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California Dreamin’

by Nick Jacobs

The L. A. Times has reported that about 24 private hospitals in L. A. and Orange Counties with nearly 15% of the region’s hospital beds are in tough straits financially and are in danger of bankruptcy or closure. (Latimes.com). All of the rhetoric about these potential closures has been magnified by a proposed 4% tax on the State’s hospitals intended to fund a plan to provide health insurance for all California residents.

According to the Times as re-reported in USA Today the closure of community clinics and hospitals in recent years has resulted in a system for health care that is very over burdened and has resulted in over crowded emergency rooms, decreased access to care in general and even more challenges for the marginated poor and under insured.

So, as the governor attempts to broaden the health care security blanket to all of those in need, this legislation has targeted all hospitals. Putting that model into play in Pennsylvania, our facility would pay about $60,000 a year and one of PA’s largest health systems would be sending the State about $2.624,000. Unless California hospitals are financially more sound than PA hospitals, it doesn’t seem like a phenomenal source of additional revenue.

More importantly, the question of taxing hospitals for any reason comes to mind? It’s one thing to tax smokers for additional health care funding. That may actually encourage them to quit, save their life and society some money, but if you tax hospitals will they not be forced to find those funds from some other source and will that source end up being the patient? Is this tail chasing?

It certainly seems like an exercise in futility as the terminator potentially accelerates the demise of two dozen struggling facilities so that his State can provide better care to all of the citizens of California.


1 Comment »

  Pat wrote @ October 9th, 2007 at 2:01 pm

These types of taxes almost always are past on to the consumer. As long as your competitors are paying the same tax I don’t see how it would harm hospitals, I see more of a burden on consumers of hospital services.

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