Cuts in Reimbursement Threaten ED Closures in California

Maybe the direct impact of runaway healthcare costs on our current delivery system is not as far off as we once thought. In my blog I tend to focus a lot on Emergency Departments and how they are key to the hospital's overall operation. So when I read a headline that ED's in California may be forced to close, it gets my attention. We all know that most trends in this country start on the East and West Coast and then work their way into the middle of the country. It is with this in mind that I take great concern about what is happening in Southern California.

We have all been hearing for some time that the state of California is going broke and many publicly funded services are being cut back or having their rate of funding cut. One casualty of these cuts is the Physician Services for Indigents Program in Los Angeles County. Prior to last July physicians had been receiving a whopping 27% of estimated fees for their services to indigent patients flooding Emergency Departments. Since last July this rate has been cut to 18%. No one felt that the previous rate had been too high. It's just that the state is running out of money and can't afford to pay the same rates anymore. This is sounding familiar.

There are 72 hospitals in the county affected by this and half of them are already operating at a deficit. This means that there is no private sector we can cost shift to like we did so well for years after the Balance Budget Act which slashed Medicare rates. There is a domino effect of actions being set in motion here that will have a tragic outcome. Physicians will no longer agree to provide services, some of which are life saving, for this level of reimbursement. And who can blame them. Once the doctors pull out, private ED's will be forced to shut their doors altogether. Remember that ED's can not pick and choose which patients they will take care of. So the well insured and wealthy patients will be losing their local ED as well. With most of the hospitals in the county shutting down their ED's, there will be an unreasonable burden put on the public hospitals in the county.

Will it really get to this point? Are hospitals in the county just practicing some brinkmanship to get their point across? Perhaps, but no one seems confident of this. Hopefully there will be some resolution before things play out under the domino scenario. You can look at this and say that the issue is isolated to California which has a real problem with illegal immigrants. I look at it more as a glimpse into our future on a national scale with the current direction we are taking.

I am anxious to see how things in Los Angeles County play out for further funding of ED care for indigent patients. Maybe we will get some pointers on how to address our needed healthcare reform nationwide.

More on this later.

Mark Brodeur