State dollars ease Santa Clara County public hospital cuts

Public hospitals in California have been thrown a lifeline thanks to the advocacy work of Silicon Valley lawmakers, but more is needed to save the bleeding caused by federal budget cuts.

State Assemblymembers Patrick Ahrens, who represents North San Jose, Sunnyvale and Cupertino, and Ash Kalra, whose district includes East San Jose and South County, advocated with others for state investments into public hospitals after the governor’s initial budget proposed deep cuts to Medi-Cal.

As a result, the final state budget includes a one-time investment of $250 million for the state’s 17 public hospitals and $200 million to support distressed hospitals, in addition to the $300 million Gov. Gavin Newsom initially proposed to lower Covered California insurance premiums.

Ahrens, Kalra and local leaders gathered Monday at O’Connor Hospital in San Jose to celebrate these wins and raise alarm for what is still at stake.

“We still remain on a collision course with millions of Californians losing their healthcare next year,” Ahrens said at the news conference. “Unless the federal government changes course, we are in need of long-term solutions to protect healthcare.”

H.R.1, the federal spending bill passed last summer, created seismic disinvestments in Medicaid, known as Medi-Cal in California — slashing funding by $1 trillion over the next decade. Santa Clara County expects to lose $1 billion a year, requiring leaders to reduce services and shrink programs.

Nearly 130,000 county residents are projected to lose their Medi-Cal coverage due to these cuts by 2028, and nearly 3 million people statewide could  lose coverage, according to the Labor Center at University of California, Berkeley.

Kalra said the federal government’s actions will have devastating consequences for California families, including those who need cancer treatment, prenatal care, mental health treatment and more.

“Lives are certainly on the line,” Kalra said at the news conference. “California has shown that we are willing to lead, but we cannot stop here. We must continue looking for every possible solution to protect access to lifesaving healthcare, strengthen our public healthcare system and ensure that communities are not left to bear the burden of poor decisions made in Washington.”

Public hospitals will play an increasingly bigger role as more people become uninsured.

Santa Clara County’s hospital system is the only option for low-income and uninsured patients. The county runs four hospitals and 15 clinics. Half of the system’s patients pay through Medi-Cal, and one in four of the county’s nearly 2 million residents are Medi-Cal enrollees.

The county’s hospitals handle nearly half of all emergency room visits and 80% of trauma cases, according to Dr. Brian McBeth, a hospital executive at Valley Medical Center. Every 11 minutes, a resident is transported by ambulance to one of the county’s hospitals.

County Executive James Williams said the investments the state has made will help residents access the care they rely on, especially trauma, burn and emergency services.

“We need the state to make ongoing, long-term investments that protect the critical public healthcare infrastructure Californians have invested in for decades,” Williams told San José Spotlight.

In addition, Newsom’s proposal would have introduced cuts to the In-Home Supportive Services program, which provides caregivers for older adults and people with disabilities. The final state budget rejected these cuts that would have shifted more of the cost burden onto counties.

“We were saved from some from the catastrophic cuts this year,” Michele Mashburn, founder of All Things Disability Equity, told San José Spotlight. “This is only the beginning of a battle. Each year this battle gets harder and harder to do because we’re already strapped for funding.”

County leaders took action by proposing a five-eighth cent sales tax increase to provide funding for its hospitals, which voters approved last November. Measure A is expected to bring in $330 million annually to stave off the threat of  hospital closures, but won’t save the county entirely.

“Santa Clara County did not take this devastating news lying down,” District 4 Supervisor Susan Ellenberg said at the news conference. “But Measure A was never a cure; it is a Band-Aid. The actions our leaders will take next year will determine whether this looming healthcare crisis is mitigated or endured for a generation.”

Contact Joyce Chu at [email protected] or @joyce_speaks on X.