Scripps Health President and CEO Chris Van Gorder proclaims hospitals are “running out of ways to cut costs”
LOS ANGELES, CA – As the effects of H.R. 1 begin to hit hospitals across the country, California is taking a particularly hard blow. With hospitals, clinics, and other healthcare infrastructure in the state facing a $100 billion shortfall in the coming years, multiple hospital and clinic closures are underway, with many more predicted. That’s in addition to hospitals warning of drastic staffing reductions if additional funding is not secured.
Sounding the alarm now is Chris Van Gorder, President and CEO of one of California’s top 20 healthcare systems, Scripps Health. In a recent article in Becker’s Hospital Review, Van Gorder issued a dire warning: California’s healthcare system is on the brink of collapse. The cause is evident: deep funding cuts from H.R. 1. And while the San Diego-based CEO makes clear that his systems’ hospitals and others have worked to cut costs, they are running out of ways to do so.
Van Gorder’s piece is a striking reminder that California’s looming healthcare collapse isn’t a partisan or political issue – it’s a matter of “critical infrastructure.” Van Gorder also noted that while the harshest effects of the federal healthcare cuts have yet to materialize, the healthcare collapse is unfolding right now.
Already, California hospitals are laying off thousands of workers and bracing for even deeper cuts, according to reporting by the Orange County Register. More than 400 hospitals statewide have laid off more than 3,400 health care workers as of mid-March in response to the loss of billions of dollars in federal and state healthcare funding.
In San Diego, where Van Gorder is based, and in the Inland Empire, two hospitals have already agreed to a merger that would cause the closure of one of its locations. He also cites a “national hospital operator” selling off one of its hospitals and two other hospitals in the area looking to sell to other organizations as the dire fiscal situation threatens their continued operations. In Van Gorder’s assessment of the situation in Southern California, “[t]he house of cards didn’t just weaken, it collapsed.”
Proponents of the California Billionaire Tax say this is exactly why voters must pass the measure when it appears on ballots this fall — because if billionaires don’t pay to keep local hospitals, clinics, and ERs open, all families will suffer, and working families will bear the brunt. At the same time, as closures like these mount, patients will simply go without key preventative care, leading to higher costs for all, and unnecessary, avoidable, and earlier patient deaths.
The one-time 5% emergency tax would be applied to the aggregate wealth of the state’s roughly 200 billionaires. The commonsense measure is a direct response to the federal cuts that gave those same billionaires and others across the country massive tax cuts while pulling the rug out from under the doctors, nurses, hospitals, and clinics. Fortunately, the coalition recently submitted more than 1.5 million signatures in favor of the proposal, roughly twice the number needed for the measure to appear on the ballot.
“Healthcare leaders are sounding the alarm that California is facing a crisis of billionaires’ own making,” said Debru Carthan, Executive Vice President of SEIU-UHW. “The California Billionaire Tax Act is a reasonable and measured solution to address this crisis. By enacting a statewide tax on the wealth of the state’s roughly 200 billionaires, we can reverse some of the harm caused by federal cuts and prevent further healthcare layoffs and hospital closures.”
While many hospital systems have attempted to shield frontline healthcare staff by focusing on administrative roles for layoffs, the scale of the cuts to federal funding has made it all but impossible to avoid impacts on frontline healthcare workers. Some facilities, including Pomona Valley Hospital Medical Center, have announced plans to lay off hundreds of workers, raising concerns that deeper cuts to services and staffing may be inevitable absent a new source of funding.
Statewide, projections show cuts could result in the loss of up to 145,000 health care jobs, impacting hospitals, clinics, and home care providers alike. Meanwhile, hundreds of thousands of Californians are expected to lose coverage over the coming years, increasing dependence on emergency departments and raising uncompensated costs for hospitals.
Without new revenue from the California Billionaire Tax, federal health care cuts will force hospitals and emergency departments to close. Health care costs will increase and insurance premiums will skyrocket. All Californians will feel the effects of these cuts, but they will hit seniors, children, veterans, and people with disabilities particularly hard.
Measures such as the Massachusetts Fair Share Amendment and Washington State’s capital gains tax have generated billions in new revenue for public services, and the number of high-income residents AND their cumulative wealth in both states have increased since the policies went into effect.
In addition, tax experts have underscored that what makes the billionaire tax unique is how it’s designed to be fair and enforceable — so billionaires can’t avoid responsibility by moving their assets or claiming residency elsewhere after the now-passed January 1, 2026 deadline for residency changes.
The Billionaire Tax ballot measure will give Californians the opportunity to vote “yes” to save their health care, with 90% of funds raised going toward stabilizing the state’s health care system and protecting health care for all Californians, and 10% funding food aid and supporting K-14 public education.
Impact of federal healthcare cuts
- Dozens of hospitals and ERs will close; dozens more will be forced to cut back services and lay off healthcare workers. The patient care crisis will worsen as patients are forced to wait longer and drive further for medical care.
- Up to 3.4 million Californians could lose their healthcare coverage under Medicaid, including many seniors, children, veterans, and people with disabilities
- The state could lose about $30 billion in federal healthcare funding every year — destabilizing the health care system and driving up health care costs for everyone.
- Insurance premiums for Californians who purchase Affordable Care Act plans could rise as much as 97%, and an estimated 400,000 Californians could be priced out of healthcare altogether.
Impact of food assistance cuts
- Currently, 5.5 million Californians benefit from food aid. 3.5 million are senior citizens and children.
- At least 754,000 people could lose their entire monthly benefit, with over 3 million households facing reductions.
- The estimated funding loss is $2.5 to $4.5 billion annually.
The SNAP/Cal-Fresh cuts, if not backfilled by other funding mechanisms, are expected to cost California approximately 400,000 jobs over the next nine years.
About the California Billionaire Tax Act
The California Billionaire Tax Act proposes a one-time emergency tax on the wealth of the state’s ultra-high-net-worth individuals to safeguard Medi-Cal, keep hospitals and emergency rooms open, expand food assistance, and support public education. The initiative is a direct response to federal healthcare cuts under HR1 that threaten healthcare access and economic stability for millions of Californians.
| Paid for by Save California Health Care and Public Education, Sponsored by Service Employees International Union – United Healthcare Workers West. Committee’s Top Funder Service Employees International Union – United Healthcare Workers West |
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