Press Release June 10, 1999	Contact: Lisa Hubbard, SEIU, 213/368-7404 Julio Mateo, Consumers Union, 415/431-6747 Consumers Union's West Coast Regional Office

San Francisco & Los Angeles, CA - Charity care is eroding in California and the state must take action to ensure care of its most vulnerable population, groups will testify at a legislative hearing on Saturday. Consumers Union and the Service Employees International Union each recently released reports on hospital charity care issues, and will present their findings at the hearing in Los Angeles.

The state Assembly Health Committee will hold the hearing, "Guarding the Charitable Trust," to review charity care obligations at nonprofit hospitals. Consumers Union's recent report analyzed the impact on charity care when 10 California hospitals switched from nonprofit to for-profit companies. The report found that as nonprofit hospitals turn into for-profit companies or merge with larger nonprofit chains, charity care services are placed at risk. SEIU's report documented a dramatic drop in spending on charity care by the state's largest hospital chain, Catholic Healthcare West, which is a nonprofit.

While the scope of the two groups' reports differs, both reports found that legislative and regulatory action is needed to ensure that charity care does not further decline in California's hospitals. The groups will jointly call for the following state actions at Saturday's hearing:

1) The Legislature should pass AB 254 (Cedillo), which would require at least the same regulatory oversight of nonprofit/nonprofit mergers as nonprofit/for-profit conversions now receive. Nonprofit/nonprofit mergers are currently exempted from regulatory oversight, although such mergers are on the rise and their potential impact on charity care can be as significant as when nonprofit hospitals convert to for-profit status;

2) The Legislature and Governor must strengthen current community benefits law (the former SB 697) so that all hospitals properly assess their community needs and report the community benefits they provide, including charity care. Currently, reports filed with the Office of Statewide Health Planning and Development ("OSHPD") vary greatly in content and form;

3) Legislation is needed that establishes clear charity care requirements in exchange for tax-exempt status. Tax exempt bonds and Disproportionate Share Hospital (DSH) funding should also be linked to charity care requirements and targeted to "open door" providers - public hospitals and nonprofits who provide significant charity care;

4) In the case of for-profit hospitals, in order to mitigate any decline in charity care, the new for-profit owner must be required in every case to provide at least the same level of charity care that the nonprofit has historically provided, adjusted for inflation, and in perpetuity;

5) All hospitals, both nonprofit and for-profit, must be required to submit community benefit information and relevant financial data to OSHPD in a timely fashion. Enforcement, penalties, and oversight must also be enhanced so that the public and policy makers can properly scrutinize hospital consolidations and preserve the charity care health safety net.

"By all accounts, a charity care crisis has hit the state," said Julio Mateo, Consumers Union staff attorney and author of CU's report. "If the indigent are turned away from nonprofit and for-profit hospitals, where will they go? Public hospitals are strapped. There must be a concerted effort by all hospitals to maintain our health safety net."

"Californians should be able to expect non-profit hospitals like Catholic Healthcare West-which receive public subsidies worth hundreds of millions of dollars-to provide more, not less charity care at this time of great public need," said Eliseo Medina, executive vice president of the Service Employees International Union. SEIU represents thousands of low-wage workers without health insurance who depend upon a strong safety net.

In addition to the two reports and the legislative hearing, hospital charity care has been the focus of debate within the Los Angeles County Board of Supervisors. The Board is considering various proposals to deal with an increasing demand for care at the county's public hospitals.

[Editors: The hearing will be held Saturday, June 12 from 10 AM until 2 PM at Union Avenue Elementary School, 150 S. Burlington (between 3rd and Beverly, east of Alvarado), Los Angeles.]