This Date in UCSF History: County Hospital Closures Threaten Public Health Care

Thursday, March 29, 2018

[Originally published in Synapse - The UCSF student newspaper, April 3, 1975] A recent report by the Health Policy Advisory Center in San Francisco (Health/PAC) analyzes the trend towards closure of county hospitals throughout California and the ominous consequences which these shut-downs are bringing to health care in the affected areas.

Elinor Blake and Dr. Thomas Bodenheimer, the authors of Closing the Doors on the Poor, say that as many as three million low-income Californians are threatened with losing access to health care if county hospitals disappear in the state.

In the last decade, nine of the state's forty-nine county hospitals have closed down altogether and eight more have been transferred to private ownership or to the University of California. Many other counties are currently considering ways* to close their public hospitals or to transfer them to private hands.

The people who are most severely affected by the closures are an estimated 2.3 million low-income residents of the state who are not covered by Medicare, MediCal, or private insurance. Another 800,000 California residents receive MediCal benefits but also use county hospitals because many private physicians and hospitals refuse to accept MediCal patients.

One important reason for the hospital closures, says the report, is their increasing financial burden on the counties.

Counties began to feel overwhelmed by the expense of running their hospitals following the 1971 MediCal reform act, ex-Governor Reagan's effort to reduce the state government's medical spending by shifting a greater financial load to the counties.

This legislation has resulted in an additional 127 million dollars spent for health care each year by local governments. The high rate of inflation in the health sector has accelerated the cost of maintaining county hospitals.

In the mid-19605, private hospitals and physicians started raising their rates in response to the increased demand put on the system and the institution of government health insurance.

From 1966 to 1970, hospital daily service charges rose three and one half times faster than the cost of all other goods and services. In many cases health care providers charged MediCal patients more than private patients for equivalent services.

These financial pressures eventually led to increased costs for public hospitals and greater strain on county budgets. Already besieged by general inflation, increased demand for services, and calls for lower faxes, many counties closed, sold, or leased their hospitals to eliminate a major expenditure from their budgets.

Bed Surplus

The other major factor affecting county hospital closures in some California counties says the report, is the surplus of beds in private hospitals.

An over-expansion of facilities and a dropping patient census have put economic pressure on the private hospitals to fill their beds (an empty bed costs about two thirds as much to maintain as an occupied one, but produces no revenue.)

One potential source of patients is the MediCal population of the county hospitals. While many physicians on the staffs of private hospitals object to the presence of MediCal patients, private hospital administrators emphasize the need to fill empty beds.

Almost all hospitals have experienced a decline in occupancy rate, but in most counties the decline for the county facility is only moderately greater than for the private hospitals, says the report.

The great majority of county hospitals registered only a 0-4 per cent drop in their share of total admissions in a given area relative to the private hospitals between 1965 and 1972.

In some counties, such as Yolo and Sutter, the shift to private sector was much more pronounced and has created a great strain on the public hospitals.

UC Takes Over

In three of California's most populous counties, the local governments have pulled out of the health care business. In Sacramento, Orange, and San Diego counties, the University of California is (or will be) running the former county hospital for its own teaching purposes.

The low income people in these areas are caught between the need for the university supplied health care on the one hand and the university's stricter financial policies on the other.

While the technical quality of care may be improved by the transfer to university control, the restrictions surrounding access to care are greatly increased. Patients are often required to establish means of payment before admissions, a restriction almost never, encountered in the county hospitals.

In addition to the greater economic burden, says the report, patients at the university-run hospitals receive the dubious honor of becoming teaching material for the medical trainees, the great majority of whom set up practice in the poorer areas served by the former county hospitals.

Confusion at SFGH

San Francisco General Hospital (SFGH), while similar to other California county hospitals in the uncertainty of its continued existence as a public facility, is distinct in one important respect.

The hospital has been the focus of intermittent community and hospital employee activism with sufficient strength to influence and alter the course of events.

Over the past few years, policies of the city government — and reactions to these policies — have created numerous crises for the hospital: three strikes, serious personnel grievances, threats of being closed down, job and equipment freezes.

Out of these tumultuous years came the 1973 Coordinating Council Report, a plan to transform the hospital into a "public health trust" (or quasi- private hospital corporation).

At the same time, charges the report, representatives of the overbedded private hospital sector brought pressure to close or cripple the hospital in order to attract the SFGH patients who are covered by government or private health insurance. Because it lacks adequate financing, which could convert it into a place where people would choose to receive their health care SFGH is in trouble. Moreover, San Francisco's private hospitals, with occupancy rates dropping below 60 percent, have a clear interest in closing SFGH.

Even though the hospital will soon move into a new building, there is still serious question whether it can survive as a thriving public institution.

Future Actions

The Health PAC report provides a thorough analysis of the situation confronting county, hospitals. As the authors point out, the survival of the county hospitals is important not only for the wellbeing of the special low-income population which they serve, but also as an alternative to the profit-motivated private hospitals.

The report suggests that community groups make use of a new law which, requires counties to show that ceasing to operate their hospitals will not have a detrimental effect on the needs of poor people. It also urges health care consumers to press for legislation which would require private hospitals (which already receive more than half of their revenues from public funds) to accept those patients who cannot afford to pay if they have no access to a county hospital.