Santa Clara County has already started to feel the impacts of President Donald Trump\u2019s budget bill \u2014 to the tune of $223 million this fiscal year as a result of lost federal revenues from Medicaid.<\/p>\n
It\u2019s the first wave of what is expected to be several rocky years financially for a county that operates four public hospitals and 15 clinics in the wake of Republicans\u2019 decision to slash $1 trillion from the federal Medicaid program over the next decade. In Santa Clara County, one in four residents rely on the publicly funded health insurance program for low-income and disabled individuals, which is known as Medi-Cal in California.<\/p>\n
While new work requirements that determine eligibility won\u2019t take effect until December 2026 \u2014 a change that could result in several million state residents losing health care coverage<\/a> \u2014 County Executive James Williams said the county immediately felt the impact of the bill via cuts and freezes to several Medicaid-related revenue streams.<\/p>\n Some of these payments helped bridge the gap between the actual cost of providing health care services and Medicaid reimbursement rates. Williams said that dollars from these types of supplemental payment programs flow to hospital systems like the Santa Clara Valley Healthcare System that disproportionately serve a large percentage of Medi-Cal enrollees.<\/p>\n Because of the immediate lost revenue, cuts are already on the table for the current fiscal year, which ends in June 2026. County officials are currently trying to come up ways to find $200 million in cost savings in the health care system, which will be approved by the Board of Supervisors in February during the mid-year budget review. Williams said it\u2019s the most significant adjustment the county has had to make mid-year in over a decade.<\/p>\n \u201cThe magnitude of what we\u2019re facing is quite large, and we don\u2019t think it\u2019s prudent fiscally to wait,\u201d the county executive told The Mercury News. \u201cWe need to move forward with at least an initial piece of action now given we\u2019re facing hundreds of millions more during the upcoming budget process.\u201d<\/p>\n The impacts of Trump\u2019s bill are expected to get worse as the years go on, Williams said, with the county estimating $506 million in lost Medicaid revenues in the 2026-2027 fiscal year.<\/p>\n It\u2019s unclear where exactly the $200 million in spending reductions to the Santa Clara Valley Healthcare system will occur, but county officials have hinted in recent weeks that they\u2019re looking at redundancies throughout the system.<\/p>\n While Regional Medical Center in East San Jose \u2014 a hospital that recently came into the county fold earlier this year \u2014 reopened labor and delivery services on Oct. 20<\/a> following a five-year absence, the county had to make a trade-off by closing O\u2019Connor Hospital\u2019s maternity ward.<\/p>\n Paul Lorenz, the CEO of Santa Clara Valley Healthcare, said at a recent meeting that it was a decision based on data that \u201csuggested that we can do better at serving our community\u201d by shifting those services to Regional Medical Center. In the last five years, more than half of the births at O\u2019Connor Hospital were by women living in East San Jose, according to county officials.<\/p>\n The restructuring of services will be felt by residents, Lorenz said.<\/p>\n \u201cThere will be longer wait times, and implications that we may feel immediately but many of which we will not encounter or experience until six months or a year from now,\u201d he said.<\/p>\n