July 2, 2007

A comprehensive new report from the California HealthCare Foundation (CHCF) found that the financial health of the state’s hospitals improved during a 5-year period, but one-third of the state’s hospitals continue to lose money.

The analysis of 355 general acute care hospitals in California between 2001 and 2005, produced by consulting firm PricewaterhouseCoopers, builds upon the results of an earlier CHCF report that warned of a looming crisis that would see a large proportion of financially under-performing hospitals facing closure.

The new report sates that the crisis has not materialized, as the number of hospitals closing during that period was similar to the 1995-1999 period. A gap in financial performance between the most profitable and least profitable California hospitals persists however.

Size, type of ownership, system affiliation, and geographic location all factored into profitability, with small hospitals (fewer than 150 beds), district hospitals, city/county hospitals, and rural hospitals all disproportionately represented in the lower quartile.