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Let’s Help, not Hurt, California Hospitals’ Mission of Keeping Us Healthy

March 13, 2014

If you or a loved one suddenly needs expert treatment at a hospital, you need that care now. Not tomorrow. Not next week. That axiom is even truer with the implementation of the federal Affordable Care Act. Health care reform has raised expectations, along with the need to expand access to health care for more than 3 million California residents.

It’s a huge issue throughout Southern California. New data from Covered California, the state’s health coverage exchange, show that in the last three months of 2013, one in four new enrollees for coverage lives in Los Angeles County.

Southern California’s non-profit hospitals are working to accommodate the increased demand, but they could be blocked by new, burdensome state regulatory mandates that would effectively shut thousands of people out of the health care they need.

Just last year, the California Legislature considered a measure, Assembly Bill (AB) 975, which would have rewritten the rules by which our hospitals fund community benefit programs—programs that extend needed services to our neighborhoods in an effort to prevent illness and reduce costly visits to the emergency room. Fortunately, this bill was soundly defeated.

Our hospitals are transparent and accountable in their efforts to provide locally tailored community benefit services, and these rules are so well-regarded that California’s current community benefit law served as the model for the Affordable Care Act’s community benefit standards.

The point is simple: don’t try to “fix” something that isn’t broken.

Our hospitals work hand-in-hand with community groups that identify local needs and how best to customize services to meet those needs. Those services can range from cancer research to burn units, trauma centers, and charity care for those who cannot pay.

But even as the system continues to work, there is renewed discussion by politicians seeking to force new mandates on hospitals that would be just as harmful as those which were previously rejected. This year, lawmakers have introduced two bills aimed at “reforming” the community benefit provided by not for profit hospitals. The first one, AB 503 (Assemblymember  Bob Wieckowski, D-Fremont), would require a standardized format for community benefit plans and develop a standardized methodology for estimating the economic value of community benefits provided by non-profit hospitals. The second one, AB 1952 (Assemblymember Richard Pan, D-Sacramento), would require a nonprofit hospital to provide at least 5 percent of net patient revenue in charity care. A hospital that fails to meet the minimum charity care requirement would be required to pay a penalty based on the amount of the shortfall. Both of these bills would attempt to create a “one size fits all” approach instead of allowing hospitals and community stakeholders to craft community benefit programs to meet the individual needs of their communities. 

Tom Campbell, a former congressman and former Director of the State Department of Finance, recently outlined how harmful these efforts could be in an economic study he prepared with his colleagues at the Berkeley Research Group, at the request of the California Hospital Association.

Campbell’s research showed that if new laws requiring more uncompensated care or capping revenues are passed, they would inevitably cut the capacity of nonprofit hospitals to meet public demand. If costs associated with government mandates increase by 10 percent, 54,000 patients would lose access to care every year. That would mean longer lines, more delays, and the unsavory thought of rationing health care. Further, Campbell’s study found that the same 10 percent hike in costs would reduce wages for hospital workers by $413 million and reduce state tax revenues by $25 million a year.

That’s not reform. It’s a prescription for failure, threatening the viability of the Affordable Care Act and its goals of keeping more of us healthy, and out of the hospital or the doctor’s waiting room.

Instead of new regulations, state government should take the physician’s oath of “do no harm,” and let California’s non-profit hospitals continue to serve their communities with well-thought-out programs that hold the promise of good health and a positive future.

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