Watsonville Community Hospital
(Kevin Painchaud / Lookout Santa Cruz)
COVID 2022

Trying to avoid countywide ‘shockwaves’: Local task force works at keeping Watsonville Hospital open

Watsonville Community Hospital CEO Steven Salyer announced to employees earlier this month that the hospital could have to close unless someone purchases it. A nonprofit coalition has been in discussions with the hospital to buy it, but one of its members says there are several steps complicating the purchase.

After years of financial uncertainty, which its leaders say was exacerbated by the pandemic, Watsonville Community Hospital may have to close unless someone purchases it — something that would make Dominican Hospital the only facility in the county with an emergency room.

However, the hospital is currently in discussions with a coalition of governmental bodies and health care nonprofits to keep the doors open. And on Tuesday, a newly formed emergency task force made up of about 20 local officials held their first of what is expected to be weekly meetings about the hospital’s future, said Dr. David Ghilarducci, the county’s deputy health officer.

“We have a lot of work to do,” he said.

Ghilarducci said while he is optimistic the hospital will not close, the potential it could happen is worrisome for a variety of reasons: patients would need to be transferred to a different hospital, employees would be without work and the large number of people that receive services from the hospital would have to go elsewhere. For example, he said, the hospital has 800 births a year.

The task force is focusing on preventing the closure and planning in the event it does.

The additional burden it would put on Dominican’s ER would quickly push that facility to capacity.

Santa Cruz County Board Supervisor Manu Koenig said the closure of the hospital would “send shockwaves through the county.”

“The additional burden it would put on Dominican’s ER would quickly push that facility to capacity. That means even my constituents in mid-county could have to go to ERs in Santa Clara or Monterey,” he wrote in an email to Lookout, adding that for that reason, the board supports the health care district.

Watsonville Community Hospital CEO Steven Salyer, who took on the role this summer, said while the hospital has tried to come up with solutions, it has been unable to do so.

“As you know, the hospital faces many financial challenges,” he wrote in a letter to employees Nov. 23. “COVID-19 resulted in a further decline in revenue, and it has been difficult to recover.”

Currently, Alabama-based Medical Properties Trust owns the land and the buildings of the hospital, but the hospital has been managed by a Los Angeles-based firm, Prospect Medical Holdings, since January. The hospital holds 106 beds and employs more than 620 employees and 200 physicians, according to its website.

Nurses express themselves on Friday outside Watsonville Community Hospital.
(Haneen Zain / Lookout Santa Cruz)

More than 60 of those employees, represented by California Nurses Association, held an informational picket last month denouncing what they said are dangerous short staffing and worsening patient care.

In response, hospital authorities said at the time they had been offering sign-on bonuses to new employees and cash bonuses to part-time employees who switch to full-time. It also noted there is a nationwide nursing shortage “affecting virtually every hospital across the country.”

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Governmental, nonprofit groups working on purchase

A coalition made up of the county of Santa Cruz, the city of Watsonville, Salud Para La Gente and the Community Health Trust of Pajaro Valley has been in discussions with the hospital to purchase it, according to member Mimi Hall.

Hall, formerly the county’s Health Services Agency director, said the coalition incorporated as a nonprofit this summer under the name Pajaro Valley Healthcare District Project. The project is in the process of formalizing as an official health care district — which is typically established by voters and advocates for the health of residents like a water district does for a community’s water needs.

However, Hall hopes to expedite the process by seeking establishment through the passage of a bill. The district project members are currently looking for a sponsor in the legislature.

California has 77 health care districts and the Pajaro Valley Healthcare District, if formed, would be the first in Santa Cruz County. The Salinas Valley Memorial Healthcare System is a hospital within the health care district model, according to Hall.

Hall and Salyer said they hope they can reach an agreement to prevent the hospital from closing. The county Board of Supervisors committed to allocating $500,000 toward the purchase and the city of Watsonville passed a resolution supporting the district project.

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Hall added that the group will also be requesting help from the governor’s office or via the state budget process for the money to buy the hospital. She said it’s not clear how much they’ll be requesting but the members have meetings this week to discuss that topic.

In his letter, Salyer said the sale would likely occur through a Chapter 11 bankruptcy reorganization process. And, he requested that any buyer rehire all the employees. The CEO wrote that he hopes the bankruptcy court will approve a sale by February or March in 2022.

“There is, however, the chance that we will not be able to conclude a sale,” he wrote. “We don’t want that to happen, but if it does, we will have to suspend operations.”

When reached for comment, Salyer said he could provide no further information beyond what was written in the Nov. 23 letter.