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DPH projects multi‑year shortfall; five‑year city projection shows structural deficit and uncertainty around Medi‑Cal waivers
Summary
At the first commission budget hearing, DPH outlined a $2.3 billion department budget, five‑year city projections showing a potential $643 million structural deficit by year five and further risk from a modeled recession. Staff proposed technical revenue measures, inflationary corrections, and continuing hepatitis C treatment in jail health.
The San Francisco Department of Public Health presented its first public hearing on the FY2019–21 budget, warning of a multi‑year fiscal challenge and laying out technical corrections and program priorities for commissioners’ review.
“The Controller and Mayor's Office issued their 5 year financial projection in December,” Budget Director Jenny Louie said, summarizing citywide projections she said show revenue growth outpaced by faster expenditure growth and a possible structural deficit of approximately $643 million by the end of a five‑year projection. Louie also described a modeled recession scenario that would increase downside risk.
Louie told the commission the department’s approved operating budget is about $2.3 billion, with San Francisco General representing the largest share and personnel and contracted services accounting for most spending. She flagged uncertainty tied to the Medi‑Cal waiver and public‑hospital redesign: “what’s at risk for us is we have the expiration of the public hospital redesign, the PRIME program, as well as proposed reduction in the disproportionate share hospitals … those 2 losses combined represent about $6,060,000,000 dollars for us,” Louie said, and DPH is taking a conservative revenue assumption into year two while discussing alternatives with state and federal partners.
Among the technical initiatives, Louie proposed revenue efforts at San Francisco General (year‑one additional revenue figures presented) and inflationary corrections to hospital materials and pharmacy budgets, citing a $2.1 million correction for SFGH and adjustments for population health. She also described continuing hepatitis C treatment for patients in jail health, estimating the drug regimen at about $450 per day per patient and an annual budget impact around $330,000 to support roughly 24 ongoing patients.
Commissioners asked detailed follow‑up questions about the assumptions driving the projections, including expected revenue gains from implementing the EPIC electronic health record and revenue‑cycle improvements, the rationale for materials and supplies adjustments, and how jail health will ensure continuity of care for patients started on antiviral regimens. Louie and Acting Director Greg Wagner said DPH would develop additional initiatives for the March hearing—after new Director Dr. Grant Colfax has had time to review the budget—and promised follow‑up materials on several technical points.
DPH will return to the commission with a completed balancing plan and proposed initiatives for commission approval prior to submission to the mayor and controller.
