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California’s 430 community hospitals and health systems provide care to every patient who needs it whether or not they have insurance. While hospitals focus on caring for their patients, they face significant financial challenges caused by the inadequate payments from two government-sponsored programs: Medicare and Medi-Cal. Medicare and Medi-Cal combined provide coverage to 11 million people in California, including seniors, the disabled, children and the underinsured.

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In 2007 there were 400 general acute care hospitals in California. The number declined 4 percent between 2001 and 2007. The number of licensed beds also declined by 4 percent from 2001 to 2007. During the same time, the state’s population increased by 9 percent.

Health care accounts for a remarkably large slice of the U.S. economic pie. Each year health-related spending grows, often outpacing spending on other goods and services, meaning that the size of that slice increases. These cost increases have a significant effect on households, businesses, and government programs.

Just a few days after announcing it will fund $250 million to bolster the nation's workforce of primary care providers, the Obama administration on Friday announced another $250 million will augment efforts to expand prevention and public health infrastructure. "With these investments, we are tackling the underlying causes of chronic diseases as well as strengthening our ability to meet the public health challenges of the 21st century," said U.S. Surgeon General Regina M. Benjamin.

A government analysis of the new healthcare law by chief Medicare actuary Richard Foster says it will not slow the overall growth of health spending because the expansion of insurance and services to 34 million people will offset cost reductions in Medicare and other programs. The Medicare cuts “could become unsustainable,” according to Foster, because they may drive some hospitals and nursing homes into the red, “possibly jeopardizing access to care for beneficiaries.”

Two separate studies reveal that consumers' confidence in their ability to access and pay for healthcare is dropping. In one study from Thomson Reuters, consumer confidence appeared to slide from the beginning of the year, while uninsured medical expenses appeared to be a pressing financial concern, according to a survey conducted for the American Institute of Certified Public Accountants (AICPA).