MLK Community Hospital received another five-star quality rating this summer.
It was the second time the Centers for Medicare and Medicaid Services, a federal agency, rated our South Los Angeles-based hospital in the top echelons of hospitals nationwide. We are one of the few to serve a predominantly safety-net population.
In the eight years since we opened our community hospital, we’ve delivered on our promise of quality care to historically underserved South L.A.—–and we’ve done this while serving a tidal wave of patients. Today, MLKCH’s emergency department cares for more than 110,000 patients a year – more than three times the number projected when the hospital first opened.
You might think that so many patients would be good for the financial health of the hospital. After all, don’t we get paid for the patients we serve? Not quite. Medicaid – the public insurance that covers 76% of our patients – reimburses significantly less than private (commercial) insurance or Medicare for the same services. The amount we get paid for treating Medi-Cal patients in our emergency department doesn’t cover the cost of providing that care. So the more patients we see, the more money we lose. In short: we’re being punished financially as we do an exemplary job.
We receive supplemental payments from the state to subsidize the low rates Medi-Cal pays for treating hospital inpatients. But we don’t receive supplemental payments for patients who are treated in the emergency department. The original projections used to establish the state’s support for the hospital predicted 30,000 emergency care patients annually, a loss that might be absorbed without significant financial impact. But with the volume now over 100,000 a year, the math no longer works.
Here’s what we now know: High patient volume in the emergency department paired with low Medi-Cal reimbursements is a recipe for crippling losses. Add in expensive temporary nurses to care for a high volume of inpatients and you have a hospital in financial trouble. We are rapidly drawing down reserves to cover ongoing losses. Something’s got to give. If nothing changes, we will deplete our reserves—and face insolvency – as soon as 2026. We need action by state leaders to help us bring the hospital to sound financial footing and keep it open to serve the people of South Los Angeles.
Last month the Governor announced that California would provide no-interest loans to distressed hospitals like ours. While we are grateful for the loan, which will help us with short-term cash-flow, it doesn’t solve the ongoing structural imbalance. We need a long-term fix.
We are losing so much money treating the medically vulnerable population of South LA that we’re getting national recognition for our “charity care.” The Lown Institute listed us at number 12 on the list of “most charitable” hospitals in the nation based on our commitment to providing uncompensated care.
That’s wonderful – a true recognition of our determination to serve our community, literally at all costs. It’s also a clear symptom of our unsustainable financial position. We urgently need a new funding formula that recognizes the dramatic increase in patient volume and accounts for the true costs of care.
South LA has been here before. In 2007 King Drew Medical Center, a public hospital, tragically closed. Our community did not have a hospital for seven years.
Policymakers stepped into the gap, determined to ensure that one of California’s highest-need communities got the healthcare they needed. L.A. County and the state paved the way for an innovative public-private partnership that would lead to the creation of a new, private community hospital. Congresswoman Karen Bass sponsored the bill, AB 2599, that aimed to ensure financial sustainability through supplemental funding. The new, state-of-the-art MLK Community Hospital opened its doors in 2015.
In the subsequent eight years, we’ve kept our promise of quality care to South LA. Not only have we received 5-star ratings from CMS, we’ve also been named – for a seventh year in a row – to Cal Hospital Compare’s “Maternity Honor Roll” for good maternal outcomes. We’ve received national recognition for diabetes and wound care. We’ve been called “the hospital of the future” by Politico.
We’re a success story; something all Californians can be proud of. Now we need our policymakers to translate that pride into substantive, supportive action and, in the words of our namesake, keep the dream alive.
