Fifty-two Percent Of California’s Hospitals Are Operating In The Red

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“Fifty-two percent of California’s hospitals are operating in the red — they are losing money every day. That is unprecedented,” said Carmela Coyle, president and chief executive officer of the California Hospital Assn. “And while there were hospitals losing money before the pandemic, the pandemic just sucked so many more hospitals into that financial hole that we are really now looking at crisis circumstances in many parts of the state.”

In California, nine rural hospitals have been shuttered since 2005, and 17 are at risk of closing. Kaweah Health Medical Center in Visalia, about an hour’s drive from Madera and the largest hospital in rural Tulare County, is among those bowing under serious financial problems.

Experts in healthcare economics say rural counties typically have less patients than suburban and urban communities — and a high share of those patients are low-income and enrolled in Medi-Cal.

That means there are fewer patients with private insurance whose payments can offset Medi-Cal’s low reimbursement rates. Small hospitals also have less influence than larger ones to bargain rates from private insurance companies.

COVID-19, which thrashed the San Joaquin Valley, distressed the financial downturn. Farmworkers whose jobs were regarded indispensable worked at great risk of liability. Hospitals across the valley were devastated with wave after wave, and farming counties like Fresno and Madera saw some of the state’s highest infection and death rates.

During its half-century run, Madera Community Hospital furnished an essential connection to healthcare for the 160,000 people who call Madera County home. Extending from the heavily farmed floor of the eastern San Joaquin Valley to the forested central Sierra, Madera is majority Latino, and 20% of the population live in poverty.

It was dinnertime when Sabrina Baker, a mother of six, felt the familiar twinge of contractions.

At first, she brushed it off as Braxton Hicks, false labor pains not uncommon in the late stages of pregnancy. But after dinner that night in early January, the pain sharpened and radiated to her back. The contractions intensified, and Baker knew this baby girl was coming fast.

She had a decision to make — and the options weren’t good.

Baker knew she couldn’t make it to the next closest hospital, in Fresno, a roughly 45-minute drive.

Twenty-five minutes after the first contraction and two pushes later, she delivered her daughter, by herself, on her tan love seat. The baby was breech, which only increased the agony and the risk during delivery. When it was over, Baker tied the umbilical cord with new shoelaces and wrapped Onax in a San Francisco 49ers blanket. An ambulance showed up 20 minutes later to take mom and baby to the hospital.

“I mean, I’m lucky,” Baker said, standing outside her home in a swath of Madera County surrounded by cropland and almond groves. “We could have died.”

Two days earlier, Madera County’s only general hospital had shut its doors. The abrupt closure of Madera Community Hospital and its affiliated medical clinics capped years of financial turmoil. Still, most residents in this rural county in California’s geographic center were caught off guard, unaware of just how much was at stake until their hospital was gone.

For most residents, the hospital was more than a place to go when disaster struck. Madera Community helped them sign up for Medi-Cal, the state’s version of Medicaid insurance for low-income adults and children. It was readily accessible by bus, and it coordinated services with community clinics where residents could receive routine care and prescriptions. Sometimes the hospital was the only place people saw a doctor. Unlike the many private providers that exclude certain types of health insurance — including Medi-Cal, with its notoriously low reimbursement rates — Madera Community served everyone.

“It’s the worst thing that could have happened to us,” Tony Camarena said of the closure. Camarena runs a business that enables sending money abroad, and many of his customers made use of the hospital’s services, he said.

Healthcare experts say Madera’s closure — and the untenable financial realities that brought on the collapse — offer a case study on the challenges facing rural hospitals across the country. Nearly 30% of all rural hospitals in the U.S. — more than 600 of them — are at risk of closing, according to the Center for Healthcare Quality and Payment Reform.

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