California hospital leaders seek legislative reprieve for industry ‘broken’ by COVID-19

The COVID-19 pandemic has “left a majority of California’s hospitals financially challenged, unstable and in some cases, broken,” while proposed and existing state regulations are pushing them further over the brink, said the CEO of California’s top hospital trade group.

Speaking to media in a conference call Wednesday, Carmela Coyle of the California Hospital Association said 58% of the state’s hospitals operated in the red in 2020, up from 40% a year earlier, according to a financial analysis released by health-care management consultant Kaufman Hall. Coyle cited statistics but also asked hospital chiefs from El Centro Regional Medical Center in Imperial County, Enloe Medical Center in Chico and UC San Diego Health to join the call and report on how the challenges of the past year affected each of their institutions.

Adolphe Edward, who leads El Centro, said 1 out of 7 Imperial County residents have tested positive for COVID-19, double the rate of New York City. The team at his small nonprofit hospital desperately scrambled for resources, he said, as they were overrun by patients.

“At alarming rates, the patients just kept coming in,” he said. “Initially, we transferred two to three patients daily, but at the height, we were transferring 15 to 20 patients (a day). Well over 700 patients went to hospital beds anywhere from UCSD all the way up to San Francisco hospitals.”

Because of challenges managing the deluge, Edward said he needed assistance making appeals for help. Thankfully, he said, the hospital had a partnership with UCSD Health and its CEO, Patty Maysent, answered his calls for assistance.

Their teams tracked down as many low-cost options as possible, he said, but his expenses mounted to roughly $4 million a day. The hospital grossed just $729.9 million for the 12-month period ending June 30, 2020, according to records it filed with the California Office of Statewide Health Planning and Development, amounting to about $2 million a day.

“We received help from multiple (sources),” Edward said. “… But it wasn’t until we started knocking on (the door of) UCSD Health for ICU teams — and asking their UCSD emergency room teams actually to help us execute with all this expansion — that we started to deliver the right amount of care, but it was extremely costly.”


Like many hospitals, Edward said, he made changes to accommodate more patients for general acute care and for intensive care at the request of state leaders. His 161-bed facility ramped up to 245 beds, with the ICU growing to 62 beds from six.

Before the surge of COVID-19 patients, his hospital averaged 75 patient admissions on a normal day. That figure grew to 190 a day for months amid the pandemic, as a little more than two-thirds of those patients tested positive.

When Edward couldn’t get enough tests to confirm COVID-19 diagnoses, he leaned upon UCSD labs. When the cost of surgical masks went to $1.10 each from 10 cents, he called Maysent and asked whether he could “steal some from her.” It was also Maysent who assisted him in writing letters to appeal for funds to assist with expanding the number of beds at El Centro and to get assistance in getting additional registered nurses as the cost to contract with a traveling nurse surged from $70 to $250 an hour.

Roughly 100 days out from the peak of the COVID-19 surge, Edward said he’s still in a “resource strain.”

“I wake up in the middle of the night wondering if I’ll see more federal relief or think to myself, ‘Without dollars from new … COVID relief, will I have to declare bankruptcy?’” he said. “It’s not really a comfortable feeling to be living in, but that’s what we have to do. I just imagine also 1,200 employees here losing their jobs and the economics of this valley … destroyed.”

The year 2020 brought many extraordinary expenses beyond costs to expand the number of beds and purchase extra protective equipment. Edward said he helped to fund child care to ensure patient-care employees could work. Meeting labor needs also prompted him to pay for temporary lodging for dozens of employees whose homes are across the border in Mexicali.

While the number of California residents getting vaccines are increasing and hospital admissions for COVID-19 patients are declining from their peak, Edward, Maysent and Enloe CEO Mike Wiltermood said hospitals will not be able to just turn on a dime and start earning income from their operations.

Kaufman Hall projects up to 47% of the state’s hospitals will continue to operate in the red this year. There are a number of reasons for this, say hospital industry leaders, and while some such as suspending elective surgeries and shortages of PPE are directly tied to the pandemic, others such as ongoing costs from past natural disasters and mandated seismic retrofits predate it.


The California Hospital Association asked last year that state legislators provide further financial assistance to stabilize hospitals, but none has been secured. On Wednesday, Coyle said the trade group isn’t making a new request for funding from the state.

Rather, she said, they are asking state legislators, Gov. Gavin Newsom and regulators for greater consideration when it comes to proposing or going forward with mandates that require large financial outlays from hospitals.

“What we don’t need are more rocks tied to our ankles,” Coyle said. “One of our guests already mentioned a bill (Assembly Bill 650) being considered in the California legislature that would pay mandatory bonuses to health care workers in 2021, and while there is nothing that we can compare to the incredible health care workers who have been here throughout the pandemic, that idea to require a mandatory bonus has a price tag of $6 billion, and … about $4 billion of that will be for hospitals.”

Coyle also said the state could help by pushing back the 2030 deadline for seismic retrofits, a goal that already was challenging for hospitals.

“Hospitals need … time to financially heal, and we need to make certain hospitals can build back their reserves … their accounts, their ability to serve their communities,” Coyle said. “If we push them over the brink now, what we will do is jeopardize the ability for those hospitals to stay open and their ability to provide any care in the communities they serve.”

Californians can also help their local hospital by following guidelines from the U.S. Centers for Disease Control and Prevention on how to stop the spread of COVID-19, Coyle said. By ending these surges, she said, costs will go down.

“We just continue to urge Californians to socially distance, wear those masks, get a vaccine,” she said. “Everyone needs to pitch in and really help this situation, help to support and protect and strengthen California’s hospitals.”

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