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Hospitals Brace for Another Round of Severe Budget Cuts

State Medi-Cal Cuts Put More Code Blue Financial Pressures on Hospitals

On July 1, hospitals will face a severe 10 percent cut to many of the Medi-Cal programs that provide coverage to nearly 6.7 million low-income and disabled Californians. The cuts, which were signed into law by the governor in February 2008, represent a $500 million loss to hospitals and will severely impact a wide range of services. California's most vulnerable — the uninsured, underinsured and disabled — will have even less access to care!

The stakes are high. The latest round of cuts may also cause rural hospitals to reduce or suspend critical services or close their doors altogether. The surviving hospital emergency rooms will be in a critical condition with more patients, longer wait times and more financial pressures.

Please share CHA's Code Blue advocacy message with legislators and other elected officials, community leaders, opinion leaders and hospital employees. Let them know that the health care crisis in California could become much worse!

To help inform these external and internal stakeholders, CHA encourages you to share with them:

  • A new two-minute video on the widespread impact of the Medi-Cal cuts.
  • The specific impact of the cuts on your hospital — using newsletter template articles CHA has developed. To request these templates, please contact Code Blue at pa@calhospital.org.

California's Community Hospitals at Financial Risk

California’s community hospitals are increasingly operating in a code blue financial condition. Nearly 50 percent of all hospitals are operating in the red, and nearly one-third are operating in a financial category equal to junk bond status.

Access to vital health care services continues to decline due to:

  • The significant under-funding of government programs — totaling $9.7 billion in shortfalls.
  • The nation’s largest uninsured population — 6.8 million and growing.
  • Severe workforce shortages.
  • Ongoing emergency room closures that are putting additional pressures on hospitals and patients.

To learn more:

  • Download a PowerPoint template that can be customized for local Code Blue advocacy presentations.
  • Request a full copy of a Financial Conditions Communications and Briefing toolkit, which includes a five-minute DVD, PowerPoint presentation template and issue talking points, at pa@calhospital.org.

Financial Conditions Communications and Briefing toolkit now available!