Lawmakers Pass Bill to Help Struggling Hospitals

California lawmakers passed a bill Thursday that will allocate $150 million to struggling medical facilities around the state. The legislation, AB 112, was prompted by the recent closure of Madera County’s only hospital. As County News reported, that closure left Madera’s 160,000 residents at least 30 minutes away from an emergency room. 

Madera is just the tip of the iceberg. Some 400 hospitals, or 20% of hospitals in the state, are at risk of collapse, according to a report released last month by the California Hospital Association. Many of them are in rural areas. Facilities in El Centro, Montebello, Hawkins, Visalia, Los Angeles, Hollister, Porterville and Arcata are all dealing with fiscal crises. 

COVID-19 was the catalyst for hospitals' financial woes. The pandemic strained resources and temporarily eliminated more lucrative elective surgeries and procedures. A large increase in Medicaid patients reduced profits even further. Then came inflation and increased labor costs. 

Under AB 112, which Gov. Gavin Newsom is expected to sign, struggling facilities can apply for interest-free loans to help keep them afloat. Only nonprofit or public hospitals are eligible. Those in rural areas and those with a disproportionate number of Medicaid patients will be prioritized.

Read more at CalMatters.