Tag Archives: Proposition 52

Dignity Health’s net income more than doubles

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https://www.beckershospitalreview.com/finance/dignity-health-s-net-income-more-than-doubles.html

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Dignity Health, a 40-hospital system based in San Francisco, saw its financial position improve in fiscal year 2018 as it booked higher revenue and benefited from a one-time payment related to a transaction that closed earlier this year.

Dignity recorded revenues of $14.2 billion for the year, which ended June 30, compared with revenues of $12.9 billion for fiscal 2017, according to recently released financial documents. 

In fiscal 2017, Dignity and other California healthcare providers struggled with loss of funds from the state’s provider-fee program, which is designed to help hospitals and health systems treat a large number of indigent patients. The program levies a tax on hospitals, and the state then pools funds to receive federal matches for Medicaid dollars. The Medicaid dollars are distributed back to hospitals based on the number of indigent patients they treat.

In November 2016, California’s participation in the provider-fee program was made permanent with the passage of Proposition 52. However, CMS did not approve the first iteration of the program, which covers the period from Jan. 1, 2017, to June 30, 2019, until December 2017. Accordingly, Dignity’s financial statements for fiscal year 2018 include $447 million in provider-fee payments for the most recent fiscal year plus an additional $217 million of catch-up related to fiscal 2017.

Although the provider-fee payments helped improve Dignity’s financial picture, the system said its unpaid Medi-Cal costs totaled $556 million even after the inclusion of the provider-fee and supplemental payments.

After factoring in expenses, which climbed 6 percent year over year, Dignity ended fiscal 2018 with operating income $529.3 million. That’s compared to fiscal 2017, when the system recorded an operating loss of $66.8 million. The system’s net income more than doubled year over year to $932.5 million.  

During fiscal 2018, Dignity’s financial position was boosted by a one-time gain of $120 million related to a deal with Mechanicsburg, Pa.-based Select Medical to combine occupational medicine and urgent care businesses. Under the transaction, which closed in February, Select Medical’s Concentra Group Holdings and Dignity’s U.S. HealthWorks combined.

Daniel Morissette, Dignity Health’s senior executive vice president and CFO, said several of the system’s balance sheet-related financial metrics also improved in fiscal 2018.

“Our balance sheet continued to strengthen, and cash flows were solid, as we remain focused on further enhancing the long term financial viability of our enterprise and honoring our commitments to the many communities and constituents we serve,” he said in a press release.

 

Election 2016 FAQ: Proposition 52, Private Hospital Fees For Medi-Cal

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http://www.capradio.org/articles/2016/10/03/election-2016-faq-proposition-52,-private-hospital-fees-for-medi-cal/?utm_campaign=CHL%3A+Daily+Edition&utm_source=hs_email&utm_medium=email&utm_content=35302967&_hsenc=p2ANqtz-8_y7tr7hjKlocU1Bf0RP6qo8AOsaLKyNwYTxsS4ZJy4709jXXIbWZfW2Fcz8YjL39HJrT6rBSjniGZ4BrgqygFdZHHFA&_hsmi=35302967

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The Basics

In California, private hospitals pay an annual fee to the state that in turn helps bring in additional federal funds for Medi-Cal, the state’s health care program for low-income Californians. One in three Californians get their health care through Medi-Cal. The funds generated by the fee cover hospital services for Medi-Cal patients and health care for low-income children.

Hospitals originally approached the Legislature to create the “Hospital Quality Assurance Fee,” which state lawmakers enacted in 2009. This law is slated to expire in 2018. Proposition 52 would make the fee permanent and would make it tougher for the Legislature to use the money for other purposes.

The federal government matches state spending on health care for the poor, so the more California puts up for Medi-Cal, the more federal dollars it receives. The hospital fee boosts the state’s fund for Medi-Cal and thus attracts more federal money. Those dollars are then paid back to the hospitals to reimburse them for caring for their Medi-Cal patients.

What you’re voting on

Hospitals say the fee system is crucial to California’s medical safety net. They say they spend more to treat Medi-Cal patients than government reimbursement covers. The supplemental federal money hospitals get helps shrink their deficits. The estimated net benefit to hospitals in 2015-2016 was $3.5 billion.

Hospitals also contribute around $1 billion annually for children’s health care. This extra money acts like a handling fee that hospitals pay the state so the Legislature partners with them on Medi-Cal matching funds. Hospitals want to cement this law rather than have it re-upped every few years to avoid uncertainty and to make sure the amount of the extra fee for children’s health care doesn’t continue to increase, as it has in years past.

Proposition 52 requires a two-thirds vote in the state Legislature to end the program or to divert money from the hospital fee away from Medi-Cal. That’s something that lawmakers did in 2011, when they used approximately half a billion dollars for other purposes.