Supporters, opponents spend big on San Benito County hospital measure

San Benito County voters have the fate of Hazel Hawkins Memorial Hospital in their hands this Nov. 5 election as they decide on a ballot measure proposing its sale to an out of state company.

Measure X is the final step in the San Benito Health Care District’s (SBHCD) efforts to sell the hospital and its assets to Insight Foundation of California, a nonprofit created by Michigan-based Insight Foundation of America. The company was selected by the SBHCD board to partner with the district in a cash deal over other options. The San Benito County Board of Supervisors proposed a Joint Powers Authority to keep the hospital under local control, but their proposal failed to convince the hospital board.

Since the board declared a fiscal emergency and subsequently filed for Chapter 9 bankruptcy in 2023, a bitter public battle between nurses, hospital workers, local officials and constituents on one side, and hospital administration and its supporters on the other ensued.

Ultimately, the California Nurses Association, which represents more than 100 nurses at HHMH, won a legal challenge against the hospital board in bankruptcy court, which ruled the hospital failed to prove it qualified for Chapter 9.

Despite the ruling, the board has moved forward with the process to seal the deal with Insight. 

The company runs six acute care hospitals, six surgery centers, 28 clinics and employs more than 4,000 workers in Michigan and Illinois. Insight has plans to create a $50 million “capital expenditure plan” to invest in facilities and services at Hazel Hawkins. 

According to a February 2024 appraisal done by HealthCare Appraisers, HHMH is valued at between $59,330,000 and $65,575,000.

But before that can happen, hospital board bylaws require it to put the sale to a vote of the people, and submitted a ballot initiative to the county elections department in August. The ballot question reads:

“Without increasing taxes and to continue providing local access to emergency medical care, surgery, radiology, long-term care, mother/baby care, clinic and physician services at Hazel Hawkins Memorial Hospital, shall San Benito Health Care District’s measure be adopted, leasing (with lessee option to purchase) certain District real property assets, and selling substantially all other District assets, to nonprofit Insight Health Foundation of California, Inc. (or another qualified buyer) for fair market value, determined by independent appraisal, providing local oversight and continued hospital services in San Benito County?”

The ballot measure has faced pushback from the board of supervisors, who voted to put their own advisory measure on the ballot, Measure B, which reads:

“To keep Hazel Hawkins Hospital public and under local control, shall the County of San Benito establish an agreement with the San Benito Health Care District and other interested jurisdictions to form a partnership in the form of a Joint Powers Authority to operate the hospital?”

The county’s advisory measure is non-binding and is meant to be informative, but it has gotten its own criticism for perceived undue influence on the ballot.

A major point of contention for the community is the loss of Hazel Hawkins as a public hospital and its transformation into a for-profit entity controlled by a company which some allege has questionable practices. County officials began circulating documents earlier this year purportedly showing that the company’s flagship, nonprofit hospital in Chicago was paying higher-than-usual percentages to Insight Management Consultant to manage the facility.

Insight Management is a for-profit company owned by Insight Foundation of America CEO Dr. Jawad Shah. According to 2022 tax documents, the arrangement paid Insight Management 14% of the patient revenues for the hospital. While there is no standard for management contract fees, market data show that net patient review for these contracts is between 0.5% and 2.0%, according to a 2018 report by Becker’s Hospital Review. 

Insight defended its practices as transparent and fair.

“Insight Chicago contracts with Insight Management at fair market value rates vetted through a third party consultant and approved by the nonprofit hospital board. The costs follow the services provided such as administration, medical, legal, softwares, and revenue cycle management,” said Insight Director of Public Policy and Government Relations Dayne Walling in an email to the Free Lance.

Despite the scrutiny, Insight has gone ahead all in on Measure X, pouring money into the campaign.

Big money for ‘Yes’ campaign

According to the most recent campaign finance disclosure statements, the Committee to Save Hazel Hawkins- Yes on X is primarily funded by Insight Management. 

As of Oct. 15, the company had contributed $75,000 to the committee. Save Hazel Hawkins has also received contributions from a few area residents, including a $1,000 contribution from Anne Marie Barragan on Oct.15. Barragan serves as board president for the Hazel Hawkins Foundation.

The largest individual contribution came from Hollister resident Scott Willingham, who gave $3,000 on Oct. 10.

Campaign filings dated Sept. 26 show expenses for the committee at $25,000 so far, with a running total of unpaid bills at $80,051.42. 

Most of the expenses have been payments to political consultants EMC Research Group ($35,900) and the political consultant/committee treasurer Sean P. Welch.

Nurses Outspend on ‘No’ campaign

The California Nurses Association Political Action Committee has led the charge against Measure X, spending $142,392.42 as of Oct. 18. 

The bulk of the money has gone to a video ad campaign totaling $119,499.97, according to a Sep. 18 filing. 

The PAC has not contributed to any other opposition campaign.

The only other opposition on the books is the Committee to Keep Hazel Public-No on X, which lists local resident Mary Zanger as its treasurer. According to an Oct. 14 filing, the group had raised $299.00 and listed expenses at $260.00.