Hospitals and healthcare providers across San Diego County are preparing for significant financial strain as proposed federal and state Medi-Cal cuts threaten to reduce already-thin reimbursement levels for care provided to low-income patients. Leaders warn that the funding reductions could limit access to care and place the most significant burden on hospitals that rely heavily on Medi-Cal revenue to stay afloat.

Quarterly financial and utilization reports filed with the state indicate that several local hospitals are particularly vulnerable. Sharp Grossmont Hospital in La Mesa reported that 39% of its admissions between July 1, 2024, and June 30, 2025, the most recent period for which data is available, were covered by Medi-Cal. State figures show Medi-Cal patients accounted for more than 40% of admissions at Paradise Valley Hospital in National City and 36% at Scripps Mercy Hospital in Hillcrest.

Providers say those high utilization rates magnify the impact of any reimbursement reductions, especially for safety-net hospitals already operating at a loss. Executives caution that sustained funding cuts could force hospitals to reconsider service lines, staffing levels, or the number of patients they can serve.

Chris Van Gorder, Scripps Health’s chief executive officer, said the projections are especially troubling given that the system already subsidizes hospitals with high Medi-Cal usage.

“As it is now, we lose about $40 million a year running Chula Vista,” Van Gorder said. “It starts creating real problems for us in the long run, even to be able to sustain what we have programmatically.”

Healthcare leaders emphasize that reductions in Medi-Cal funding do not reduce demand for care. Instead, they argue, the cuts risk destabilizing hospitals that serve as critical access points for vulnerable communities, raising concerns about long-term access, capacity, and financial sustainability across the region.