California hospitals are asking the state's governor for $1 billion in immediate aid to help offset losses related to the COVID-19 pandemic.
The California Hospital Association said Thursday it estimates the state's more than 400 hospitals have collectively lost more than $10 billion as a result of reduced revenue from surgeries and other procedures and higher labor and supply costs amid the pandemic. The organization expects that to rise at least another $5 billion.
Hospitals' revenue has declined in the 20% to 30% range, with some small facilities as high as 60%, partly because they've cut elective procedures and retained capacity for COVID-19 patients, Carmela Coyle, the hospital association's CEO, said on a call with reporters Thursday. Hospitals will need to preserve that capacity in the event cases resurge once stay-at-home orders are lifted.
"California's confidence in daily life can't be restored unless hospitals are funded, stable and operational," she said.
If the money is granted, Coyle said the CHA doesn't have a specific formula for how it would be distributed, but said the organization will hand it out equitably according to losses experienced.
The CHA is asking Gov. Gavin Newsom's office to work with lawmakers to immediately redirect $1 billion from the general fund budget in the current fiscal year, which ends June 30. The organization suggested the money come from unspent Medi-Cal funding resulting from the higher Medi-Cal matching rate under the Coronavirus Preparedness and Response Act and savings from fewer services being provided during the pandemic.
Hospitals are also requesting Newsom dedicate $3.1 billion in his 2020-21 budget to support hospitals using a second Section 1115 Emergency Disaster Waiver request.
California hospitals have already received about $3 billion in federal funds under the CARES Act, which the CHA said represents about 4% of the total federal funds made available to healthcare providers.
Escondido, Calif.-based Palomar Health cut 317 positions last week—roughly 5.5% of its workforce—on top of other cost-cutting measures, CEO Diane Hansen said on Thursday's call. Hansen said one of her biggest fears is not being able to meet agreements with bondholders.
Newsom's office did not immediately return a request seeking comment.