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California's Hospitals Applaud Bipartisan Action By Assembly Health Committee Supporting AB 900

SACRAMENTO, Calif., April 30, 2013 /PRNewswire-USNewswire/ -- The following statement is being issued by C. Duane Dauner, President/CEO, California Hospital Association:

The California Hospital Association (CHA) applauds today's bipartisan 17-0 vote by the Assembly Health Committee to approve AB 900, which would reverse devastating Medi-Cal cuts to health care providers.  Although these reductions amount to a 10 percent reduction for doctors and most other health care providers, the payment cuts are much deeper – averaging 25 percent or greater – for hospital-based skilled-nursing units.

That would mean millions of dollars in losses to acute care hospitals that provide essential care to the elderly and poor patients.  The consequence would be cutbacks and closures that would tear a hole in California's safety net, rip families apart, and punish the most vulnerable and sick among us.  Families would be forced to relocate their loved ones to another facility, perhaps hundreds of miles away.

Medi-Cal beneficiaries make up nearly 80 percent of the patients receiving hospital-based skilled- nursing care. These patients require specialized and medically complex care that freestanding nursing facilities and other health care providers will not or cannot provide. In the last five years, approximately 40 hospital-based skilled-nursing facilities in California (about one-third) have closed due to financial pressures.

The Medi-Cal cuts are not just bad for health care providers and patients, they also pose a risk to the state's overall economy.  Although the state projects the cuts to hospital-based skilled-nursing units will result in a $58 million per year savings in the General Fund, that is only an educated guess. What we do know is that these cuts could translate into a loss of up to 36,000 jobs (16,000 direct caregiver jobs, plus the ripple effect in the broader economy) and a decline of up to $2 billion in statewide economic activity.  These cuts are a classic example of the state being "penny-wise and pound-foolish."

At a time when demand for services is growing dramatically under the Affordable Care Act, cutting funding to providers is the exact wrong thing to do.  CHA looks forward to continued legislative support of AB 900 as the bill moves to the Appropriations Committee.

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