Alameda Health System in financial straits

One of the Bay Area's largest public health providers asked for a bailout due to deep financial problems, leading to speculation that its hospitals are ineptly managed, the Contra Costa Times reported.

"The Alameda Health System has proven to be inept at managing their finances," Alameda County Supervisor Richard Valle told the Contra Costa Times. He demanded change in the management of the Oakland, California-based system, which includes four acute care hospitals and a psychiatric facility. "The trust between AHS and Alameda County has been broken."

The dispute is over $198.7 million the healthcare system owes the county, much of which is supposed to be paid off by 2018. Alameda Health's leaders now want another 20 years to pay off the debt. In addition to the loan, the system also receives $75 million a year due to a half-cent sales tax increase. The county's electorate recently voted to extend the sales tax increase for another 15 years.

Much of the system's current cash flow problems--about $55 million in all--are tied to issues with its electronic health records system, which has led to delays in processing claims and collecting payments, according to David Cox, its newly appointed chief financial officer.

Alameda is not the only urban hospital system that is being squeezed in terms of collections. New York City's Health and Hospitals Corp. recently decided to become more aggressive in obtaining payments from insurers, a process that will likely add up to $150 million a year to the bottom line.

Although Valle was blunt in his criticism, another supervisor, Wilma Chan, said the reforms wrought by the Affordable Care Act tended to "favor large providers with a lot of capital (and) those providers who have a very rich patient mix," as opposed to a safety-net healthcare provider, according to the Contra Costa Times.

To learn more:
- read the Contra Costa Times article