OAKLAND
CHCF report on California hospital finances finds profit declined sharply across the industry last year, following net income of $5 billion in 2020 and $9 billion in 2021
The California Health Care Foundation released a new report today on the financial health of California hospitals — finding that while the hospital system as a whole booked net income of $14 billion during the first two years of the COVID-19 pandemic, annual profit fell sharply to $207 million in 2022. Hospitals reported $10 billion in profit in 2019, the year before the pandemic began.
“This new report is intended to provide policymakers with important data on the financial health of California hospitals — it can help inform a response that ensures access to care in every community,” says Kristof Stremikis, CHCF’s Director of Market Analysis and Insight. “It also highlights the difficult conundrum before lawmakers: While some hospitals are in serious trouble, the sector as a whole remained profitable in 2022. The question is: How can the state effectively assist the facilities and communities that most need it?”
In the report, “Heading for an Acute Crisis? Utilization, Revenue, Expenses, and Margins in California’s Hospitals, 2019-22,” researchers at the University of Southern California studied the financial data of 348 acute care hospitals through the end of 2022, a group of facilities that represent 80% of California’s hospital capacity. (The Kaiser system was not included, along with state facilities and hospitals providing long-term psychiatric care and other non-comparable services).
The report finds that the hospital system as a whole was relatively profitable during the first two years of the pandemic, in spite of operating expenses that climbed 6%-8% annually during that period. In 2022, however, net income across the sector dropped as increased costs continued to erode operating margins and non-operating revenue dropped precipitously. The report found that underlying costs had stabilized, and revenue began to increase modestly in the fourth quarter of last year.
For a small subset of hospitals, however, these trends resulted in “very negative” financial performance in 2022. Hospitals in the bottom quartile averaged -8% revenue margin last year. A handful of hospitals reported bringing in enough revenue to cover just half of their operating expenses.
Medicare and Medi-Cal payment rates are regularly cited for placing financial strain on hospitals, but the report found that the hospitals with the lowest margins were no more dependent on Medicare or Medi-Cal revenue than the average California hospital.
“The data shows that a small, diverse group of California hospitals are experiencing real financial distress,” says Stremikis. “But the very diversity of this group also complicates the state’s response. We hope this report can help inform the hard decisions that still need to be made about the scope and scale of state intervention — and what it will ultimately take to create a more stable, sustainable health care delivery system for every California community.”
Read the full CHCF report online at: https://www.chcf.org/publication/heading-for-an-acute-crisis/
—Submitted
WOODLAND/CLEARLAKE
Interim Chancellor James Houpis to retire May 31
James Houpis, Ph.D., interim chancellor of the Yuba Community College District (YCCD), will retire on May 31, following a 40 plus year career in higher education. Dr. Houpis was appointed as interim chancellor in 2021. The District’s new chancellor, Shouan Pan, Ph.D., will take the helm on June 15.
“We have been fortunate to have a seasoned leader like Dr. Houpis leading us over the past two years as our interim chancellor. His academic and leadership experience, focus on students, and new strategic initiatives have left an indelible mark on the District,” said Juan Delgado, President, YCCD Board of Trustees. “Our students, faculty, administrators and staff are forever grateful for his efforts which have positioned both the District and our new chancellor for future success.”
Topping the list of Dr. Houpis’ contributions during his tenure at YCCD was the launch of a fully online campus, which will expand access to courses that not only support career advancement for working adults but also degree and educational certificate completion. At a time when most YCCD students work at least part time, the online campus will provide much-needed flexibility, putting a community college education within reach for those who might otherwise be unable to attend college. Beyond expanding access to coursework through the online campus, he also led strategies to increase high school student participation in the dual credit programs offered at both Yuba and Woodland Community Colleges and supported expanded enrollments in apprentice programs to support local workforce needs.
Houpis also stabilized the district’s finances, advanced the development of a resource allocation model to promote cost management, advanced salary equity for administrators and classified employees by initiating the District’s first compensation study, improved employee morale by actively working to build a more constructive internal culture, and updated campus websites to make them more functional for students.
—Submitted
