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A article by KQED reports that the pandemic created a perfect financial storm for California hospitals, and some, reeling from that stress, have even gone bankrupt.

In Madera County near Yosemite, Madera Community Hospital , the area’s only general hospital closed in January. That left 150,000 residents without an emergency room or specialty care. Not only have Maderans lost the only general acute care hospital in their county – they’re also at least a 30-minute drive away from the closest hospital with an emergency room.

Today, there’s not a single hospital emergency room in the 55 miles between Merced and Fresno.

Carmela Coyle, president and CEO of the California Hospital Association argued in a recent blog post that what “transpired in Madera County will be replicated in other parts of California” unless the hospitals receive financial assistance from the state. The hospital association has asked the state for $1.5 billion in immediate relief.

A January 2023 report from hospital consulting firm Kaufman Hall affirms the likelihood that in the coming months, even more hospitals will be forced to close or reduce services. – a troubling prospect for communities throughout California and the unfortunate reality that Madera County residents already face.

Its report concluded that “Despite modest margin improvements in November and December, suggesting a positive trendline heading into the new year, 2022 was the worst financial year since the start of the pandemic. Approximately half of U.S. hospitals finished the year with a negative margin as growth in expenses outpaced revenue increases.”

Hospital margins in the western United States were down 69% in 2022 compared to 2019. That’s the worst of any region in the country, and while talk of “margins” often carries overtones of Wall Street and profits, for hospitals they mean something quite different. Low or negative margins simply mean hospitals have fewer resources for nurses, blood supplies, X-ray technicians, behavioral health specialists, and more.

In her blog post, Coyle goes on to say that without help, “cities and towns throughout the state are on track to lose vital community pillars of health care services and jobs.” She A few examples:

– – Kaweah Health in Tulare County is being forced to shed jobs and reduce services to keep the hospital afloat in the face of deep deficits.

– – Hazel Hawkins Memorial Hospital in Hollister received a loan that will help cover expenses through mid-March, but there are no concrete paths forward after that at this time.

– – El Centro Regional Medical Center in Imperial County is facing grave prospects as it is projected to run out of resources to cover costs by April.

And the current 2023 financial problems follows the report that California’s hospitals during the two years of the pandemic, at its peak, lost $20 billion, according to an April 2022 report from hospital consulting firm Kaufman Hall.

Then, inflation gets added to the mix. Labor costs have increased by 19%. Pharmaceutical prices are up 40%. And finally, there’s Medi-Cal reimbursements: A third of Californians are enrolled in the state’s lower-income health plan. “But the state pays only $0.74 for every dollar of care that’s provided to a Medi-Cal enrollee,” said Coyle.

Historically, private insurance payers typically make up Medi-Cal losses, but Coyle says that scale is beginning to tip in the wrong direction.