Up until this month, Madera County — with a population of more than 150,000 spread out across 2,000 square miles of Central Valley farmland and sparse Sierra — had a single general hospital.
Then, on Jan. 3, it closed its doors for good.
As CalMatters health reporter Ana B. Ibarra and California Divide reporter Nicole Foy explain, the shuttering of Madera Community Hospital is a local tragedy, but it’s also a flashing warning sign for a rural healthcare system in California that has been under financial strain for years.
In Madera, adults across the county now have to drive an extra 30 or 40 miles to Clovis, Fresno or Merced for emergency medical care. That’s assuming they can drive.
- Pedro Dominguez, 80, whose wife has severe asthma: “Many people don’t know who to turn to.”
There isn’t just one reason that Madera Community Hospital went bankrupt:
- More than half of the emergency room visits to the hospital came from patients enrolled in the Medi-Cal, the state health insurance program for low-income residents that reimburses providers at lower rates than private insurance companies.
- The hospital had to pay out big to hire travel nurses and retain burned-out staff during the worst of the COVID-19 pandemic.
But these problems aren’t unique to Madera. They’re found at hospitals serving rural communities across California. Roughly half of the state’s hospitals are spending more than they take in, according to Carmela Coyle, president of the California Hospital Association.
- Coyle: “We are at a tipping point; Madera is just the first one.”
If you heard a large thump on Thursday, it might have been the sound of the federal government smacking into its congressionally-imposed borrowing limit. The U.S. Treasury hasn’t run out of cash just yet. With some financial gymnastics, Treasury Secretary Janet Yellen said the biggest spending government on earth can keep chugging along without a hike to the debt ceiling until sometime this summer.
Still, one wonders what a fiscally straightjacketed federal treasury (or worse yet, a first-ever default by the U.S. government) might mean for California, which has its own budgetary concerns.
I put the question to Department of Finance spokesperson H.D. Palmer. His short answer: Nothing good.
There are three main potential impacts to the state’s finances, he said:
- The possibility of the U.S. government not paying its bills would likely rattle the stock market (more than it already has). The state of California draws a disproportionate amount of its individual tax revenue from capital gains on stocks and other investments.
- New reductions in federal spending could be on their way, which might mean less cash for California.
- Uncle Sam running out of cash could slow the entire global economy, tugging down the state’s revenues with it.
But there’s no reason to panic yet. Congress and the White House have months to hammer out of a deal and Palmer said he remains confident.
Palmer: “If there were not to be a timely and satisfactory resolution to this issue the economic impact would not be limited or contained…But we certainly hope and expect that more reasonable heads will prevail.”
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