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White Memorial’s President and CEO, John Raffoul featured in article — “Will the 'Save Rural Hospitals Act' save rural hospitals?”


In the early 1990s, White Memorial Medical Center, a 353-bed, not-for-profit teaching hospital in East Los Angeles, was struggling and the leadership was contemplating putting the facility up for sale. What ended up breathing life back into White Memorial was the Disproportionate Share Hospital (DSH) program, which covers the cost of providing care to uninsured patients. 

The hospital, in an area where close to half the residents live below the poverty line and which provides $26 million worth of free or uncompensated care per year, is again in uncertain times, with the expected reduction of Medicare DSH payments by $22.1 billion through 2019, according to the American Hospital Association. “That really harms the inner-city hospitals because we live and die by that money,” says John Raffoul, White Memorial’s president and chief executive officer. 

For both urban and rural facilities, it’s death by a thousand cuts — there are also 2 percent Medicare sequestration cuts, created in 2013 after the country went over the “fiscal cliff,” and readmission penalties, in which hospitals with the highest readmission rates lose 3 percent of each payment, and which impact areas with a larger number of impoverished residents more acutely. A number of studies, including one published recently in the journal JAMA Internal Medicine, have shown that socioeconomic factors have more of an impact on readmissions than hospital performance. 

“Patient characteristics not included in Medicare’s current risk-adjustment methods explained much of the difference in readmission risk between patients admitted to hospitals with higher (versus) lower readmission rates,” wrote the authors of the JAMA study. “Hospitals with high readmission rates may be penalized to a large extent based on the patients they serve.” 

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