To: Board of Supervisors
From: Dr. Grant Colfax, Health Services Director
Report Title: Contra Costa Health Fiscal Outlook and Future of Contra Costa Regional Medical Center and Health Centers
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
CONSIDER accepting a report on the Contra Costa Health (CCH) current fiscal outlook, including the updated projected Fiscal Year (FY) 2026-27 budget deficit of $10 million and the cumulative five-year structural deficit of $730 million resulting primarily from federal and state healthcare policy changes.
FISCAL IMPACT:
The FY 2026-27 Board of Supervisors approved CCH budget included an $80 million deficit. Since budget adoption, CCH has identified approximately $70 million in revenue, productivity, and cost-containment initiatives, reducing the projected FY 2026-27 deficit to approximately $10 million. Despite these short-term improvements, CCH projects a cumulative structural deficit of approximately $730 million through FY 2030-31. Contra Costa Regional Medical Center and Health Centers (CCRMC) account for the greatest portion of the projected financial challenge.
The majority of the CCH structural deficit is driven by Federal and State healthcare policy changes that reduce healthcare funding, alter Medi-Cal eligibility and reimbursement, and increase the number of uninsured residents which place significant financial pressure on the County's healthcare delivery system.
BACKGROUND:
The FY 2026-27 Board of Supervisors approved CCH budget included an $80 million deficit. Since adoption of the budget, CCH has identified approximately $70 million in revenue, productivity, and cost-containment initiatives, reducing the projected FY 2026-27 deficit to approximately $10 million.
CCH's updated five-year projection identifies a cumulative structural deficit of approximately $730 million through FY 2030-31. Contra Costa Regional Medical Center and the Health Centers (CCRMC) account for the greatest portion of the projected financial challenge.
Federal and State healthcare policy changes are the primary drivers to the structural fiscal deficit through FY 2030-31. These policy changes are expected to reduce Medi-Cal enrollment, reimbursement, and supplemental funding. State policy changes will shift the Unsatisfactory Immigration Status (UIS) population currently enrolled in managed care Medi-Cal to Fee-for-Service Medi-Cal and likely increase the uninsured population. Based on current Medi-Cal enrollment, CCH estimates approximately 47,500 residents will no longer be eligible for managed Medi-Cal beginning January 1, 2027, with up to 93,000 residents potentially uninsured by 2031.
CCRMC provides emergency, primary, behavioral health, specialty, and other healthcare services. CCH is evaluating four potential future scenarios for CCRMC: (1) maintaining operations at status quo, (2) developing a single-specialty behavioral health model, (3) pursuing multi-specialty growth, and (4) modeling an orderly wind-down of CCRMC as an acute care facility while reinvesting in the Health Centers network. CCH's current recommended direction is multi-specialty growth, with a focus on expanding high-demand services, modernizing operations, strengthening preventative healthcare services, and establishing a long-term strategy for sustainability. CCRMC leadership will update the Board on these potential scenarios as the work progresses.
CONSEQUENCE OF NEGATIVE ACTION:
Without Board acceptance of this report, the Board will not have the opportunity to review CCH's current fiscal outlook, balancing strategies, and long-term planning efforts for CCRMC and Health Centers.