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News Article

Oct 10, 2007

San Jose Mercury News: Hospitals Willing To Share Cost Of Health Care Reform

C. Duane Dauner

Last month, Gov. Arnold Schwarzenegger called the Legislature into special session to address two major issues facing the state: health care reform and water policy. To get the debate on health care reform under way, the administration has released a "working draft" of a bill. Although compromises undoubtedly will have to be made by the governor and legislative leaders, one constant remains: There must be shared responsibility before a bill is enacted to fix the broken health care system.
During this special legislative session, the governor and Assembly Speaker Fabian Núñez, D-Los Angeles, have pledged to work together. Both have publicly acknowledged that any deal will likely have to go to the voters in the form of a ballot initiative next year. A successful proposal will need the support of all stakeholders: employers, labor, insurance companies, consumer groups, health care providers and the government. Time is running out to achieve this important goal this year.
California has more uninsured residents than any other state - 6.8 million men, women and children. Due to the lack of health coverage, many Californians forgo the care they need and their health conditions become worse. As a result, many end up in hospital emergency rooms, which are increasingly becoming the medical office of first - and last - resort.
California's community hospitals have long supported the goal of health care coverage for all Californians. That is why they have stepped up and taken a leadership role in the health reform debate, announcing their support of the governor's reform proposal despite the fact that it comes with a new 4 percent fee on hospitals.
The funds generated by this new fee would be matched by the federal government and used to eliminate part of the "hidden tax" caused by dreadfully low Medi-Cal payments. Currently, California ranks dead-last in the nation when compared with other states' Medicaid program reimbursements. Some of the new funds generated also would be used to expand health care coverage to the uninsured.
At a time when nearly half of this state's hospitals are operating in the red, the agreement by California's community hospitals to support this fee is truly remarkable.
As legislative leaders and the governor continue to negotiate the details of the health care reform proposal, it is essential that California's hospitals be guaranteed financial and payment protections that will ensure their long-term stability. These protections, which have been agreed to by the governor, will guarantee that funds generated by the new hospital fee will be put directly back into hospital care for patients. Hospitals also would be guaranteed that the money generated would be placed in a separate account from the state's general fund, ensuring that the money could not be siphoned for other uses. Hospitals must benefit from every dollar they contribute. These permanent guarantees must be included in any health care reform deal that is put forth to the voters as part of a 2008 ballot initiative.
California's hospitals are on the front lines of care, providing vital health care services every day to everyone - regardless of their ability to pay. In fact, California's hospitals provided $8.6 billion of uncompensated care last year alone, $2.1 billion of which resulted from payment shortfalls from the state's Medi-Cal program. It is important to understand that any new hospital fee imposed during the health reform process is only one piece of the picture. Other new sources of revenue are also needed to fully expand coverage to all the uninsured in the state.
While California's hospitals are taking a leadership role in health care reform, financial guarantees must be provided and more health care participants must step up to share the financial responsibility.
© 2007 CAHR