The San Benito County Board of Supervisors voted at the Oct. 24 regular meeting to draft a letter of intent and initiate talks of a partnership with Hazel Hawkins Memorial Hospital. The unanimous 5-0 decision came after ECG Management Consultants presented the board with the findings of their investigation into the state of the hospital.
ECG’S report, which was released on Sept. 29, concluded that HHMH did not need to file for bankruptcy to remedy its financial situation. The report also stated that a private sale to a for-profit provider is unnecessary and that the administrative board should be dissolved.
ECG, a healthcare consulting firm, was contracted by San Benito County to lead an investigation into the affairs of the hospital back in August, after HHMH announced it had received a letter of intent for American Advanced Management. AAM sent the non-binding LOI to hospital administration in hopes of entering into a “strategic partnership.”
AAM is a Modesto-based private healthcare company that operates six hospitals and other medical facilities in central and northern California. The organization was founded in 2012 when it opened Central Valley Specialty Hospital in Modesto and was the first company in California to revive a rural hospital following bankruptcy and closure.
In September, allegations of misconduct by AAM surfaced when it was reported that the organization attempted to bribe the CEO of Madera Hospital with a $150,000 check and an executive position at the hospital if it was sold to or managed by AAM.
AAM has denied that the money offered was a bribe and said “there were better ways of handling that process,” according to attorney Hamid Rafatjoo, who represents AAM. That investigation is ongoing.
Despite the allegations, HHMH has continued talks with AAM, and at the Sept. 28 San Benito Health Care District board meeting, interim CEO Mary Casillas reported that she is continuing to explore a partnership with AAM.
Now, ECG’s report has put into question the course of action taken by hospital administration and the healthcare district board regarding HHMH’s future. At the Oct. 24 meeting, representatives for ECG encouraged the county board of supervisors to find an alternative for the hospital
Making Their Case
At the board meeting, ECG senior partner Jeff Hoffman said that a community like Hollister is well-suited to support a hospital the size and with the level of care that HHMH could provide. Expansion of services—particularly, a robust core of physicians and a larger obstetrics department— is recommended for a growing community, Hoffman said.
Hoffman reiterated the main recommendations of the report and called for a more transparent, publicly-led governing board for HHMH, including new hospital administration.
“We also think there needs to be a new management system in the hospital, trying to recruit one-off people and the CEO or the CFO is really hard,” Hoffman said.
Additionally, Hoffman said that an additional government entity—like a Joint Powers Authority— would be a welcome step to give support to a new hospital administration.
ECG’s recommendations echo what the county board of supervisors proposed to the Hollister City Council and the San Juan Bautista City Council last week.
Before this week’s board of supervisors meeting, Cecilia Montalvo, a consultant for San Benito County, made the rounds presenting the ECG report to the local city councils to garner their support for a Joint Powers Authority (JPA).
A JPA is a legal entity that allows two or more public agencies to jointly exercise common powers. In the case of HHMH, a JPA could help the hospital out financially through a line of credit provided by San Benito County and local agencies. The JPA would support the San Benito Health Care District in governing the hospital.
The county is considering partnering with Salinas Valley Health to bring it on as a manager of the hospital in the case a JPA does take over HHMH.
At a presentation to the Hollister City Council, Montalvo said that a JPA would give the city “a seat at the table” in the decisions of how local healthcare is administered. However, the council showed apprehension about moving forward with their own letter of intent for a partnership and asked the city attorney to look into the matter.
During public comment at the Oct 24 meeting, speakers showed support for the board’s initiative.
“Yes, it’s going to take some sacrifice, but we just might end up with Hazel Hawkins Hospital for the residents, owned by the residents, and here not for the next year, but for the next 25 years. So please, I’m asking you to endorse the JPA move forward with it,” said resident Rob Bernosky.
Isabella Zanger, a registered nurse at HHMH, spoke about the effects the bankruptcy proceedings have had on staff and patients
“We want to move together toward a solution that keeps our hospital doors open and also respects its workers rights and keeps us out of bankruptcy,” Zanger said.
During the board’s comment section, District 4 Supervisor Angela Curro clarified with Montalvo that the board’s submission of a letter of intent to the HHMH and its governing board did not stop the hospital from pursuing other alternatives.
Montalvo said that the board of supervisors’ letter of intent does not mean a commitment to a partnership and that she would expect the process to remain open.
Curro reiterated to residents that the board is looking for a solution that benefits everyone.
“I want the community to be aware that it’s not just about us and what we’re trying to do,” Curro said. “It’s about all of us coming together and uniting behind this, including the hospital district board. And that is where you as a community have voices that we don’t have, because they’re your elected officials”.
The Free Lance reached out to HHMH on Oct. 24 for comment on the county board’s decision to submit an LOI to its administration.
“Today, the San Benito County Board of Supervisors voted to enter into a non-binding Letter of Intent (LOI) with the San Benito Healthcare District. While we await the specifics of that LOI, we want to express that we are pleased that the County wants to play a role in the future of healthcare for the residents of San Benito County and in that spirit we welcome its LOI,” said HHMH spokesperson Marcus Young.
A Different View
HHMH stated in a media release on Oct. 17 that it received a report from Jerry Seelig, the Patient Care Ombudsman (PCO) appointed by the court. After weeks of investigation, the PCO concluded that the leadership of HHMH is strong and suitable to move the hospital forward, according to the Hollister hospital.
“The Interim CEO and Chief Responsible Officer [Mary Casillas] is qualified and an experienced professional,” said the media release, quoting the PCO report.
HHMH also stated that the PCO report indicated confidence in the operations and departmental leadership. This assessment is at odds with the ECG report, which suggested the hospital administration be replaced as a potential action taken by a future Joint Powers Authority.