Elgin Nelson, Staff
Hospital leaders warn that MLK Community Hospital, a vital safety-net facility catering to the South Los Angeles area, is facing a financial crisis that could potentially jeopardize its ability to cover expenses as early as next year.
The hospital, equipped with over 130 patient beds, acknowledges challenges in meeting financial obligations, given that most individuals are uninsured or depend on public resources to cover their bills.
“We are having some struggles,” said Dr. Elaine Batchlor, CEO of MLK Community Hospital, told CBS Los Angeles. “We’ve got more patients coming into the emergency department in the hospital than ever before.”
One of the community hospital’s biggest obstacles is that its emergency department has been swamped with four times as many patients as initially expected. Medi-Cal, the California Medicaid program, also does not fully cover the costs of providing emergency services.
The hospital maintains that, within its $375-million budget, less than half of the revenue comes through billing Medi-Cal and other payers, including commercial health insurance plans, for the services provided. Specifically, in 2022, the hospital reported that 96% of its patients had their care covered by Medi-Cal, a federal insurance program designed to support low-income families.
However, Batchlor highlighted that the hospital experienced a budget deficit exceeding $42 million. A significant contributing factor to this is inflation, which has surpassed revenue growth. The intention was to mitigate this gap with additional funding from Medi-Cal, using a state law implemented over a decade ago to guarantee the hospital’s financial sustainability.
Given the challenges, the hospital obtained a $14-million state loan to support them through the upcoming winter. Without a more comprehensive solution Batchlor has indicated that the hospital may be forced to slash services and perhaps even close its doors.