In a last-minute decision at their May 23 regular meeting, the San Benito County Health Care District (SBHCD) voted to keep negotiating with Michigan-based Insight Foundation of America for a potential buyout, while also continuing to consider San Benito County’s proposal to keep Hazel Hawkins Memorial Hospital (HHMH) under local control.
An 11th-hour amendment to a decision that would have halted negotiations for the establishment of a Joint Powers Authority (JPA) with the county in favor of pursuing a transaction with Insight was added after board director Bill Johnson stopped the vote in its tracks.
The May 23 meeting opened with the much-anticipated conclusion to the matter, which carried over from a May 20 special meeting. At that hours-long session, representatives from both Insight and San Benito County made their final pitches to the board in order to continue negotiations.
When it came time for him to vote on the original motion brought forth by board chair Jeri Hernandez at the May 23 meeting, Johnson said he wanted to consider the public’s input.
“[The constituents] don’t want the JPA excluded from this, and if this motion is about being exclusive with Insight, I want clarification on that. I’m asking… are we discounting the JPA offer or are we going to continue to look at both sides?” Johnson asked.
Hernandez clarified that voting yes on the motion would effectively exclude the JPA from future negotiations.
“I vote no,” Johnson said, to applause from attendees in the room.
Board director Rick Shelton, who was next in line for the roll call vote, also dissented.
“I, along with Bill, would like to at least like to keep the JPA on the table,” Shelton said.
The surprising turn of events came after an opening statement by Hernandez led some attendees to comment that they felt a decision had been made before the vote.
“I felt like the opening statement was dismissive of the county […] and I think that’s unfortunate. I don’t think a decision should be made yet,” said attendee Stacie McGrady during public comment.
The county’s JPA proposal would infuse the SBHCD with $5 million at the outset, and would guarantee a $7-12 million line of credit to grow HHMH. It would also create an operating governance board that would change the way the current district board operates. The proposal calls for a new board to include two representatives each from the SBHCD and the County of San Benito, with an additional five expert members, such as physicians and financial professionals.
Insight’s proposal did not give any detailed plans other than its offer to purchase HHMH for $55 million. The May 20 presentation focused on its achievements in other markets, including Chicago and Michigan. They touted the high volume of patients in facilities spanning a total of six acute care hospitals with 1,344 beds; 4,200 employees, including 580 physicians; and 10 labor unions.
Medical staff at HHMH overwhelmingly support the county JPA option, including more than 100 hospital nurses represented by the California Nurses Association (CNA) and hospital physicians.
Courtney Parrinello, a registered nurse at HHMH’s emergency department, said in an email statement that nurses have raised concerns over the board’s transparency since it declared a fiscal emergency in November 2022.
“It is clear that many in the community and the majority of doctors oppose privatization of our community hospital. We hope the board uses this time to reevaluate what is at stake as its the very future of our community’s health and well-being. We again urge the board to reject any proposal to sell our public asset to a private buyer,” Parrinello said.
Johnson said that the board needs more time to evaluate both proposals and continue conversations with the hospital staff.
“I think what it does is it buys us time; it gives us the opportunity to get with the doctors, to get with the nurses [and] to allow the news media to get the actual information out,” Johnson said. “If the JPA presents the best plan for us, great. If Insight has something that is going to make the hospital better, increase the confidence of the people in the community, they will go with it.”
After some confusion on how to proceed, the board ultimately voted 4-0 to continue pursuing negotiations with Insight — including a lease-to-own option — and to also keep up talks with the county.
San Benito County Board of Supervisors Chair Angela Curro, who is one of the proponents of the JPA, said she was surprised by the board’s decision.
“I think what surprised me today is that the motion of the directors is to move forward with negotiations, but there’s not a clear understanding of what that means,” Curro said after the decision.
She added that the JPA proposal still needs to work out some details before the county could begin seeking a lease management firm to negotiate leasing the hospital.
Curro thinks that the district board is listening to constituents and their concerns over what they see as a push for a private sale.
“I would say they definitely were hearing the comments and there were some concerns that there’s not enough information coming from Insight for the public. There’s not enough information that they feel is showing why [the district board] is so strongly supportive of a sale.”
The SBHCD will continue to evaluate the two proposals for the time being and is expected to focus on one or the other in a decision to come later this summer.
