CALIFORNIA Health Care Almanac JUNE 2021 California's Health Care Safety Net: Essential Access for Millions California's Health Care Safety Net Executive Summary Executive Summary The health care safety net consists of the programs and providers that serve Californians with low incomes. The largest safety-net program in the state is Medi-Cal, which provides health insurance coverage to most legal CONTENTS residents earning less than 138% of the federal poverty level. Many Californians earning more than this threshold Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 have gained subsidized insurance through Covered California, the state's health insurance exchange. Safety-net health care providers have a legal mandate or explicit mission to provide care for patients who Federally Qualified Health Centers . . . . . . . . . . . . . . . . 4 have low incomes and/or are uninsured. These providers include various types of hospitals, clinics, and private Community Clinics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 doctors, many of whom have seen increased demand for their services in recent years. California's Health Care Safety Net: Essential Access for Millions presents data on the providers and programs that Hospitals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 compose California's safety-net system. Glossary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 KEY FINDINGS INCLUDE: • Federally Qualified Health Centers (FQHCs) are an important component of the state's safety net. The number of patients receiving care at FQHCs increased by 60% between 2013 and 2019. FQHCs saw 5.3 million patients in 2019, up from 3.4 million in 2013. The number of organizations serving these patients increased by nearly 40%. • Nearly two-thirds of FQHC patients were covered by Medi-Cal in 2019. • Community health center margins, though still positive, have declined since 2016. The median margin was 6.5% in 2016 but only 2.5% in 2019. • Between 2015 and 2019, both nonprofit and investor hospitals served more Medi-Cal members, with increases in inpatient days and outpatient visits. See current and past editions of California's Health Care Safety Net at www.chcf.org/collection/californias-safety- net-almanac. CALIFORNIA HEALTH CARE FOUNDATION 2 California's Health Care Safety Net Defining Safety-Net Programs and Providers Definitions The Programs The safety net is composed of diverse Safety-net programs, which typically use income to determine eligibility, include the following: • State. Medi-Cal, Restricted-Scope Medi-Cal, and Children's Health Insurance Program (CHIP) health care programs and providers. • County indigent. Also known as Medically Indigent Adult (MIA) programs • Episodic. Breast and Cervical Cancer Treatment Program; Child Health and Disability Prevention Program; Family Planning, Access, Care and Treatment (PACT); and California Children's Services • Covered California. The state's health insurance exchange established under the Affordable Care Act (ACA) • Low-income, nongovernment. Kaiser Permanente Child Health Program The Providers The safety net includes health care providers that by legal mandate or explicit mission provide care for patients who have low incomes and/or are uninsured: • Hospitals. City/county, nonprofit, investor, and district hospitals with county or Medi-Cal contracts and/or designated as critical access or disproportionate share hospitals • Clinics. Federally Qualified Health Centers (FQHCs), FQHC Look-Alikes, community clinics, county clinics, free clinics, and other non-FQHC clinics • Private doctors. Contracted care and charity care Note: See glossary on page 27 for more detailed information. CALIFORNIA HEALTH CARE FOUNDATION 3 California's Health Care Safety Net Federally Qualified Health Centers Federally Qualified Health Centers Patients and Organizations, California, 2013 to 2019 Since 2013, the number of Federally ■ Patients (in millions) Organizations Qualified Health Center patients 180 177 has risen steadily. The number of 177 organizations serving these patients 176 176 increased by nearly 40% over this 151 period, with most of this growth 129 occurring in 2014 and 2015. 3.4 3.7 4.1 4.4 4.7 5.0 5.3 2013 2014 2015 2016 2017 2018 2019 Notes: FQHC refers to Federally Qualified Health Centers. Data do not include FQHC Look-Alikes. Patients includes those who visited an FQHC during the relevant time period. Patients who visited multiple clinic networks may be counted more than once. Source: Uniform Data System (2013–19), Health Resources and Services Administration. CALIFORNIA HEALTH CARE FOUNDATION 4 California's Health Care Safety Net Federally Qualified Health Center Patients Federally Qualified Health Centers by Payer, California, 2013 to 2019 Between 2013 and 2019, the number ■ Other Third Party of patients seen at Federally Qualified 3.4 4.1 3.7 4.4 4.7 5.0 5.3 ■ Medicare Health Centers increased from 3.4 100 ■ Medi-Cal 8.4% 8.9% 8.3% 8.3% 8.5% 8.8% 8.3% ■ Uninsured million to 5.3 million. During that 5.8% 5.9% 6.1% 6.3% 6.3% 6.6% 7.0% time, the percentage of patients with 80 47.3% 58.3% 62.7% 64.5% 65.9% 65.9% 65.1% Medi-Cal increased from 47% to 65%, while the percentage of patients who 60 were uninsured decreased from 39% to 19%. 40 38.5% 20 27.5% 22.4% 20.9% 19.6% 18.9% 19.1% 0 2013 2014 2015 2016 2017 2018 2019 Notes: FQHC refers to Federally Qualified Health Centers. Data do not include FQHC Look-Alikes. Medi-Cal includes Medicaid, Medicaid/CHIP, and other public insurance CHIP. Medicare includes dually eligible (those eligible for both Medicare and Medi-Cal). Other third party includes all other public and private insurance. Source: Blue Sky Consulting Group analysis of the Uniform Data System (2013–19), Health Resources and Services Administration. CALIFORNIA HEALTH CARE FOUNDATION 5 California's Health Care Safety Net Federally Qualified Health Center Patients Federally Qualified Health Centers by Service Type, California, 2017 to 2019 Federally Qualified Health Centers NUMBER OF PATIENTS (IN MILLIONS) have experienced growth in patients 5.3 G ROW T H 2017 TO 2 0 1 9 in nearly all service types. While the 5.0 0.6 ■ Enabling Services 7% 4.7 <0.1 ■ Substance Use 94% largest increase in number of patients 6 0.6 0.3 was for medical services, the largest 6 0.6 <0.1 0.2 <0.1 0.4 ■ Vision ■ Mental Health 34% 30% 0.3 growth rate was for substance use 0.2 0.3 1.3 ■ Dental 20% 1 5 1.2 ■ Medical 14% disorder services. 1.1 4 4.5 0 4.0 4.2 3 2 1 0 2017 2018 2019 Notes: FQHC refers to Federally Qualified Health Centers. Data do not include FQHC Look-Alikes. Enabling services include case management, patient/community education, eligibility assistance, transportation, interpretation, and other services. Source: Uniform Data System (2017–19), Health Resources and Services Administration. CALIFORNIA HEALTH CARE FOUNDATION 6 California's Health Care Safety Net Federally Qualified Health Center Patients Federally Qualified Health Centers Selected Populations, California, 2019 One in 10 patients served by Federally PERCENTAGE OF TOTAL PATIENT POPULATION Qualified Health Centers was an Agricultural Workers or Dependents agricultural worker or dependent, 7% 10% were people who were homeless, and 6% were served by a clinic accessible People Who Were Homeless by residents living in public housing. 7% Residents in Public Housing 6% Students 2% Veterans 1% Notes: FQHC refers to Federally Qualified Health Centers. Data do not include FQHC Look-Alikes. The categories are not mutually exclusive - a person could be included in multiple categories (e.g., veterans and residents in public housing). Students refers to "school-based health center patients." Residents in public housing refers to "total patients served at a health center located in or immediately accessible to a public housing site." Source: Uniform Data System (2019), Health Resources and Services Administration. CALIFORNIA HEALTH CARE FOUNDATION 7 California's Health Care Safety Net Federally Qualified Health Center Patients Federally Qualified Health Centers by Race/Ethnicity and Income, California, 2019 Latinx patients accounted for over half Race/Ethnicity Income of all Federally Qualified Health Center patients with a known race/ethnicity. Other (2%) >200% FPL Nearly three out of four patients with known incomes earned no more than Black 5% the federal poverty level. 7% Asian 9% 101% to 200% FPL 22% Latinx White 57% 25% ≤100% FPL 73% Notes: FQHC refers to Federally Qualified Health Centers. Data do not include FQHC Look-Alikes. Other includes Native Hawaiian / Other Pacific Islander, American Indian / Alaska Native, and More than one race. White, Black, Asian, and Other exclude those reported as Hispanic/Latino. Data exclude patients for which race/ethnicity (20%) and income (18%) were unknown. Source uses Hispanic/Latino and Black / African American. The federal poverty level (FPL) in 2019 was $12,140 for a single person and $25,100 for a family of four. Source: Blue Sky Consulting Group analysis of the Uniform Data System (2019), Health Resources and Services Administration. CALIFORNIA HEALTH CARE FOUNDATION 8 California's Health Care Safety Net Federally Qualified Health Center Revenue Federally Qualified Health Centers by Source, California, 2017 to 2019 Net patient revenue accounted for DOLLARS (IN BILLIONS) the majority of the increase in total revenue between 2017 and 2019. $6.9 ■ Other Revenue ■ Federal Grants During the same time the number of $6.2 $1.0 ■ Net Patient Service patients seen at Federally Qualified $5.5 $0.9 $0.8 Health Centers increased (see page 4). $0.8 $0.7 $5.2 $0.7 $4.6 $3.9 2017 2018 2019 Notes: FQHC refers to Federally Qualified Health Centers. Data do not include FQHC Look-Alikes. Other revenue includes nonfederal grants and contracts and non-patient-related revenue. Totals may not sum due to rounding. Source: Blue Sky Consulting Group analysis of the Uniform Data System (2017-19), Health Resources and Services Administration. CALIFORNIA HEALTH CARE FOUNDATION 9 California's Health Care Safety Net Federally Qualified Health Center Total Patients and Total Costs Federally Qualified Health Centers by Percentile, California, 2019 Federal Qualified Health Centers varied TOTAL PATIENTS in size, from clinics that saw about 1,250 patients in a year to those that 33,762 saw more than 250,000 patients. The median was 14,523 patients and $17.2 million in total costs in 2019. 14,523 7,144 25th Percentile Median 75th Percentile TOTAL COSTS (IN MILLIONS) $8.1 $17.2 $42.0 Note: FQHC refers to Federally Qualified Health Centers. Data do not include FQHC Look-Alikes. Source: Blue Sky Consulting Group analysis of the Uniform Data System (2019), Health Resources and Services Administration. CALIFORNIA HEALTH CARE FOUNDATION 10 California's Health Care Safety Net Federally Qualified Health Center Quality Measures Federally Qualified Health Centers Selected Measures, California and United States, 2019 Across a range of quality measures, ■ California ■ United States the performance of California's Percentage of children 2 years of age who received age-appropriate vaccines by their 2nd birthday Federally Qualified Health Centers was 39% in line with national averages. 40% Percentage of patients 5 through 64 years of age identified as having persistent asthma and were appropriately ordered medication 84% 86% Percentage of patients 50 through 75 years of age who had appropriate screening for colorectal cancer 46% 46% Percentage of patients with Early Entry into Prenatal Care (first visit in first trimester) 78% 74% Percentage of patients 12 years of age and older who were (1) screened for depression with a standardized tool and, if screening was positive, (2) had a follow-up plan documented 68% 72% Source: Uniform Data System (2019), Health Resources and Services Administration. CALIFORNIA HEALTH CARE FOUNDATION 11 California's Health Care Safety Net Federally Qualified Health Center Patient Health Outcomes Federally Qualified Health Centers Selected Outcomes, by Race/Ethnic Group, California, 2019 Unequal health outcomes exist for ■ Latinx ■ Asian ■ Black ■ White ■ Other patients among racial and ethnic groups served by Federally Qualified Health Centers. One in eight Black 43% infants was born at low or very low 38% 40% 36% 37% birth weight. Among patients with 33% 33% 33% diabetes, a slightly higher proportion 30% of Latinx and Black patients were estimated to have poor control of 21% blood sugar levels. Black patients with 12% hypertension were less likely to have 6% 7% 7% 8% blood pressure under control than other races/ethnicities. Percentage of infants Percentage of patients Percentage of patients born at low or very low with diabetes and poor with hypertension birth weights control of HbA1c without control over blood pressure Notes: Other includes Native Hawaiians, other Pacific Islanders, American Indians / Alaska Natives, and those of more than one race. Source uses Hispanic/Latino and Black / African American. The Asian, Black, White, and Other categories include only non-Hispanic/Latinx. Source: Blue Sky Consulting Group analysis of the Uniform Data System (2019), Health Resources and Services Administration. CALIFORNIA HEALTH CARE FOUNDATION 12 California's Health Care Safety Net Community Clinic Visits and Patient Revenue Community Clinics by Payer, California, 2017 and 2019 Between 2017 and 2019, community Visits 21.9 million • 24.1 million clinics experienced a 10% increase Medi-Cal 63% in visits and a 36% increase in net 64% Medicare 8% patient revenue. The payer mix of 9% ■ 2017 visits and revenue was relatively Uninsured and 10% Indigent Programs 11% ■ 2019 unchanged. Private Insurance 8% 8% Other Public 11% 9% Net Patient Revenue $3.6 million • $4.9 million Medi-Cal 66% 68% Medicare 8% 8% Uninsured and 3% Indigent Programs 3% Private Insurance 6% 5% Other Public 17% 15% Notes: Includes Federally Qualified Health Centers (FQHCs), FQHC Look-Alikes, and other clinic types. Source uses encounters. Excludes county-run clinics, clinics with no patient encounters and dental clinics (those with more than 90% of procedures for dental services). Uninsured and indigent programs include self-pay/sliding scale, free, and county indigent program patients. Other public includes all other payers, except for the PACE program, which reports by patient, not encounter. Segments may not total 100% due to rounding. Source: Pivot Table - Primary Care Clinic Utilization Data (2017 and 2019), California Health and Human Services Agency. CALIFORNIA HEALTH CARE FOUNDATION 13 California's Health Care Safety Net Community Clinic Visits and Patient Revenue Community Clinics by Payer and Clinic Type, California, 2019 Medi-Cal contributed the majority of TOTALS (IN MILLIONS) net patient revenue, and patients with 20.2 0.9 3.0 $3,729 $172 $983 5% 3% ■ Other Public Medi-Cal accounted for the majority 7% 6% 24% 4% 7% 29% ■ Private Insurance of visits, for both Federally Qualified 6% 9% 3% 1% ■ Uninsured and 10% 9% 8% Health Centers (FQHCs) and FQHC 8% Indigent Programs 9% 9% 80% 81% ■ Medicare Look-Alike clinics. Other clinics relied 14% ■ Medi-Cal 13% more on other public programs. 68% 68% 18% 7% 7% 8% 44% 37% FQHCs FQHC Other FQHCs FQHC Other Look-Alikes Look-Alikes Visits Net Patient Revenue Notes: FQHC refers to Federally Qualified Health Centers. Source uses encounters. Excludes county-run clinics, clinics with no patient encounters, and dental clinics (those with more than 90% of procedures for dental services). Uninsured and indigent programs include self-pay/sliding scale, free, and county indigent program patients. Other public includes all other payers, except for the PACE program, which reports by patient, not encounter. Other clinics include community or free clinics that are not FQHCs or Look-Alikes, such as some Planned Parenthood clinics. Segments may not total 100% due to rounding. Source: Pivot Table - Primary Care Clinic Utilization Data (2019), California Health and Human Services Agency. CALIFORNIA HEALTH CARE FOUNDATION 14 California's Health Care Safety Net Community Clinic Total Revenue Community Clinics by Source, California, 2019 Net patient revenue ($4.9 billion) Private Grants and Contracts (2%) made up the majority of total revenue Donations and Contributions (2%) for community clinics. County and Other State Programs (<1%) local programs, state programs, and 6% 3% County and Local Programs donations and contributions combined made up just 6% of the total revenue Federal for these clinics. Funds TOTA L RE V E N U E 11% $6.5 Billion Net Patient Revenue 75% Notes: Includes Federally Qualified Health Centers (FQHCs), FQHC Look-Alikes, and other clinic types. Excludes clinics with no patient encounters, county-run clinics, and dental clinics (those with more than 90% of procedures for dental services). Segments may not total 100% due to rounding. Source: Blue Sky Consulting Group analysis of Pivot Table - Primary Care Clinic Utilization Data (2019), California Health and Human Services Agency. CALIFORNIA HEALTH CARE FOUNDATION 15 California's Health Care Safety Net Community Clinic Total Expenses Community Clinics by Category, California, 2019 Personnel-related expenses were the largest expense category for Information Technology (1%) community clinics, accounting for Continuing Education (<1%) Other 70% of total clinic expenses, up 13% Utilities (1%) slightly from 68% in 2016 (not shown). Rent / Depreciation / 5% Interest 2% Outpatient Care Services TOTA L S P E N D I N G $5.3 Billion Supplies 7% Personnel-Related 70% Notes: Personnel-related include salaries, wages and benefits and professional contract services. Includes Federally Qualified Health Centers (FQHCs), FQHC Look-Alikes, and other clinic types. Excludes clinics with no patient encounters, county-run clinics, and dental clinics (those with >90% of procedures for dental services). Segments may not total 100% due to rounding. Source: Pivot Table - Primary Care Clinic Utilization Data (2019), California Health and Human Services Agency. CALIFORNIA HEALTH CARE FOUNDATION 16 California's Health Care Safety Net Community Health Center Operating Margins Community Clinics by Percentile, California, 2016 to 2019 Operating margins decreased for ■ 75th Percentile community health centers between 13.4% ■ Median 2016 and 2019. The median operating ■ 25th Percentile margin was 2.5% in 2019, down from 11.5% 6.5% in 2016. The declining margins 9.1% resulted from median operating expense growth outpacing median 6.5% 6.6% revenue growth. 5.1% 3.6% 2.5% 1.6% 1.0% -0.2% -1.1% 2016 2017 2018 2019 NUMBER OF COMMUNITY HEALTH CENTERS 163 164 167 146 Notes: Data are based on audited financial statements of Federally Qualified Health Centers (FQHCs) and FQHC Look-Alikes as reported by fiscal year. Operating margins are calculated as operating income divided by revenue. Source: California Federally Qualified Health Centers: Financial and Operational Performance Analysis, 2016–2019 (PDF), Capital Link. CALIFORNIA HEALTH CARE FOUNDATION 17 California's Health Care Safety Net Hospital Locations Hospitals by Ownership Type, California, 2019 California has over 300 general acute hospitals that serve Californians, ■ City/County including those with low incomes. (18 hospitals) ■ District (34 hospitals) ■ Investor (80 hospitals) ■ Nonprofit (177 hospitals) Note: Data are only for institutions classified as general acute and comparable, and thus do not include state and Kaiser hospitals or specialty, long-term care, or psychiatric facilities. Source: Blue Sky Consulting Group analysis of Pivot Table - Hospital Annual Selected File (2019), California Health and Human Services Agency. CALIFORNIA HEALTH CARE FOUNDATION 18 California's Health Care Safety Net Inpatient Hospital Days Hospitals by Hospital Ownership Type and Payer, California, 2019 City/county hospitals are often TOTALS (IN MILLIONS) the safety-net hospital in their ■ City/County 6.0 6.3 0.1 3.2 15.5 (18 hospitals) community. The state's 18 city/ 6% 6% ■ District 15% 5% 79% 4% 10% (34 hospitals) county hospitals provided 10% of all 6% ■ Investor inpatient days, but provided 15% of 8% 13% (80 hospitals) 21% ■ Nonprofit Medi-Cal inpatient days and 79% of 19% (177 hospitals) 20% 77% inpatient days for patients served by county indigent programs. Nonprofit 68% 65% hospitals were the main source of 57% inpatient care for patients overall, accounting for 65% of inpatient days in 2019. 2% 1% 18% Medi-Cal Medicare County Indigent Other Payers All Payers Programs Notes: Total number of inpatient days noted at top of bar. Data are only for institutions classified as general acute and comparable, and thus do not include state and Kaiser hospitals or specialty, long-term care, or psychiatric facilities. Other payers includes private insurance, hospital-provided charity care, self-pay, and all other payers not included elsewhere. Investor hospitals are operated by an investor-individual, investor-partnership, or investor-corporation. Segments may not total 100% due to rounding. Source: Blue Sky Consulting Group analysis of Pivot Table - Hospital Annual Selected File (2019), California Health and Human Services Agency. CALIFORNIA HEALTH CARE FOUNDATION 19 California's Health Care Safety Net Outpatient Hospital Visits Hospitals by Hospital Ownership Type and Payer, California, 2019 Nearly one in four hospital outpatient TOTALS (IN MILLIONS) visits by enrollees in Medi-Cal ■ City/County 15.5 15.1 0.5 16.6 47.7 (18 hospitals) occurred at a city/county hospital. 6% ■ District 7% 13% 8% 95% (34 hospitals) 22% 7% ■ Investor 7% 6% 7% (80 hospitals) ■ Nonprofit 7% 7% (177 hospitals) 79% 79% 9% 73% 61% <1% 5% <1% Medi-Cal Medicare County Indigent Other Payers All Payers Programs Notes: Total number of outpatient visits noted at top of bar. Data are only for institutions classified as general acute and comparable, and thus do not include state and Kaiser hospitals or specialty, long-term care, or psychiatric facilities. Other payers includes private insurance, hospital-provided charity care, self-pay, and all other payers not included elsewhere. Investor hospitals are operated by an investor-individual, investor-partnership, or investor-corporation. Segments may not total 100% due to rounding. Source: Blue Sky Consulting Group analysis of Pivot Table - Hospital Annual Selected File (2019), California Health and Human Services Agency. CALIFORNIA HEALTH CARE FOUNDATION 20 California's Health Care Safety Net Change in Inpatient Days and Outpatient Visits Hospitals by Payer and Ownership Type, California, 2015 to 2019 Between 2015 and 2019, both nonprofit and investor hospitals CITY/COUNTY DISTRICT INVESTOR NONPROFIT ALL HOSPITALS served more Medi-Cal members, Inpatient Days Medi-Cal -3.5% -16.6% 17.8% 6.6% 4.8% with increases in inpatient days and Medicare 38.4% -6.1% 1.2% 7.4% 6.6% outpatient visits. City/county hospitals County Indigent Programs 32.1% -44.9% -60.1% 4.8% 19.8% have seen increases in inpatient and Other Payers -26.8% -15.0% -13.9% -1.3% -5.8% outpatient services for patients served All Payers 0.6% -12.9% 4.6% 4.9% 3.2% by Medicare and county indigent programs. Outpatient Visits Medi-Cal -12.2% -6.2% 8.8% 10.6% 3.2% Medicare 5.4% 10.4% 9.2% 21.3% 18.4% County Indigent Programs 22.6% -95.5% -55.6% -0.3% 18.9% Other Payers 28.8% 9.0% -1.8% 8.6% 9.2% All Payers -1.1% 3.7% 5.5% 13.3% 9.9% Notes: Data are only for institutions classified as general acute and comparable, and thus do not include state and Kaiser hospitals or specialty, long-term care, or psychiatric facilities. Other payers includes private insurance, hospital-provided charity care, self-pay, and all other payers not included elsewhere. Investor hospitals are operated by an investor-individual, investor-partnership, or investor-corporation. Segments may not total 100% due to rounding. Source: Blue Sky Consulting Group analysis of Pivot Table - Hospital Annual Selected File (2015 and 2019), California Health and Human Services Agency. CALIFORNIA HEALTH CARE FOUNDATION 21 California's Health Care Safety Net Net Patient Revenue Hospitals by Payer and Hospital Ownership Type, California, 2019 City/county hospitals were heavily TOTALS (IN BILLIONS) reliant on Medi-Cal as a source of ■ Other Payers net patient revenue, whereas other $9.4 $4.7 $12.6 $82.9 $109.6 ■ County Indigent Programs hospitals received a higher percentage 18% 38% 33% 47% 42% ■ Medicare of net patient revenue from Medicare ■ Medi-Cal 2% and other payers (including privately 16% <1% insured patients). <1% - <1% 65% 35% <1% 34% <1% 28% 28% 32% 27% 25% 29% 0 City/County District Investor Nonprofit All Hospitals Notes: Data are only for institutions classified as general acute and comparable, and thus do not include state and Kaiser hospitals or specialty, long-term care, or psychiatric facilities. Other payers includes private insurance, hospital-provided charity care, self-pay, and all other payers not included elsewhere. Investor hospitals are operated by an investor-individual, investor-partnership, or investor-corporation. Segments may not total 100% due to rounding. Source: Blue Sky Consulting Group analysis of Pivot Table - Hospital Annual Selected File (2019), California Health and Human Services Agency. CALIFORNIA HEALTH CARE FOUNDATION 22 California's Health Care Safety Net Change in Net Patient Revenue Hospitals by Hospital Ownership Type and Payer, California, 2015 to 2019 All types of hospitals experienced an increase in net patient revenue from ■ City/County ■ District ■ Investor ■ Nonprofit ■ All Hospitals Medi-Cal, Medicare, and other payers and a decrease in revenue from county 45% indigent programs between 2015 and 30% 28% 2019. As Medi-Cal enrollment has 24% 23% 24% 22% 21% 20% 8% 17% 18% expanded, county indigent programs 15% 17% 15% -13% have played a smaller role in financing -23% -24% hospital care. -59% -95% Medi-Cal Medicare County Indigent Programs Other Payers Notes: Data are only for institutions classified as general acute and comparable, and thus do not include state and Kaiser hospitals or specialty, long-term care, or psychiatric facilities. Other payers includes all patients not part of another category, such as those designated as self-pay and other third party (including employer-based and privately purchased insurance). Segments may not total 100% due to rounding. Source: Blue Sky Consulting Group analysis of Pivot Table - Hospital Annual Selected File (2015 and 2019), California Health and Human Services Agency. CALIFORNIA HEALTH CARE FOUNDATION 23 California's Health Care Safety Net Total Revenue Sources Hospitals by Hospital Ownership Type, California, 2019 Net patient revenue was the largest TOTALS (IN BILLIONS) revenue source for all hospital types. $12.7 $5.1 $12.8 $88.2 ■ Nonoperating City/county hospitals were much more 3% 1% 3% 5% 1% 3% ■ County Contribution 3% dependent on county contributions 13% 98% 94% ■ Other Operating 92% ■ Net Patient and other operating revenues relative 9% to other hospital types. 75% City/County District Investor Nonprofit Notes: Nonoperating includes revenue not related to the provision of health care services, such as investment income and unrestricted contributions. Other operating includes revenue generated by health care operations from nonpatient care services, such as cafeteria and supplies sold to nonpatients. Net patient includes gross patient revenue plus capitation premium revenue less deductions from revenue such as provisions for bad debts and contractual adjustments. Investor hospitals are operated by an investor-individual, investor- partnership, or investor-corporation. Source: Blue Sky Consulting Group analysis of Pivot Table - Hospital Annual Selected File (2019), California Health and Human Services Agency. CALIFORNIA HEALTH CARE FOUNDATION 24 California's Health Care Safety Net Median Operating Margin Hospitals by Hospital Ownership Type, California, 2017 and 2019 Between 2017 and 2019, median operating margins improved for ■ 2017 ■ 2019 8.3% city/county, district and nonprofit 6.6% hospitals but declined for investor- 5.3% 4.0% owned hospitals. City/county hospital 3.0% 2.1% 1.8% margins, though improved, remained -2.0% negative in 2019. -8.8% -13.4% City/County District Investor Nonprofit All Hospitals Notes: Operating margin equals net income from operations divided by operating revenue (net patient revenue plus other operating revenue). The operating margin does not take into account nonoperating revenue or expenses. Margin calculations include disproportionate share hospital funds. Data are only for institutions classified as general acute and comparable, and thus do not include state and Kaiser hospitals or specialty, long-term care, or psychiatric facilities. Investor hospitals are operated by an investor-individual, investor-partnership, or investor-corporation. Source: Blue Sky Consulting Group analysis of Pivot Tables - Hospital Annual Selected File (2017 and 2019), California Health and Human Services Agency. CALIFORNIA HEALTH CARE FOUNDATION 25 California's Health Care Safety Net Median Net Income Margin Hospitals by Hospital Ownership Type, California, 2017 and 2019 With the exception of city/county hospitals, the median net income ■ 2017 ■ 2019 11.9% margins improved for all hospital types between 2017 and 2019. Investor hospital median net income 8.5% margins increased 3.4 percentage points. 6.9% 6.3% 5.3% 4.1% 4.2% 4.0% 3.8% 1.4% City/County District Investor Nonprofit All Hospitals Notes: Net income margin equals total net income divided by total revenue (total operating revenue plus nonoperating revenue). Margin calculations include disproportionate share hospital funds. Data are only for institutions classified as general acute and comparable, and thus do not include state and Kaiser hospitals or specialty, long-term care, or psychiatric facilities. Investor hospitals are operated by an investor-individual, investor-partnership, or investor-corporation. Source: Blue Sky Consulting Group analysis of Pivot Tables - Hospital Annual Selected File (2017 and 2019), California Health and Human Services Agency. CALIFORNIA HEALTH CARE FOUNDATION 26 California's Health Care Safety Net Glossary County Indigent Programs. Programs serving medically indigent adults as required by Welfare and Institutions Code § 17000: "Every county and every city and county shall relieve and support all incompetent, poor, indigent persons, and those incapacitated by age, disease, or accident, lawfully resident therein, when such persons are not supported and relieved by their relatives and ABOUT THIS SERIES friends, by their own means, or by state hospitals or other state or private institutions." The California Health Care Almanac is an online Episodic Programs clearinghouse for data and analysis examining • The Breast and Cervical Cancer Treatment Program provides cancer treatment to eligible California residents with low the state's health care system. It focuses on issues income diagnosed with breast and/or cervical cancer who are in need of treatment. of quality, affordability, insurance coverage and the uninsured, and the financial health of the • The Child Health and Disability Prevention Program is a preventive program that delivers periodic health assessments system with the goal of supporting thoughtful and services to children and youth in families with low incomes in California. planning and effective decisionmaking. Learn • The Family Planning, Access, Care, and Treatment Program provides comprehensive family planning services more at www.chcf.org/almanac. to eligible (incomes of less than 200% of the federal poverty level) men and women. Explore the full California's Health Care Safety Net • California Children's Services (CCS) is a state program for children up to age 21 with certain diseases or Almanac series at www.chcf.org. health problems. CCS provides diagnostic and treatment services, medical case management, and physical and occupational therapy services. AU T H O R S Disproportionate Share Hospital (DSH). A Medi-Cal supplemental payment program established to reimburse hospitals for Matthew Newman and James Paci some of the uncompensated care costs associated with furnishing inpatient hospital services to Medi-Cal enrollees and uninsured Blue Sky Consulting Group people. The types of hospitals and/or health facilities that are eligible to participate in the DSH program consist of general acute care hospitals, acute psychiatric hospitals, and psychiatric health facilities. Federally Qualified Health Center (FQHC). Community-based health care providers that receive funds from the Health Resources and Services Administration Health Center Program to provide primary care services in underserved areas. They must F O R M O R E I N F O R M AT I O N meet a stringent set of requirements, including providing care on a sliding fee scale based on ability to pay and operating under California Health Care Foundation a governing board that includes patients. The defining legislation for FQHC (under the Consolidated Health Center Program) is 1438 Webster Street, Suite 400 § 1905(l)(2)(B) of the Social Security Act. Oakland, CA 94612 FQHC Look-Alike. Community-based health care providers that meet the requirements of the Health Resources and Services 510.238.1040 Administration Health Center Program but do not receive Health Center Program funding. They provide primary care services in www.chcf.org underserved areas on a sliding fee scale based on ability to pay, and they operate under a governing board that includes patients. CALIFORNIA HEALTH CARE FOUNDATION 27