On July 3rd 2025, H.R.1 or the ‘One Big Beautiful Bill’ was signed into law by President Trump. The primary goal of the bill was aimed at the reduction in federal spending through changes to MediCaid and ACA related programs. The result was a $911 billion dollar spending cut to occur over a ten-year period (2025-2034) which would include increasing the number of uninsured people by approximately 10 million over that period.
Analysts estimated that H.R.1 could push approximately 55 additional rural hospitals into financial distress, resulting in about 380 independent rural hospitals nationwide being at serious risk of closure. Based on the most recent information, 13 of California’s 58 rural hospitals are at risk of closing, with more than half of the state’s rural hospitals operating at a loss. More than 44% of California’s rural hospitals have already reduced services.
For EPHC, we began our strategic planning for potential funding changes 6 months before the signing of H.R.1. We looked at operating efficiencies, reductions in costs through more favorable contract terms, and most importantly our ongoing efforts to improve access and quality care to the community. Through our research we realized that while many health systems dedicate 60-70% of their labor to patient-facing activities (functions that directly serve patient care), EPHC utilizes 85% of our work force in this capacity. The result is a lean operation which supports our mission to provide resources where they are needed most – your health care services.
I am pleased to report that after the first anniversary of the H.R.1 legislation, EPHC celebrated the best operating year in our organization’s history. This included 3 million dollars in capital improvements, the addition of new providers and services, and three major construction projects.
The financial spending reductions from HR.1 become even more negatively impactful for rural hospitals in 2027-2030. However for EPHC, our operating forecast through 2030 shows continued growth in operating performance and positive net income to include an additional 12 million in capital investment projects. This ensures our financial stability for years to come along with expansion of services and upgrades to our buildings and equipment.
The commitment by our community to utilize EPHC services is one of the key reasons that this success has been possible. This coupled with the commitment of our leadership team, providers, clinicians, and ancillary staff will continue our ability to provide quality services in the future!
