Media Statement

California Hospitals Recognize Gravity of State’s Budget Crisis, Support Balanced Solutions
Proposed Medi-Cal cuts reflect tough solutions to daunting budget challenge

California’s relentless fiscal crisis presents a daunting challenge for our elected leaders. The state is in the midst of the longest economic downturn since the Great Depression. The budget proposed today by Governor Jerry Brown reflects this difficult reality. Major sacrifices are required. There are no good options left to address a more than $25 billion budget deficit projected over the next 18 months.

It’s important to acknowledge that the Governor and the Legislature face a monumental challenge in getting California’s fiscal house in order. Cuts contained in the proposed budget are distasteful to everyone. California hospitals lost $4.8 billion last year in treating Medi-Cal patients. The Administration’s proposal to increase hospital copayments for the state’s poorest residents will ultimately result in more bad debt incurred by hospitals. It is unlikely that most Medi-Cal patients will be able to afford this increased cost-sharing. As a result, hospitals will face greater losses when they treat Medi-Cal patients.

Also included in the proposed budget is a recommendation that a six-month hospital fee program be implemented. CHA, as one of the co-sponsors of the original hospital fee program, supports a six-month hospital fee, from Jan. 1 through June 30, 2011. CHA is the sponsor of SB 7 (Steinberg, D-Sacramento), the bill that will serve as the legislative vehicle for the fee program.

These are trying times. California’s hospitals recognize that sacrifices are necessary in this difficult budget year. Solutions are needed over the long-term which take into account both the revenue and expense sides of the budget ledger.