Hospital system’s “community benefits:” $174 million

Community Medical Centers provided nearly $174 million in uncompensated services to the medically underserved in fiscal year 2009/2010, equivalent to nearly 15 percent of its total expenses, according to the nonprofit hospital system’s annual community benefits report filed with the State of California.

Community has historically spent more on uncompensated community benefits than all other Fresno-area hospitals combined. And, some years, nearly double their combined total.

By comparison, Community’s uncompensated community benefits for fiscal year 2008/2009 were nearly $149 million. The “community benefits” figure reflects services for which the hospital system is not paid or is under-paid. It does not include bad debt.

The community benefits total for last fiscal year includes charity care, unpaid costs for Medi-Cal services, uncompensated costs of the University of California, San Francisco-affiliated medical education program, and unpaid costs under Community’s contract with Fresno County for the medically indigent services program (MISP).

In February 2010, Fresno County expanded the MISP eligibility range. The earnings limit that had been $509 was raised to $1,209. However, in August, a court ruled that new range still excluded too many patients. Irrespective of how the county responds to that ruling, Community is already experiencing a significant increase in the numbers of MISP patients coming for treatment without any additional recompense from the county.

During its fiscal year, Community treated about 15,000 MISP patients, including jail patients, juvenile hall patients and Children’s Health and Disability Prevention Treatment Program patients. That was a 23% increase from the nearly 12,200 treated in FY 2009.

The cost of providing that care was $54 million in FY 2009 vs. $71 million in FY 2010, an increase of 32%. Community sustained an estimated loss of $51 million in FY 2010 – the gap between the county’s $19.7 million payment to Community for the MISP program and the actual cost to Community of providing the care.

Another example of our community benefits: Community’s Home Health Care program, which includes wound care, rehabilitation therapy and other services such as home dialysis and ambulatory care dialysis. There were nearly 4,000 patient encounters last fiscal year under the “community benefits” rubric – at an unreimbursed cost to Community of more than $2.1 million.

Community operates three acute-care hospitals, including the only combined burn and Level 1 trauma centers between Los Angeles and Sacramento, and numerous other health facilities.  It is the region’s largest private employer with 6,000 staff, along with 1,100 affiliated physicians and 900 volunteers. Community also serves as the region’s safety net, through its 1996 contract with Fresno County.

“We continue to treat more patients who either lack insurance, have high-deductible policies or who are otherwise unable to pay the full cost of their care,” said Tim A. Joslin, Community’s chief executive officer. “It costs about $2.8 million a day to run all of Community’s operations. So that $174 million is the rough equivalent of running all our services for more than two months without being paid. We are proud of our mission and of the care we provide. However, the ongoing economic turbulence and the uncertainties brought on by federal health care reform pose true challenges to safety-net hospitals like ours.”

As a condition for tax-exempt status, nonprofit hospitals such as Community are required by state law to report the uncompensated benefits they provide each year. A copy of the community benefits report can be found here.

John G. Taylor reported this story. He can be reached at MedWatchToday@CommunityMedical.org