Watsonville Community Hospital board voted to close maternity services, NICU. What could keep them open?

➤ Para leer el artículo en español, haga clic aquí.

Last week, the Pajaro Valley Health Care District board of directors, which oversees Watsonville Community Hospital, voted to shutter the hospital’s maternity services, including labor and delivery, and its neonatal intensive care unit (NICU). 

The decision came amid the hospital’s ongoing financial challenges. WCH management has previously projected that, without closing a service or securing additional funding, the facility would “ exhaust funds available for payroll within six to 12 months,” potentially forcing a full closure.

But the board’s vote does not mean the units will automatically close. The hospital submitted a 120-day closure notice to the state on Oct. 29, the day following the board’s vote. Any potential closure would be “no earlier than 120 days from that date,” according to a media release from the hospital. 

During those four months, the hospital will continue to seek funding and potential partnerships. The process also requires a public hearing within 60 days of the notice. Hospital leadership also plans to work with regional partners, including Salud Para La Gente and Dominican Hospital, to “ensure continuity of care for patients and families should service changes become necessary.” 

The five-member board could also rescind its decision if the hospital secures enough funding to keep the services operating. So, what options does Watsonville Community Hospital have? 

Another distressed hospital grant from the state

During last week’s meeting, interim CEO Tim Moran said the hospital will be applying for another distressed hospital grant. The program, administered by the California Department of Health Care Access and Information (HCAI), will distribute $85.5 million to hospitals facing financial challenges. It’s unclear how many hospitals will receive funding. 

Moran said the hospital is asking the state for $26 million, with $7 million designated to support maternity services and the NICU. The money will help stabilize the two units for at least a year, giving WCH leaders more time to pursue growth initiatives and other strategies to increase financial efficiency. 

WATSONVILLE COMMUNITY HOSPITAL: Read more Lookout news and Community Voices opinion coverage here

The rest of the $26 million, if awarded, would go toward recruiting specialists and physicians, along with consulting for a new electronic health record system.

Hospitals applying to the grant must be a not-for-profit or public hospital, operate as a standalone hospital, demonstrate a government and uninsured payer mix of “at least 60% of gross revenue” and demonstrate best efforts to exhaust other financial options, according to the HCAI website.

Watsonville Community Hospital will also need to submit a “viable strategic initiative plan” that includes financial projections, an explanation of how the money will be used and the board’s strategies to regain financial viability and continue operating. 

Moran told the board that the hospital should find out in December whether it will receive the funding. Even if WCH qualifies, there’s no guarantee it will receive the full $26 million it is requesting.

Earlier this year, the hospital received a $10.6 million distressed hospital grant from the state that was used to help pay down outstanding debts and cover its ongoing operating shortfall. The hospital currently loses nearly $85,000 a day. 

Hospital formally asks Kaiser Permanente, California Nurses Association for help 

Moran informed community members and the board that he is seeking financial assistance from Kaiser Permanente, one of the hospital’s partners, and the California Nurses Association, the union representing hospital staff. 

The hospital is asking Kaiser for an annual $5 million grant for the next three years. Moran’s letter to the healthcare provider says WCH would use those funds specifically to stabilize labor and delivery and NICU services, “while the hospital works on other initiatives needed to grow services and improve operating performance.” 

Moran’s announcement at the Oct. 28 meeting received applause from the more than 100 community members in attendance. 

In the letter, Moran mentions the possibility of receiving funding from the state, but notes that the hospital does not know “what level of funding will be approved, so we still must consider some difficult choices.” 

Moran also asked the California Nurses Association to direct union dues paid by Watsonville Community Hospital nurses toward stabilizing maternity services. 

He proposed a three-year commitment. During the first year, 100% of the nurses’ membership dues would be donated, and during the second and third year, 50% of their dues would be donated. 

The request will need to be reviewed by the union itself and likely require approval from Watsonville hospital nurses it represents. 

“By partnering with the hospital on this proposal, CNA can make a meaningful and immediate investment in protecting maternal and newborn care, preserving nursing and hospital services, and supporting the future of community-based care in the Pajaro Valley,” Moran wrote in his letter to the union. 

Moran said he was planning to send the letters to both organizations on Oct. 29. 

There’s some hope in Measure E — if voters approve

Many community members and hospital staff made a point to mention Measure E, a county ballot tax measure intended to raise funding for safety net services, including the hospital. 

If approved by voters, the countywide five-year, half-cent general sales tax increase is expected to generate roughly $27 million annually beginning in the 2027 fiscal year. Measure E is headed toward approval based on the latest vote tally; it’s currently received 59.5% of votes in favor.

County officials intend to use the revenue to help maintain community lifelines, such as health care services, food security initiatives and homelessness prevention, that could be affected by cuts under H.R. 1. 

However, it’s unclear how much money the hospital would receive from the tax measure. Santa Cruz County Executive Officer Nicole Coburn previously told Lookout that the money will be split among services that are facing funding challenges due to changes at the federal level. 

“There are many different competing priorities around the county. A lot in healthcare, and there’s also several for food assistance,” said hospital board chair Tony Nuñez, who will also be stepping into the District 4 county supervisor role in January. 

Nuñez said the Pajaro Valley will be among his priorities as a county supervisor, but he couldn’t speak for his future colleagues or say how they would prioritize hospital funding.

Outgoing hospital board member Marcus Pimentel said he would like to see the county step up and prioritize the hospital, as the Measure E campaign is using medical services imagery, such as hospitals and clinics, to advocate for the temporary tax measure. 

“I wish they would have come to our meeting, any one of our meetings, and tell us in person that they’re committed to prioritizing this,” Pimentel said. “This isn’t about us versus them. It’s just we’re in this together, so we all have to hold each other accountable.” 

Have something to say? Lookout welcomes letters to the editor, within our policies, from readers. Guidelines here.