California Safety-Net Hospitals 'At Risk' Under Health System Changes

Safety-net hospitals serve a higher percentage of the uninsured, and low-income patients who have Medi-Cal.

Jan Emerson-Shea with the California Hospital Association says these hospitals often don't have enough patients with higher-paying commercial insurance to offset losses.

"While Medi-Cal does provide some level of reimbursement to hospitals, we still lose significant amounts of money on every Medi-Cal patient we treat," she says.

Emerson-Shea says recent changes are adding to the burden.

Payments to hospitals are being cut under the Affordable Care Act and through federal sequestration. At the same time, Medi-Cal reimbursements are going down.  And the providers are responsible for expensive seismic retrofits and electronic health record systems. 

"There are so many factors in our very rapidly changing health care landscape, that I think the safety net hospitals are certainly a group of facilities that are going to be at-risk," she says.

Emerson-Shea says not every hospital that serves the poor will struggle financially.

Jerry Kominski of the UCLA Center for Health Policy Research says there's reason to be concerned about the prospect of safety-net hospitals closing.

"It means that particularly low-income patients, even if they have insurance, may be more likely to see hospital closures in their neighborhoods," he says.

"They [would] have further to go when they have an emergency, and that places more burden on populations that are already vulnerable," Kominski adds.

Doctors Medical Center in the Northern Bay Area says it's facing closure in the next few weeks.

And Daughters of Charity Health System, a network of charity hospitals and providers in the San Francisco Peninsula and Los Angeles says it's looking for a buyer to stay in business.