What a Health Care Crisis Looks Like on the Ground

LOS ANGELES – I wound around the outside of Martin Luther King Jr. Community Hospital (MLK-LA), just off the 105 freeway in the unincorporated South L.A. community of Willowbrook, which is adjacent to Watts. We had just gone past four large white tents framed with sturdy metal beams, placed in a parking lot on the asphalt outside. They are the kind of temporary structures you might see in Africa during an Ebola outbreak. 

MLK-LA, a private, nonprofit hospital, received the tents from an organization called International Medical Corps to treat the influx of patients during the COVID-19 crisis. After the pandemic subsided, the impossibly crowded safety-net hospital realized it still needed the space. Today, two tents are used for intake and initial tests of vital signs, carried out by student volunteers; the other two house behavioral health patients having psychiatric episodes. 

But the tents can’t handle all the patients streaming in.

There’s a law in California that patients must be taken off ambulances in a reasonable amount of time and brought into the hospital’s care area. As we turned the corner, I saw several of them lying on gurneys outside, under an awning near the front entrance. This outdoor unit had a nurse’s station and security personnel, IV drips, and the like. 

“Obviously, taking care of people outside is not ideal,” said Dr. Elaine Batchlor, CEO of MLK-LA. “Some days it’s really hot. Some days it rains, or it gets cold. These are adaptations to having insufficient space to care for such a high volume of patients.”

MLK-LA is the primary emergency department for a large section of South L.A. It is the only hospital providing indigent care in the area; nearly three-quarters of the patients in the ER are on Medicaid, and another 20 percent are either on Medicare or completely uninsured. When it was built in 2015 on the site of the shuttered King/Drew Medical Center, MLK-LA had capacity for 25,000 annual ER visits; these days it gets four to five times that.

To accommodate one of the busiest ERs in the country, MLK-LA has used every available inch for care space. The gift shop is now a procedure room, for suturing or examinations that require a little privacy. There are patients being treated in the small chapel/meditation room, envisioned initially as a refuge for people worried about their loved ones. Hallways are scattered with patients in gurneys, and some on chairs if the gurneys run out. Staff must make judgment calls on who gets the scarce gurneys and who can handle sitting up.

MLK-LA, the last nonprofit safety-net hospital in its area, sits in a medical desert. The hospital ran a study estimating that South L.A. is short 1,500 primary- and specialty-care doctors to handle demand. But in a weird way, one of the causes of the crisis is success. MLK-LA doesn’t make patients sit around. The average wait for emergency care is under a half-hour, and the rate of people leaving without being seen is under 2 percent, a far better record than the typical ER.

“The most effective way to regain the community’s trust and bring people back to the hospital has been to provide them with high-quality care,” Batchlor said.

The hospital achieved this by flipping the typical ER model. The doctors are up front, the waiting room is now a treatment area, and triage, usually the initial step, is in the tent before patients even get to the front door. Each doctor has a zone assigned to them, and one repurposed area has a lab on site, which reduces time spent waiting for blood tests.

This, Batchlor says, reduces the bottlenecks that can clog up while waiting for a doctor to diagnose and begin a plan of action. She said she’s had other hospitals send emissaries to them to see how they’re keeping wait times low. And despite the overcrowding, there is a kind of serenity to it, which comes with people knowing they’re actually being taken care of.

But the hard constraint is the current configuration of space, forcing the hospital into suboptimal methods of caring for people. The money isn’t there to do much else at the moment.

And that’s before the $1 trillion in Medicaid cuts.

CONVERSATIONS LIKE THE ONES AT MLK-LA are happening at safety-net hospitals across the country. Their primary patient population is on Medicaid, and the cuts put into place by the One Big Beautiful Bill Act (OBBBA) that Republicans passed last year will torch planned budgets and send administrators frantically searching for revenue to keep the doors open. 

Read: Trump funding cuts endangering city and rural hospitals alike

This is the silent issue animating much of the anti-Republican backlash in the midterms, and it compounds on itself. Work requirements and other paperwork mandates are pushing people off the Medicaid rolls; enrollment is down by 6 million since Donald Trump’s inauguration; 2.5 million of those are children. The expiration of enhanced Affordable Care Act subsidies has made insurance supremely unaffordable, and enrollment in those exchanges is down by 5 million. 

This spike in the uninsured population leads people to turn to emergency departments as their primary mode of care, and uncompensated care—U.S. hospitals are required to take on all emergency patients—shreds budgets for safety-net hospitals. If they go out of business, the flow of patients moves to the next ER, and the next, recreating the same problems in a new venue. And the worst cuts are yet to come.

MLK-LA is the epitome of this spiral, serving a population dependent on state-run low-income care for whom there are little or no nearby options. “Because people can’t access medical care in the community, they come to the emergency department,” Batchlor said. The conditions of the people they see, who have foregone preventive care, are often worse than they should be, requiring inpatient care. The spiral leads to worsening symptoms, serious illnesses, and even death. And the more the medical desert grows, the bigger those problems get.

Groceries, gasoline, utility bills, and data centers get a lot of the headlines, but the cost of health care remains a top economic concern for voters. A poll from United States of Care found that 76 percent of voters say health care will be a top-three issue in the election, and 73 percent pronounce themselves “frustrated, overwhelmed, or helpless” in the face of their health care options.

Read: Health care reform needs more than universal coverage

Democrats have pressed the issue in battleground races, blaming Republicans for the chaos to come. But until you go to a safety-net hospital like MLK-LA, you cannot internalize what that chaos already looks like, and how the future could be absolutely catastrophic. And the villains are not solely Republican budget-cutters, though they are a huge factor. Hospitals like MLK-LA are beset on all sides by consolidated power, whether in the insurance industry or large hospital systems in the area, that make it harder to deliver quality care to people who desperately need it.

Despite the picture painted of patients jammed into tents or lingering under an awning, MLK-LA is a model of success, of innovation in serving a poor community and improving health outcomes. But big business and Washington have combined to make the path forward nearly impossible.

BACK IN BATCHLOR’S OFFICE, we went over the numbers. The hospital expects $80 to $100 million in losses from the OBBBA next year. That’s about 20 percent of MLK-LA’s overall budget. 

The losses come from a few different factors. The hospital loses hundreds of dollars on every Medicaid patient it sees because of low reimbursement rates. But instead of getting an inadequate amount, they’ll get nothing if that Medicaid patient loses their insurance, which is likely given all the new hurdles to coverage in the law. 

There are also going to be direct cuts to federal Medicaid funding through the closure of what some have called a loophole known as provider taxes. States taxed hospitals and returned the money to them in the form of higher reimbursements; the ability to do that will now be quite limited, cutting these payments to hospitals by about half. 

The state is unlikely to be in the financial position to pick up the slack. In theory, Prop 40, the billionaire wealth tax, would go a long way to solving the problem. But the heavy spending by billionaires to oppose it—helped along by Gov. Gavin Newsom—makes that very uncertain. Nobody trying to stop billionaires from being taxed has proposed anything to save MLK-LA or any other lifeline hospital serving millions of poor people.

So Batchlor has had to figure out a solution. While the hospital has attempted to be more efficient at the margins—thanks to retention and training, there are now only four high-cost temporary nurses at the facility, down from more than 100 during the pandemic—there’s no budgetary solution available. “You can’t cut your way out of an $80 to $100 million a year reduction,” Batchlor said.

She pulled out a whiteboard that had a calculation on it, a plan to close the gap. About half would come from a county ballot measure that barely passed in June, imposing a half-cent sales tax for five years to offset a variety of federal cuts, particularly indigent care. Batchlor expects $47 million per year from that tax. But there’s a catch: in August, the Libertarian Party of L.A. County sued to stop the tax, arguing that exceeding a cap on local sales taxes was unconstitutional. The money is being collected, but will be held in escrow until the courts resolve the case, meaning MLK-LA may not get the money for a couple of years.

Another $5 to $10 million is from an old ballot initiative called Measure B. This was passed in 2002, a $420 million per year property tax to support safety-net hospitals, emergency services, and trauma cases. But over time, the money from that has flowed to 13 private hospitals that happen to have trauma centers, places like the renowned Cedars-Sinai Medical Center, which made $1.1 billion in profit last year.

The way Measure B is structured, ongoing funds go to those hospitals with trauma centers, and those that don’t, like MLK-LA, get whatever is left over after projected revenue is exhausted. MLK-LA has never received a share of ongoing funds, though it has received $29 million in disbursements of leftover funds in the past three years, which saved the hospital.

MLK-LA wants to see changes in the formula for disbursing funds so struggling hospitals are further ahead in line. But despite $5-$10 million being a rounding error in their overall revenue mix, Cedars specifically opposed changing the formula in a July letter to the L.A. County Board of Supervisors. The county has set up a special review of the structure of Measure B allocation, but MLK-LA contends that the consultant writing the study is allied with the big hospital systems.

They see it as part of a pattern. Batchlor brought up federal funding given to hospitals to cover the COVID crisis. MLK-LA, Batchlor said, was reimbursed at $55,000 a bed, despite having an overwhelming number of patients to serve. Data from other hospitals shows a disproportionately higher per-bed rate.

Often MLK-LA can’t dig out of the overcrowding problem because other private hospitals simply won’t accept the transfer of indigent patients. “Larger hospitals don’t want transfers for higher levels of care when patients rely on Medicaid,” she said. “When we call, they often say ‘I’m sorry, we don’t have a bed for your patient.’” She described a situation during COVID when the state coordinated the transfer of five patients to a hospital 15 miles away with open beds, but after a day, the hospital informed MLK-LA that they didn’t have any beds after all.

There is something more insidious lurking behind all the cuts. With safety-net hospitals being battered by cuts, that creates more opportunity for consolidation, where big for-profits buy up the struggling facilities and strip-mine them for profit. A big hospital chain giving up some of its budget to a safety-net provider would be antithetical to that strategy. At some level, the lifelines for indigent care are being immiserated purposefully.

Batchlor says that’s short-sighted. “This is ground zero for the impact of the cuts, but it’s going to impact other neighborhoods, too,” she said. “When hospitals close in neighborhoods like ours, patients go to hospitals in other neighborhoods, costs in those hospitals increase, and private insurance prices go up.”

THE OTHER TWO FUNDING OPTIONS for MLK-LA are similarly uncertain. A state Medicaid supplemental payment program that increases reimbursement for struggling hospitals was invalidated by the Big Beautiful Bill, but Batchlor hopes that an alternative method can be worked out to squeeze out $30 million from that bucket. And then there’s another $20 million that could come from the county increasing its indigent care payments, but the county has resisted that increase.

So each option to backfill the Medicaid cuts has a hurdle, in some cases a major hurdle, attached. “I am by nature an optimistic person,” Batchlor said. “It’s good we are a problem-solving culture.”

There is funding coming in from the health care provider Kaiser Permanente, a $25 million grant announced in August. But that money is specifically earmarked for capital expenditures to get MLK-LA more space for the emergency department. Given the tents and the patients in the gift shop and meditation room, that’s sorely needed. But it doesn’t solve the operating budget problem.

The plan is to expand the emergency department by redesigning a large area, including some adjacent empty space that belongs to the county, and turn it into additional treatment bays. Kaiser would loan MLK-LA another modular building while construction is underway. But even if successful, it would not expand available space by the amount needed to keep up with surging demand. 

The cruel irony is that there is a lot of space around the hospital, but MLK-LA, a private partnership with the county of Los Angeles, is landlocked, with the county in control of the surrounding campus. A county-run urgent care facility attached to the emergency department is woefully underused. A primary care space next door is similarly light on patients. A behavioral care center across the parking lot has increased patients for the ER, because it’s a nearby space for troubled patients needing immediate help. A fourth building that housed an inpatient psychiatric facility is being demolished by the county. That’s an attractive space for expansion, but MLK-LA doesn’t have nearly enough capital to do that.

On our visit, Batchlor showed me a cabinet of awards, including for information technology and patient safety. The hospital recently added a comprehensive outpatient program to provide ongoing management of diabetes—a scourge in this low-income area—that has reduced patient amputations, once the most common surgery at MLK-LA, to zero. The hospital is working to extend the program to kidney and heart disease.

MLK still has a maternity ward, which it fought to keep open despite financial losses because there aren’t local alternatives amid a round of closures. A new unit called EmPATH provides a therapeutic space for mental health treatment, which has freed up some room in the emergency department, where many of these patients would go.

You can look at this and say that the hospital should be upheld as a model facility. Instead, it suffers from its mandate of actually wanting to provide care to poor people who need it. MLK-LA has to fundraise to get the diabetes management system running, a basic community-based care program that saves lots of money and limits health catastrophes over time. But the system isn’t set up for that kind of care; it’s set up to pay bills for hospitals.

The fight is with other hospitals that won’t provide the kind of care that MLK-LA does, but also with insurers, including the allegedly “government-run” insurance services like Medicaid. In reality, most Medicaid programs are run by private companies doing managed care, which is a real burden for safety-net hospitals. “What it means in the modern era is having [your own] artificial intelligence that can counter their artificial intelligence,” Batchlor said, “so that we can get paid for services we have already delivered to their members.” She said that some insurers won’t authorize admissions until a patient is stable, even if they’re already in MLK-LA’s intensive care unit.

Those insurers have been consolidating to try to get leverage over the big hospital systems. The hospitals have consolidated as well, so they can dictate prices to the insurers. Caught in the middle are safety-net hospitals like MLK-LA, and today, the federal government is just battering them even more. Not only do prices go up because of this, but access shrinks for those who need it the most.

“I think we need to be clear about the implications,” Batchlor said. “Some patients will die without the services they need.”