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December 9, 2023

Nurses question hospital bankruptcy decision

Panel at town hall claims Hazel Hawkins filing was unnecessary

A town hall meeting in Hollister drew more than 40 attendees on July 6 as concerned residents, nurses and local politicians convened to discuss the future of Hazel Hawkins Memorial Hospital (HHMH). The forum comes on the heels of the San Benito Health Care District’s decision on May 22 to file for Chapter 9 bankruptcy.

A panel of speakers, which included nurses currently employed by HHMH and a presenter on behalf of the California Nurses Association (CNA), explained to the audience that the district’s filing for bankruptcy was a potentially catastrophic and unnecessary step in resolving the issues at the Hollister hospital.

The event was was organized by the National Nurses United (NNU) and the CNA “to discuss the future of San Benito County’s only acute-care hospital and why nurses took a no confidence vote in the Board of Directors of the San Benito Health Care District after they decided to file for bankruptcy,” according to a press release.

Hospital workers critical of the district board’s decision are afraid that Hollister-based HHMH is walking down a dangerous path that may lead to the hospital closing if staffing levels continue to fall.

CNA Research Lead Mike Rabourn made a presentation to the audience claiming that the dire  fiscal picture painted by the district board has improved in the months since it declared a fiscal emergency in November 2022.

Rabourn stated that, contrary to what the district board has led the public to believe, it has actually experienced a positive net income since fiscal year 2021. Between July 1, 2021 and May 31, 2023—the last three years—the district has reported $5 million in net income.

Additionally, he noted that the factors that caused the district board to proclaim a financial emergency last fall have been resolved. These included the $5.2 million in over-payment to Medicare (payments were reduced to $44,000 a month); the delayed $13 million supplemental from the state; and the renewal of its contract with Anthem that was in doubt.

Rabourn argued that the district’s current cash flow can float the hospital until it receives the $13 million payment from the state. 

The district is also likely to receive up to $10 million in financial assistance from the Distressed Hospital Loan Program, according to Rabourn. He also indicated that in the last five years, different CEO’s of HHMH have received nearly $3 million in compensation, another sign of financial solvency.

“What changed, why bankruptcy, why now?” asked Rabourn.

Nurses employed by HHMH, 120 of whom are represented by the CNA, showed up in force wearing red to the meeting. Ariahnna Sanchez, a registered nurse who has worked at HHMH for more than 10 years, detailed some of the cuts that the hospital made after announcing its fiscal emergency.

“We have an ICU, but the ICU is currently closed. Our ICU has been closed now for a month. And when I’m working in the emergency room, I’m telling people this. Our community has no idea that our ICU is closed,” said Sanchez.

Sanchez told the audience how the uncertain future of HHMH has created a staffing shortage as nurses leave to work for other hospitals.

“At the end of this day, the decision is taking a toll on our workers and affecting patient care,” said Sanchez. “Due to the uncertainty of this bankruptcy, nurses are fleeing.”

Representatives for CNA claim that a major factor in the district board’s decision to file bankruptcy is an ongoing labor dispute between HHMH and the unions that affect the contracts of all the hospital workers here, not just nurses.

Diane Beck, a registered nurse at HHMH and Chief Nurse Representative for the CNA for the hospital, spoke to the Free Lance before the town hall.

“The hospital wants to invalidate not just the nurses’ contract, but all the workers’ contracts. Basically the whole hospital is union,” said Beck.

As a result of the bankruptcy procedure, hospital services could be reduced and union contracts unilaterally restructured by the district. Labor costs are the hospital’s largest expense, according to district advisors. Adjustments to benefits for employees may also be implemented, which may include changes to employee benefit plans.

According to Beck, if these contracts are invalidated the area will lose a number of skilled nurses and the scope and level of care at the hospital will plummet. If the dispute is not resolved and HHMH continues to make cuts, the results may be dire. 

“If they close the hospital it will be devastating, there will be a lot of lives lost,” said Beck.

When reached by the Free Lance for comment, a spokesperson for HHMH said some of the claims presented at the July 6 town hall were inaccurate. The notion that the hospital is more financially solvent than the administration claims is “simply not true,” said HHMH spokesperson Marcus Young. 

According to Young, HHMH currently has enough cash on hand to finance 35 days of hospital operations, which is far short of the 222-day median for California critical care hospitals.

Young also contends that Rabourn’s presentation did not consider the “whole picture” of HHMH’s’ finances. The fact that many of the revenues recorded in the profit-and-loss statement that ended May 31 are non-recurring—including $3.2 million from the American Rescue Plan, and about $1 million from the settlement of a Medicare Cost Report—was left out. These adjustments will count as losses moving forward because “they cannot be counted as ongoing cash flow,” said Young. 

He added that while HHMH’s ICU is closed, it is not because of the Chapter 9 filing—and the hospital is actively recruiting more staff in order to reopen the unit. 

“A combination of the lingering impacts from the Covid pandemic, higher wages paid by larger urban medical centers and a general exodus from the medical field by qualified staff have all contributed to this crisis,” said Young. “For the ICU, we are caring for patients who need that level of care through transfers to other medical facilities once they are stabilized.”

Regarding the discussion of a labor dispute between the hospital and bargaining groups, Young pointed out that just this week the Engineers and Scientists of California Local 20, which represents about 17 hospital employees, unanimously endorsed a new contract with HHMH.

“We encourage CNA to join us at the bargaining table so we can work out the details of a new and sustainable contract with them and their members—one that not only addresses the needs of our hard working nurses, but also the needs of the greater community and the district,” Young said.

As part of the San Benito Health Care District, HHMH is run by a public entity. However, in the face of a Chapter 9 bankruptcy, the takeover of the hospital by a for-profit organization is a real possibility. 

Quiché Rubalcava, a 19-year registered nurse at Watsonville Community Hospital, was invited to speak at the July 6 town hall about that hospital’s troubled history after it filed for bankruptcy and went to a private buyer in the late-1990s. Rubalcava detailed how Community Health Systems (CHS), a private health care corporation, slashed staffing and failed to deliver on promises of investing and modernizing the hospital.

“During CHS’s 20-plus years of ownership, the frontline staff were cut from more than 600 to less than 200. That meant that key medical services were also cut drastically along the way,” said Rubalcava.

In public comment, residents and nurses complained about the perceived lack of communication from the district board during recent meetings leading up to the bankruptcy decision.

“They didn’t want to listen, interrupting and just not wanting to hear our voice and that is the problem,” said Ariahnna Sanchez. “We have answers, we have ideas. Listen to us, we have surgeons and doctors who are working to try to make things work, but our voice is not being heard.”

The meeting was attended by various local officials, including Mayor Mia Casey, Vice Mayor  Dolores Morales, District 4 Supervisor Angela Curro and District 5 Supervisor Bea Gonzales. 

Gonzales wanted residents to know that their local elected officials are listening to them and working towards a solution for all.

“We hear what is going on in the community, we hear what is going on in the hospital. And there are people working behind the scenes to save the hospital,” said Gonzales. 

She encouraged residents to reach out to local officials, including putting pressure on the district board in order to voice their concerns. But she also asked for patience as the process unfolds.

“As a supervisor, we cannot go without a hospital, so I feel your pain. I just don’t know what the answer is and, so, I’m just asking you to give us some time,” Gonzales said. 

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