San Fran’s public health subsidies ‘unsustainable,’ could top $4.3 billion by 2019

In the next five years, the San Fan government health care program will need $4.3 billion in subsidies, just to keep the doors open. This is an expensive, mandated program that is totally unsustainable, will cause police and firefighters to be fired and other government services cut back. Socialism is a failure—watch over the next five years as San Fran collapses from its high taxes and Third World quality government services.

Thank you for reading this post, don't forget to subscribe!

The poor and middle class will start revolting. Google and other high tech, wealthy firms will continue to receive subsidies and tax breaks as the rest of society will be forced out of town. Visit San Fran now, before the collapse.

“From a current subsidy level of $554 million per year from San Francisco’s general fund, the gap will likely climb to $831 million annually by 2018-2019, absent big changes, according to a March 5 report on the San Francisco Department of Public Health by the city’s Office of the Controller and City Services Auditor.(total in five years is $4.3 billion taken from other areas of the budget)”

San Francisco’s public health subsidies ‘unsustainable,’ could top $4.3 billion by 2019

Mayor Ed Lee and the San Francisco Department of Public Health have a huge amount of work to do to keep the city’s public health system from becoming a huge drain on the general fund.

Chris Rauber, San Francisco Business Times, 5/12/14 ShakingHandsWithMoney

City of San Francisco subsidies to its public health system could surge to an unsustainable $4.3 billion over the next five years without major structural reforms and an influx of patients with health coverage, according to an early March city report that so far has netted no public scrutiny.

The department’s revenue will slump 16 percent over that period, as federal and state safety net dollars vanish, the city report warns. New revenue opportunities could replace that funding, it says, but the city isn’t prepared yet to sign new contracts, improve efficiency, ensure timely access to care and take other steps to attract patients who now have options to go elsewhere if they’re not impressed by the city’s system.

From a current subsidy level of $554 million per year from San Francisco’s general fund, the gap will likely climb to $831 million annually by 2018-2019, absent big changes, according to a March 5 report on the San Francisco Department of Public Health by the city’s Office of the Controller and City Services Auditor.

Consulting firm Health Management Associates helped on the project, which included input from DPH officials including Greg Wagner, Colleen Chawla and Tangerine Brigham, among others.

The report, entitled “A Summary of Health Reform Readiness,” lists major cuts in federal funding to city programs, a lack of contracts by the city with Covered California health plans to date, and the need to change from a role as “provider of last resort” to a provider “of choice” as being key challenges for the city in the new health reform era.

Wagner, the Department of Public Health’s CFO, said the report summarized studies undertaken over the last year and a half, and was largely internally focused. “We’re taking it seriously,” he said. “That growth (in annual city subsidies to the public health department) to $831 million cannot happen. That is not a world we can live in.”

Wagner argues that the city is making progress on multiple fronts, especially in terms of changing the Department of Public Health’s culture to make it more amenable to making the necessary course alterations to keep the system afloat.

Except for insiders, however, no one seems to know the report even exists. And critics aren’t so sanguine about the city’s progress to date.

“Everybody knew three years ago” that large numbers of uninsured San Franciscans would move into the expanded Medi-Cal program and new Covered California health plans, said SEIU Local 1021’s Nato Green. But he said the city is still “dickering around” with plans to accommodate the changes.

Green, a consultant and lead contract negotiator for the union, which represents 1,300 fully benefited nurses who work for the city and an additional 500 or so part-time or temporary nurses, blamed the lack of progress on “a lack of political will from Mayor Ed Lee‘s office.”

Roughly 15,000 new Medi-Cal enrollees are projected in San Francisco this year, the report says, and the nurses union sees no evidence the city is ready to deal with the influx — or to sign managed care contracts with one or more of the Covered California plans.

Talks between the city and the Chinese Community Health Plan reportedly fell apart last month, so no negotiations are now under way.

Other major cities, including New York, Los Angeles and San Jose have reached the kind of agreements San Francisco has failed to ink, Green said.

But Wagner disputes the idea that the city has been dithering. Although he didn’t respond directly to questions about the Chinese health plan negotiations, Wagner said the city “looked at a number of potential scenarios” for the initial round of Covered California enrollment that didn’t pan out, but “is looking into that as a possibility for the future.”

It wasn’t “a blown opportunity,” he said. “We did a lot of careful analysis and ultimately decided it didn’t pencil out for us” on the available timeline.

But the city is well aware of the need to retain as regular customers people who were previously uninsured but now are covered by Medi-Cal or private insurance, Wagner said.

Union dissatisfaction with progress

Local 1021’s members, including RNs and nurse practitioners who work at San Francisco General Hospital, Laguna Honda Hospital & Rehabilitation Center, the city’s jail and network of community clinics, often work in understaffed situations, Green said, and aren’t getting the leadership needed to reform and upgrade the public health system. Things have deteriorated from “doing more with less to doing less with less.”

The lack of managed care contracts and other structural reforms could be a huge issue for the city’s public health network, according to the controller’s office. Assuming current levels of services without increases in enrollment and capitated (HMO-style) revenue, “the financial outlook is not sustainable,” the report states.

Before Obamacare took effect, the city had 84,000 uninsured residents, according to the report. About 56,000 of them now have access to coverage, but many are choosing private coverage over public options. Medi-Cal managed care options include Anthem Blue Cross and the San Francisco Health Plan, according to the city. Covered California options include Anthem, Blue Shield of California, Chinese Community Health Plan, Health Net and Kaiser Permanente.

New Covered California health plans and an expanded Medi-Cal program offer opportunities to San Francisco, but only if it reconfigures services, staffing, and outlook to take advantage of them, the report suggests. To turn things around, the report suggests, the city needs more managed care, more insured patients and much greater efficiency.

For example, the report said, staffers in the city’s network now are responsible for patient panels or populations of 826 per full-time-equivalent employee, as of last October, but the new goal is 1,350. Each doctors now sees 1.5 patients per hour, HMA found, far less than industry standards. The new goal is 50 percent higher, at 2.25 patient visits per hour.

Innovations such as a centralized call center are also called for. The city is also looking into integrating some functions of its San Francisco General Hospital, the city’s primary safety net hospital and trauma center, and its Laguna Honda Hospital long-term-care facility.

Meanwhile, the city continues to study the “intersection” of the federal Accountable Care Act and the city’s Healthy San Francisco program, so far without resolution, the report indicates. The Business Times has covered the city’s perusal of the situation, which so far hasn’t been clarified.

Among other recommendations, the report says the city needs a Managed Care Office to focus on performance improvements, greater efficiency and “new contracts with health plans in the state insurance exchange.”

The city’s public health network will lose revenue any time a current patient moves out of its system and transfers to private coverage, the report notes, leaving it with less money to support its current infrastructure.

Projections call for San Francisco’s public health system to serve 85,500 five years from now. What’s counts, financially speaking, however, is how many of those are covered by insurance that helps supports the system.

For example, as many as 2,000 current “clients” are expected to enroll in Covered California plans by January 2015, but so far San Francisco hasn’t figured out a way to capture any of the revenue their coverage will generate.

But altering the infrastructure and attitude at the Department of Public Health is a huge undertaking, said political consultant Jim Ross. “It’s very difficult to change. A lot of moving parts and very far reaching.”

“Any politician in the city (would approach this) very gingerly,” Ross told the Business Times.

Wagner agreed that it’s impossible to change a huge department like his overnight, by flipping a switch, but insists that the doomsday elements of the report were meant as a “bleak call to action” rather than as prediction of impending disaster.

The outlook should be more clear by June or July when metrics on the “initial enrollment activity shake out” for Medi-Cal, Covered California and other programs, Wagner indicated. At that point, he said, the city may need to ask “Do we have the right strategy?” and if necessary try different approaches.


About Stephen Frank

Stephen Frank is the publisher and editor of California Political News and Views. He speaks all over California and appears as a guest on several radio shows each week. He has also served as a guest host on radio talk shows. He is a fulltime political consultant.


  1. Not to worry. San Fran Nan Pelosi will figure it out, and let us all know in one of her ‘vision of light’ statements.

Speak Your Mind


WP2Social Auto Publish Powered By :