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Contra Costa Health projects $79.5M shortfall and outlines structural risks from Medi‑Cal changes
Summary
Contra Costa Health officials told the board the health system faces an $79.5 million budget gap for FY26–27, with multi‑year projections showing much larger cumulative deficits absent state or federal changes. The department proposed program reviews, service realignment, and requests board support to pursue additional funding and efficiencies.
Grant Colfax, representing Contra Costa Health, and acting CFO Brian Buchanan presented the health department’s FY26–27 budget and financial outlook. They reported a total departmental budget of about $4.01 billion and a projected use of fund balance of roughly $79.5 million driven largely by declines in Medi‑Cal revenue and rising hospital and clinic costs.
Buchanan said the hospital and clinic system anticipates a projected operating deficit of approximately $66.5 million and that the health plan lines of business (Medi‑Cal and Medicare D SNP) are also expected to operate at a deficit for FY26–27. He explained that state policy changes (including those tied to HR1) and lower enrollment will reduce directed supplemental payments and increase uncompensated care, widening the structural gap.
Health officials outlined immediate actions: reviewing specialty and ambulatory services in an updated CCRMC business plan, evaluating staffing and program changes, pursuing external revenue opportunities (including an association request for state support for uncompensated care), and introducing a budget equity tool to guide prioritization. They noted Measure X allocations and internal reallocations that temporarily offset some pressures but warned that multi‑year projections could erase reserve balances without structural fixes.
Officials stressed the human impact: fewer covered residents will increase uncompensated care and strain the entire local healthcare ecosystem. The department asked the board to support advocacy efforts and to consider program prioritization decisions after the May revise and the June ballot.
