High Cost Hospitals in California’s Central Coast

Problem: California’s Central Coast is Home to Some of the Hospitals with the Highest Prices in the Country

Central Coast Overview

These steep costs force many working families to drive out of the area to seek lower priced hospital services, depress local wages, and cause severe financial impacts to families and communities. Three of the state’s seven “high cost hospitals” identified by the Office of Health Care Affordability are in the Monterey and Santa Cruz counties, California’s Central Coast. These hospitals are Community Hospital of Monterey, Salinas Valley Health and Dominican Hospital in Santa Cruz. These hospitals’ prices far outpace their peers, charging three to four times what Medicare charges for the same service.

 

Comparing Days Cash on Hand by Hospital

Monterey County

Key Points on Hospitals in Monterey

• Monterey hospitals’ commercial prices significantly exceed both regional and state benchmarks, with these high prices resulting in strong profits.ⁱⁱ Salinas & Monterey are 84% above national median prices. Individual premiums for Monterey residents are $884 compared to the statewide average of $655 for people with Covered CA coverage.
• Covered CA reported consistently higher prices in the region despite the hospitals serving a healthier population.
• Prices to deliver a baby in Monterey are nearly twice the statewide average: $26,128 vs $13,795 for CalPERS members.ⁱⁱⁱ Delivering a baby was 43% more expensive in Monterey county than the rest of the Bay area with higher wages considered.^iv
• These high prices are not associated with larger amounts of financial assistance provided
  to patients.^v
• While some hospital administrator wages are notably high, overall operating and labor costs do not explain the extreme price levels.
• Monterey County hospitals do not receive better quality care than other Bay Area hospitals charging lower prices.^vi
• Community Hospital of the Monterey Peninsula and Salinas Valley Health—the largest hospitals in the county—were two of seven high-cost hospitals identified by OHCA across the state. The county has other hospitals—George L. Mee Memorial Hospital (73 beds) and Natividad Medical Center (172 beds).^vii

Monterey’s High Cost Hospital Profiles

Community Hospital of the Monterey Peninsula (Part of Montage Health):

• is a nonprofit hospital in Monterey, CA (often referred to as CHOMP)
• has 286 beds, general and acute care provided
• charges 466% of Medicare rates as their commercial hospital price for the same service (the average commercial price of hospital services in the Bay Area is 320% of Medicare and across the state is 287% of Medicare)^viii
• charges 572% of Medicare for inpatient services (compared to 311% Bay area &
  298% state average)^ix
• charges 452% of Medicare for outpatient care (compared to 434% Bay Area &
  393% state average)
• had $864 million in operating revenue in 2023, but with $1.1 billion in unrestricted cash and investments through their system—Montage Health^x,xi
  • having excessive reserves while charging the highest prices not only in California but the country, clearly show they are charging higher prices due to market power, not financial need
  • hospitals point to high cost of living, high labor costs as reasons for high prices, but they have strong profits, and are charging higher prices when accounting for their higher cost of living (Medicare accounts for the cost of living)
• had $1.2 million in investment income (for the individual hospital) in 2023^xii
• earned 10.7% margins in 2022 (compared to statewide average of 1%)
• provided $2.3 million in charity care in 2022 of $798.3 million in net patient revenue (therefore charity care accounted for just 0.3 percent of net patient revenue in 2022)^xiii
• had $711 million total assets in 2024 and $684 million in 2023^xiv
• had 496 Days Cash on Hand (Montage Health) in 2024 (almost a 1.5 years)^xv and 17.2 in quarter 1 of 2026 for the individual hospital^xvi
  • vast difference illustrates that the hospital is holding reserves in the system itself, not the individual hospital
• had 3 stars in 2024 for CMS quality score compared to 3.5 Bay Area average when OHCA held a meeting in Monterey^xvii
• care has improved in quality, attaining a 4-star score from Medicare in 2026^xviii
• serves a predominantly White patient population, who tend to be older
• serves less patients with Medi-Cal than the state average, and more patients with commercial and Medicare coverage than the state average^xix

Salinas Valley Health Medical Center:

• is a district hospital
• has 263 beds, general and acute care provided
• charges 340% of Medicare for the commercial hospital price for the same service
• charges 378% of Medicare for inpatient services
• charges 468% of Medicare for outpatient services, the highest of the Monterey County hospitals compared to Medicare rate^xx
• had a net patient revenue of $591.5 million in 2022
• had an operating margin of 14% in 2022^xxi
• had an operating revenue of $715.8 million in 2025^xxii
• provided $1.9 million in charity care in 2022 (0.3 percent of net revenue)^xxiii
• had total cash and investments of $802 million in 2025
• had 376 Days Cash on Hand in 2025 (more than a year)^xxiv
  • note: S&P Global considers 275 Days of Cash on Hand extremely strong liquidity for standalone hospitals^xxv
• earned $22.6 million in investment income in 2025^xxvi
• has 4 stars for CMS quality score compared to 3.5 Bay Area Average as of 2026.
• serves predominantly Latino population, and serves younger population than CHOMP and oversee larger share of Emergency Department visits than the state average
• serves more patients with Medi-Cal than the state average (51% vs 38% state average), and less people with commercial (26% vs 30%) and Medicare coverage (19% vs 24%) than the state average as a percentage of coverage type^xxvii

Monterey County Overview

Monterey county is mostly rural, with people living in northern coastal areas and Salinas Valley, and the rest of the county is sparsely populated with long drives between the two. Because of the distance and terrain, residents only consider one or two of the hospitals physically accessible, and insurers must include all three hospitals in the county in their networks.

The economy is driven by tourism, retirement living in the northern coastal areas, and agriculture work in Salinas Valley. There are high property prices in coastal areas, and wages for work in agriculture are low, resulting in immense wealth inequality. High-income area residents’ median income is $95,000, significantly over the statewide median, while in central and eastern Salinas, 46% of residents live below the poverty line. Sixty percent of residents are Latino and 27% are White.^xxviii

Nearly 16% of Monterey residents said they had problems paying their medical bills, and 40 percent said this meant they were unable to afford basic necessities.^xxix Due to H.R. 1, between 12,500 and 19,000 Monterey County residents are expected to lose their Medi-Cal coverage.^xxx

The local high cost hospitals studied only provide less than 1 percent of each of their revenues in charity care to consumers eligible for assistance on their hospital bills. As H.R. 1 policies are implemented, and health care prices rise, more residents will need financial assistance to prevent crushing medical debt.

These high prices are caused by the profound lack of competition in the area and hospital market power amplified by the geographic distances, giving hospitals immense leverage to negotiate higher prices with insurers. All of this is made worse by the largest medical group being aligned with one hospital system.

Santa Cruz County

Santa Cruz High Cost Hospital Profile

Dominican Hospital

• is a non-profit hospital
• has 222 beds, general and acute care provided
• charges 333% of Medicare rates as their commercial hospital price for the same service in 2022^xxxi
• in 2022, had a net patient revenue of $465 million & 9.5% operating margin
• in 2025, had an operating revenue of $533.7 million
• In 2025, had $75.4 million in investment income.^xxxii
• provided $5.3 million in charity care (one percent of net revenue)^xxxiii
• had 772.8 Days Cash on Hand^xxxiv quarter 4 of 2025^xxxv
  • this is nearly 3 times what is necessary to have extremely strong liquidity (2.8 times what is considered extremely strong liquidity – 275 days – according to S&P Global)^xxxvi
• has 4 stars for CMS quality score compared to 3.5 Bay Area Average as of 2026^xxxvii
• serves less Medi-Cal patients than the statewide average for inpatient care and outpatient care^xxxviii
• is part of CommonSpirit Health, a health system with:
  • $20.46 billion in total cash and investments in 2025 and $19.16 billion in 2024
  • $16.75 billion in unrestricted cash and investments in 2025 and $15.55 billion in 2024

Santa Cruz County Overview

Santa Cruz County lies on the Northern end of Monterey Bay— and while it is California’s second smallest county by land area—it is home to 264,000 residents. The county has a significantly higher median income at $111,000/year than in Monterey County and the state average, but nearly 12% of residents live in poverty.^xxxix From 2022 to 2024, Santa Cruz County’s unemployment rate rose and remained higher than the state and national averages and more than half of jobs were within the lowest-paying tier. The largest employers in the county are in health care, tourism, hospitality, and recreation.

The county is majority White (54.5%) and Latino (35.5%) and has experienced population decline since 2021. The county has high housing costs relative to wages^.xl Low-wage jobs and high housing costs are a key factor driving population decline.^xli

About one-third of working households in the county are struggling to afford basic expenses like housing, health care, and childcare. That number rises to 58% for Latino households and 45% for households with young children.^xlii Last year, a local survey of Santa Cruz County residents 40 years and older found that 2 in 5 worry they cannot afford to stay in the county as they age. Nearly a quarter said they relied on free groceries in the past year—showing the rising pressure including housing and health care costs, on the county’s older residents.^xliii

There are three hospitals in the county—Watsonville Community Hospital, Dominican Hospital in Santa Cruz, and Sutter Maternity and Surgical Center of Santa Cruz. Dominican was identified by OHCA as one of 7 high cost hospitals in the state. Hospitals in the county charge 1.4 times the statewide average for delivering a baby ($19,212 vs $13,795) for a pregnant person with CalPERS coverage.^xliv

More than 80,000 county residents have Medi-Cal coverage, and 21,000 county residents could lose Medi-Cal coverage due to H.R. 1 and state budget cuts of coverage for undocumented Californians.^xlv  Despite being one of the high cost outlier hospitals in the state, Dominican Hospital only provides 1% of its revenue in charity care to patients to assist them in paying for their bills. High hospital prices directly lead to patients skipping and delaying care, higher health care prices, medical debt and depressing local wages.

Solution: Central Coast Consumer Advocacy for Affordability

Real Californians, Real Stories

Central Coast Residents Spoke Out About Hospital Prices

• Many workers, including teachers, hospitality workers, and school administrators from Monterey County drove to Sacramento for multiple Office of Health Care Affordability Board meetings over the course of the last 3 years to share their stories of extreme hospital bills, being chased by collections, and filing for bankruptcy.
• Employers, especially unions reviewing hospital prices, urged their members to drive out of the county for some hospital services to receive more affordable care and in some cases paid travel expenses to do so. Prices saddle thousands of people with medical debt, and force others to travel hours for surgeries or even to give birth.
• To save members on premiums, local union trusts say most of their members have an insurance plan that does not include Monterey hospitals.
• Higher hospital prices have led to higher premiums for employers and workers. With higher prices, workers have smaller wage increases, and higher cost-sharing, which is particularly burdensome for lower-wage workers leading to increased income inequality. Higher prices lead to employers, especially for low-wage workers to provide limited coverage or no coverage at all that are not related to the cost of providing care in the area.
• Community advocacy led to OHCA holding a Board Meeting in Monterey in 2024 to listen to community voices and an investigation into why prices at Monterey County’s three hospitals are so high.

The results showed what research has shown for decades about high hospital prices: hospitals in Monterey use their market power to charge higher prices due to lack of competition. Monterey County hospitals did not:

• provide better quality care
• provide higher wages to their workers

The highest prices were not explained by providing more care to people with Medi-Cal & Medicare Coverage with higher commercial prices, or what hospitals call “cost shifting.”ⁱ

What OHCA is Doing About the High Price of Health Care on the Central Coast

In 2025, the OHCA Health Care Affordability Board set a lower cost growth target for the seven high-cost hospitals including the three Central Coast hospitals above—Community Hospital of the Monterey Peninsula, Salinas Valley Health, and Dominican Hospital of Santa Cruz. These hospitals will have cost growth target half of the statewide target. While the rest of the state’s hospitals are required to meet a target of 3.5% in 2026, the seven high cost hospitals will have to meet a target for 1.8% cost growth in 2026 decreasing to 1.7% in 2027 and 2028, and 1.6% in 2029.^xlvii Because these hospitals have prices sometimes double other hospitals even after accounting for cost of living, OHCA determined a target half the statewide was necessary to ensure that communities with high hospital prices experience relief. Without this lower target, hospital prices in the Central Coast and other high cost hospital communities would start at a higher baseline and continue to rise higher than other parts of the state.

Endnotes

1. Criteria: Governments: U.S. Public Finance: U.S. and Canadian Not-For-Profit Acute Care Health Care Organizations (S&P Global, 2018)
2. An Investigative Study of Hospital Market Competition in Monterey County (Office of Health Care Affordability, 2025)
3. Health Care Affordability Board Meeting – August 28, 2024 (Office of Health Care Affordability)
4. An Investigative Study of Hospital Market Competition in Monterey County (Office of Health Care Affordability, 2025)
5. Health Care Affordability Board Meeting – August 28, 2024 (Office of Health Care Affordability)
6. Health Care Affordability Board Meeting – August 28, 2024 (Office of Health Care Affordability)
7. Financial Health of California Hospitals (Department of Health Care Access and Information, 2025, Q4)
8.  “% of Medicare” is a unit of measurement for the cost of health care. 100% of what Medicare pays is seen as a “baseline.” The average rate charged to commercial insurers by California hospitals is 200% of Medicare. Medicare accounts for cost of living.
9. Health Care Affordability Board Meeting – August 28, 2024 (Office of Health Care Affordability)
10. Financial and Utilization Reports – Community Hospital of the Monterey Peninsula (Department of Health Care Access and Information, 2025)
11. Montage Health Fitch Credit Ratings (Fitch Ratings 2024)
12. Financial and Utilization Reports: Community Hospital of Monterey (Department of Health Access and Information)
13. Hospital Financial Data Interactive Series: Hospital Financials (Department of Health Care Access and Information, 2025)
14. Nonprofit Explorer: Community Hospital of the Monterey Peninsula (ProPublica)
15. Montage Health Fitch Credit Ratings (Fitch Ratings 2024)
16. Financial Health of California Hospitals – Community Hospital of the Monterey Peninsula (Department of Health Care Access and Information, 2025)
17. Health Care Affordability Board Meeting – August 28, 2024 (Office of Health Care Affordability)
18. Care Compare: Community Hospital of the Monterey Peninsula (Medicare.gov)
19. Health Care Affordability Board Meeting – August 28, 2024 (Office of Health Care Affordability)
20. Health Care Affordability Board Meeting – August 28, 2024 (Office of Health Care Affordability)
21. Hospital Financial Data Interactive Series: Hospital Financials – Salinas Valley Health Medical Center (Department of Health Care Access and Information, 2022)
22. Financial and Utilization Reports – Salinas Valley Health Medical Center (Department of Health Care Access and Information, 2024)
23. Hospital Financial Data Interactive Series: Hospital Financials – Salinas Valley Health Medical Center (Department of Health Care Access and Information)
24. December 2025 Finance Committee Packet (Salinas Valley Health, 2025)
25. Criteria: Governments: U.S. Public Finance: U.S. and Canadian Not-For-Profit Acute Care Health Care Organizations (S&P Global, 2018)
26. Financial and Utilization Reports: Salinas Valley Health Medical Center (Department of Health Care Access and Information)
27. Health Care Affordability Board Meeting – August 28, 2024 (Office of Health Care Affordability)
28. An Investigative Study of Hospital Market Competition in Monterey County (Office of Health Care Affordability, 2025)
29. Paying the Price: Californians Struggle with the High Cost of Care (California Pan-Ethnic Health Network, 2026)
30. County of Monterey Leaders Detail Severe Local Health and Fiscal Impacts of H.R. 1 (County of Monterey)
31. February 2025 Health Care Affordability Board Meeting Presentation (Office of Health Care Affordability, 2025)
32. Financial and Utilization Reports: Dominican Hospital (Department of Health Care Access and Information)
33. Hospital Financial Data Interactive Series: Hospital Series – Dominican Hospital (Department of Health Care Access and Information)
34. Hospital Financial Data Interactive Series: Hospital Financials (Department of Health Care Access and Information, 2025)
35. Hospital Financial Data Interactive Series: Hospital Financials (Department of Health Care Access and Information, 2025)
36. Criteria: Governments: U.S. Public Finance: U.S. and Canadian Not-For-Profit Acute Care Health Care Organizations (S&P Global, 2018)
37. Care Compare – Dominican Hospital (Medicare.gov, 2026)
38. Hospital Profile: Dominican Hospital (Department of Health Care Access and Information, 2024)
39. QuickFacts: Santa Cruz County, California (Census.gov)
40. Santa Cruz County Strategic Initiatives: Economic Outlook (Santa Cruz County)
41. Santa Cruz County 2025 State of the Workforce (Workforce Santa Cruz County, 2025)
42. Santa Cruz County Real Cost Measure Community Discussion Shines Light on What it Takes to Survive (United Way, Santa Cruz County, 2025)
43. Santa Cruz County’s aging population struggles with housing, health care and social isolation, new survey finds (Lookout Santa Cruz, 2025)
44. Health Care Affordability Board Meeting – August 28, 2024 (Office of Health Care Affordability)
45. Report: 21,000 Santa Cruz County residents could lose health insurance by 2028 (Santa Cruz Local, 2025)
46. An Investigative Study of Hospital Market Competition in Monterey County (Office of Health Care Affordability, 2025)
47. Updated to Draft Motions Presented – April 2025 (Office of Health Care Affordability, 2025)

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