Gov. Gavin Newsom on Aug. 24 announced $300 million worth of zero-interest loans for struggling hospitals, including Hazel Hawkins Memorial Hospital which will receive $10 million from the program.
The Hollister hospital, which declared bankruptcy earlier this year, will receive the funds in the coming weeks. Hazel Hawkins spokesperson Marcus Young said the money “will be used to support (Hazel Hawkins’) continued provision of high-quality patient care to San Benito County residents.”
The funding is part of the state’s Distressed Hospital Loan Program, which allocates a total of $300 million to 17 hospitals. The program is “the result of an urgent and coordinated effort to bolster distressed hospitals’ operations and improve regional healthcare services,” says a press release from Assembly Speaker Robert Rivas’ office.
The program offers working capital, interest-free loans to nonprofit and publicly owned hospitals that are struggling financially.
HHMH is one of two hospitals in Rivas’ district receiving funds from the loan program. The other is Watsonville Community Hospital in Santa Cruz County, which will receive $8.3 million from the Distressed Hospital Loan Program.
The program was launched after Assemblymember Esmeralda Soria, of Merced, authored the legislation in response to the closure of Madera Community Hospital in her district.
“I commend Assemblymember Esmeralda Soria and Governor Newsom for their leadership, and I am grateful that two Central Coast hospitals will see immediate financial assistance,” Rivas said in the press release. “I’m also proud that our state has been able to provide a lifeline to many small, rural hospitals, which are closing at record rates in other states, but California has shown a commitment to maintaining access to care for all. We have a lot of work to do to ensure that our communities continue to have the best health-care services. I am very pleased we were able to quickly deliver this financial help to our hospitals that need it most.”
The San Benito Health Care District Board of Directors, which oversees HHMH, declared a fiscal emergency in late 2022. Since then, HHMH administrators have pursued numerous ways to keep the healthcare facility alive—including partnering with another entity. The board in May voted to declare Chapter 9 bankruptcy.
Earlier this summer, HHMH received a Letter of Intent from American Advanced Management to enter into a partnership with the local hospital. The two parties are currently in discussions about the details of such a potential partnership.
HHMH on Aug. 24 noted its thanks to elected officials who helped the Distressed Hospital Loan Program come to fruition.
“We want to thank the efforts of Assemblymembers Robert Rivas and Esmeralda Soria and their staff, whose constant focus on this issue paved the way for this vital assistance,” Young said. “Additionally, we would like to acknowledge the hard work by Senator Anna Caballero, Treasurer Fiona Ma as well as the leadership by Governor Gavin Newsom for making this critical program available.”
Central Coast lawmakers also celebrated the announcement as an important step in supporting hospitals in vulnerable communities.
“It brings me tremendous relief to know that Madera Community Hospital and Hazel Hawkins Memorial Hospital, in San Benito County, have received grant awards and will be able to ensure that community members can once again receive services in their own communities,” said Caballero, who represents State Senate District 14. “When seconds mean the difference between life and death, we cannot afford to have hospital doors closed. Today is a great day for the region.”
State Sen. John Laird, who represents District 17 which includes Santa Cruz County, added, “I am deeply grateful that this additional funding has been authorized to support badly needed healthcare for underserved residents in Hollister and Watsonville. The Watsonville Hospital board and staff have set a standard for accountability and transparency in their recovery, and I am hopeful that the Hazel Hawkins administration shows the same organizational determination to remain a sustainable force in the community.”