Publications / Financial Health of California Hospitals

Financial Health of California Hospitals

This is archived content, for historical reference only.

The health of California’s hospitals was better in 2007 than it was in the 1990s, although there was a wide gap between those that were doing well and those that were not. Over one-third of California general acute hospitals have very strong operating margins and good bond ratings. But the financial health of almost half of the facilities qualifies them for junk bond status at best. This affects their ability to borrow funds to modernize, which can impact the quality of care they provide.

This snapshot focuses on the financial health of California’s 355 general acute care hospitals, including data on how they are owned, how they are used, who pays for hospital care, and their relative financial strength. The snapshot provides an overview of the major findings of the full report, produced by PricewaterhouseCoopers in 2007, which is available under Document Downloads. (This study is an update of Financial Challenges for California Hospitals, a 2001 Shattuck Hammond Partners report that looked at hospital performance for 1995 to 1999, available under Related CHCF Pages below.)

Some key findings of this study are:

  • Over 60% of California hospitals are affiliated with multihospital systems.
  • Most California hospitals are nonprofit entities, representing 67% of all hospital beds in the state.
  • California’s hospital resources are used more efficiently than the US average, with fewer emergency department visits, hospital admissions, and days of hospital care per 1,000 population.
  • Serving large numbers of Medicare and Medi-Cal patients generally has a negative impact on a hospital’s performance because these payments don’t cover the cost of providing care. Private insurance generally pays more than the cost of care to offset the loss.

The snapshot and full report are available as Document Downloads.