"It's a huge financial mess right now," said Rob Fuller, chief operating officer of Downey Regional Medical Center. "I go around and kick the Coke machines regularly to see if any quarters fall out."
If the state government starts writing IOUs again instead of paying what it owes hospitals, it could plunge many into a cash crisis. Normally, hospitals would turn to credit markets to tide them over until the state paid up.
But the prospect of state IOUs during a credit freeze is truly chilling, Fuller said. "That scares me the most."
In recent years, employers have slowed the rate of increase in their healthcare expenses by shifting costs onto workers through higher deductibles and reduced benefits. As a result, patients are responsible for a bigger portion of their hospital bills. So more patients are unable to pay their portion of their bills. Three out of four hospitals surveyed by the California association said they had experienced a rise in the number of patients who have insurance but are unable to pay their out-of-pocket expenses.
At NorthBay's VacaValley and Fairfield hospitals, the value of such uncollectable bills rose to $6 million in December, up from $1 million in July. "It happened at an alarming rate," Huddleston said.