Financing the Future
Currently, inadequate reimbursement from the Medicare and MediCal programs, inflation and increasing uncompensated charity care are contributing to negative operating margins for the majority of our nation’s hospitals. This places tremendous pressure on all hospitals to assure their community residents have access to state-of-the-art capital improvements.
Obviously it will take substantial capital—beyond patient revenues—to provide for the future. All hospitals are facing substantial financial challenges and LVMC is no different.
The Medicare program (the federal government’s coverage plan for the disabled and the population over 65 years) is not covering the costs of care provided. For every dollar billed to Medicare, LVMC receives approximately 50 cents. This is not sufficient to cover LVMC’s costs. For every dollar billed to MediCal (the state’s coverage plan for the poor and some who do not have insurance) LVMC receives 24 cents. Again, this is substantially less than the cost to provide quality healthcare services. To these factors is added over $2 million of uncompensated care and uncollectible accounts per year. LVMC receives only 1% of its revenue in tax dollars.
As LVMC faces the financial challenges of the next decade, philanthropic support as a source of supplement income will be vital for our new hospital.