John Muir Health braces for ‘sizable cut’ from new budget law – Becker’s Hospital Review | Healthcare News

Like many healthcare leaders, Ted Wang, CFO of Walnut Creek, Calif.-based John Muir Health, is keeping a close eye on the effects of the One Big Beautiful Bill Act after it passed July 4. 

“We all are anticipating a sizable cut and impact to our financials, including the MediCal reimbursement,” Mr. Wang said during a Becker’s CFO Revenue Cycle Podcast episode. “Whether it’s the eligibility shift away from MediCal to uninsured, whether or not it’s the premium subsidy that’s going away or … [if] it’s the provider tax that’s being capped or being cut, that would have a severe impact on hospitals across the nation.”

Mr. Wang also touched on the legislation lowering the cap on provider tax from 6% to 3.5% of net patient revenue and the cut in the federal matching rate from 90% to 50%. While John Muir is not near that cap, Mr. Wang said it’s “fingers crossed” that the effect is minimal. 

John Muir is also bracing for broader reimbursement losses. However, Mr. Wang said communication and close attention to how stakeholders react to cutbacks is key.

“The reality is this is all downside,” he said. “The MediCal population we serve today, health systemwide … we’re at a loss of $180 million a year. That in itself is a challenge, but at the same time, we also acknowledge that the cost of healthcare is unaffordable and we need to figure out a solution together.”

Despite ongoing uncertainty across the healthcare industry, Mr. Wang praised John Muir’s strong collaborative environment and culture. The health system is also focused on growth through its new outpatient center in San Ramon, Calif., and the UCSF-John Muir Health Jean and Ken Hoffman Cancer Center, a $300 million facility in Walnut Creek.

“We constantly focus on problem solving,” he said. “We call this the John Muir management system, where we focus on continual improvement in terms of rolling our mission [and] thinking about how to improve the health of communities we serve with quality and compassion.”