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Chris Childers, MD @cchildersmd
, 15 tweets, 3 min read Read on Twitter
This story has been getting a lot of attention, so I did some digging into SF general's financial statements. The situations described in this story are devastating, and nobody should go through them. But there is a bigger story... (1/x)
vox.com/policy-and-pol…
2/x
In this story, several patients with private insurance were left with very large medical bills after visiting SF general. This is because SF general does not negotiate with private insurers for "in-network" prices, so private payers are stuck paying out of network prices.
3/x
If a patient has a high deductible or high out-of-pocket maximum, they may be stuck paying the balance of a hospital's full charges (which are always obscenely high)
4/x
Most California hospitals are required to submit financial data to the state each year. They are available here: siera.oshpd.ca.gov/FinancialDiscl…
5/x The latest data from sf general is FY2016 (7/16-6/17).
I'm going to round all numbers slightly for simplicity
The hospital has 400 beds, and, over the course of the year, discharged 15k patients and had a total of 102k bed days
6/x There are lots of ways to define "payer mix" but one way would be to divide the number of bed days for each payer (eg. medicare) by the total number of bed days
7/x If we do this, SF generals payer mix for the year was approximately...

30% medicare
52% mediCal (Medicaid in California)
16% private
Negligible fraction of "other"
8/x Another way to define payer mix would be to divide the income from one payer with the total income from all payers ... In other words, what fraction of income came from medicare, medical and private payers?
9/x
Overall, the hospital's net revenue (this is the actual amount received, not billed) was $634M
Medicare paid 21%
MediCal paid 62%
Private paid 15%
10/x
Despite income of $634M, the hospital's expenses were $1.0B.
As with most of healthcare, the majority of these expenses go towards staff and benefits (~65%)
So, technically, the hospital's operating margin (or "profit") was -45%
11/x
The previous year (FY2015) was less devatasting... -14%
And in FY2014 the hospital actually ran a "profit" of 2.9%
12/x
Takeaways:
(1) SF general primarily cares for an underrepresented population (60% MediCal)
13/x
(2) They have a very small population of private patients
(3) There is no evidence in their financials that private pay patients actually pay a disproportionate share relative to their bed days
(4) As a result of their unfavorable payer mix --> they have dismal financials
14/x
Final thoughts... Nobody should be left with ridiculous medical bills that they cannot afford and put them at risk of financial ruin; perhaps worse are patients that do not even have access to healthcare...
15/15
Many private hospitals/organizations do not accept government insurance at all. These patients often have nowhere to turn except for places like SF general. Mechanisms are needed to ensure these safety net hospitals remain financially viable.
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