money from poorer ones. Hospitals across the state agreed in 2009 to the arrangement in order to tap billions more per year in taxpayer dollars to support the state’s Medicaid program, called Medi-Cal.
Now, some of those hospitals serving a greater share of Medi-Cal patients are in dire financial need and face cutbacks and potential closures. But instead of asking for help for only those at greatest risk, California’s powerful hospital industry is putting the squeeze on Gov. Gavin Newsom and fellow Democratic lawmakers for an unprecedented bailout, reports California Healthline.
Hospitals argue that to avert a crisis, they need an emergency infusion of $1.5 billion.
Ads by the California Hospital Association paint a scary picture: “1 in 5 Hospitals are at risk of closure.” Yet another warns, “Health care that millions rely on is at risk.” Those claims are being repeated by state lawmakers as they debate financial rescue for hospitals.
But a California Healthline analysis of state data revealed that despite increased labor costs and inflation, many California hospitals have been profitable in recent years. The industry earned roughly $131 billion last year in patient revenue, a key indicator of profitability — $7.3 billion more than the previous year. After factoring in rising costs, the industry still turned a profit of about $207 million last year. State figures show the industry reaped $9.2 billion in patient revenue in 2021, partly a reflection of big swings in the stock market. Read more.
