An informational town hall was held on Sept. 21 regarding the latest developments in the ongoing dispute over the future of Hazel Hawkins Memorial Hospital (HHMH).
Around 30 people attended the event held at the Strada Verde information center. The session was put on by the California Nurses Association (CNA).
It was the second town hall in the last three months hosted by CNA-represented nurses working at HHMH and the hot topic of discussion was the controversy surrounding a potential buyout of Hollister’s only hospital by a private company embroiled in corruption allegations.
In early August, the San Benito Health Care District (SBHCD) infomed the public that they received a Letter Of Intent from American Advanced Management (AAM) in which the organization proposed a potential “strategic partnership.” AAM is a Modesto-based 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.
The news surprised many in the community as the initial conversations around the potential partnership were not made public. In an Aug. 7 special meeting of the district board, attendees were notified that the initial letter of intent by AAM to explore a buyout of HHMH was not legally binding and only served to open the conversation.
Since then, allegations against AAM have surfaced, accusing the organization of attempting 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 that “there were better ways of handling that process,” according to attorney Hamid Rafatjoo, who represents AAM. That investigation is ongoing.
This has raised alarm bells for many, including CNA.
Nurses’ Concerns
Sonia Duran is a nurse at HHMH’s medical surgical department and an outspoken member of CNA, which represents roughly 150 nurses at the hospital. At the town hall, Duran expressed concern over AAM’s reputation.
“There are so many questions and red flags about this buyer,” Duran said.
The bribe allegations against AAM have caused CNA to wonder if the same might be happening with hospital administration at HHMH, and if there is an outsized influence being extended by the organization to place AAM as the frontrunner for a partnership with the local hospital.
“Is it happening with our board of directors and administration? To be clear, we are not taking a position against this buyer, but we are calling on the board to do their due diligence and really look for the facts. If we found this information, did they?” Duran asked.
HHMH on Sept. 22 put out a statement responding to the allegations made at the town hall.
“In response to concerns regarding AAM’s interactions with Madera Hospital, while we cannot comment on that situation, we are aware of it. We are currently in a due diligence phase of those negotiations. The voters in San Benito County will have the final say on who and if we proceed with AAM or any other buyer,” read the statement.
While the questions surrounding AAM are the latest developments in the debate over which direction HHMH will take, the prevailing concerns regarding the labor dispute at the hospital and its financial situation still loom large.
Unresolved Issues
Mike Rabourn, CNA’s Research Lead, made a presentation to attendees Sept. 21 and argued the hospital is doing better financially than it is letting on and that it is doing well this fiscal year.
“So far, the hospital has strong financial performance,” Rabourn said.
The financial stability, Rabourn said, is reflected in the fact that hospital administration has been given a 3% raise over the last five years, with HHMH doling out $921,900 in executive compensation in 2022.
Additionally, HHMH received $10 million from the state after Gov. Gavin Newsome on Aug. 24 announced $300 million worth of zero-interest loans for struggling hospitals.
In its statement, the hospital said that the loan did not change the bankruptcy filing it is proceeding through.
“While we are pleased that the State has approved an emergency loan of $10 million, it does not change the fact that we need to remain in the Chapter 9 Bankruptcy process to ensure the viability of the hospital as well as to continue to deliver much needed medical care to the greater San Benito County community,” the statement said.
As for the 3% pay increases, HHMH said that all non-union members were already slated to receive the raises before the hospital knew it would receive the state loan and CEO Mary Casillas’ salary is “commensurate with our market and health system size.”
CNA nurses at HHMH are still in a labor dispute with hospital administration and allege that arbitrary cuts have been made to staff benefits and wages due to the financial situation and bankruptcy proceedings.
