At the end of August, a bankruptcy judge will likely OK the sale of the money-losing hospital to a public district, run by a board to be elected over time. Just as that big change moves forward, all of the hospital’s 247 nurses have been told to “rebid” their jobs. Most part-time jobs are going away, and nurses say the impact on daily staffing — and patient care — could be substantial.
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The ambitious effort to buy and take over the long-embattled Watsonville Community Hospital is almost complete. As that phase of the monthslong initiative ends, a new one begins, posing big questions: How will the board of a new, publicly owned facility make major decisions about the hospital, its staffing, its funding and even the ownership of the land on which it sits? How will those decisions affect patient care in the months and years ahead?
Those questions now move center stage as increasingly contentious meetings display the difficulty of the decisions that lie ahead.
Ahead of an Aug. 31 bankruptcy court deadline to approve the sale of the hospital, the nonprofit Pajaro Valley Healthcare District Project stands about $5.6 million short of raising $67 million to purchase the hospital, according to County of Santa Cruz spokesperson Jason Hoppin. A spirited South County group has been relentlessly raising money by the deadline.
The hope: to finish the fundraising and move forward and get the hospital out of its operating losses, which now number more than $20 million a year, after over two decades of private ownership and 20 different CEOs.
The new Pajaro Valley Health Care District board, which was formed in March, will see two of its now-five appointed member seats up for election on the November ballot. As the board aims for financial stability, it immediately confronts numerous challenges.
Those include the relationship between the Community Health Trust of Pajaro Valley, a 24-year-old Pajaro Valley nonprofit health care foundation, and the new hospital district, and the ownership of the land the hospital sits on. One of the biggest challenges, though, which will affect the services the hospital will provide to its surrounding community, is staffing.
“I’m one of the nurses you risk losing,” Louise Pearse, who’s been a registered nurse at the hospital for 16 years, told the new board at its Aug. 4 meeting. She’s currently part-time and works in the critical care unit. She was one of more than a dozen nurses who decried the new staffing plans they’d heard about in the changeover.
Staffing has been a major concern of the hospital’s nurses for years. Demonstrations in 2020 highlighted those concerns publicly.
“We’re overwhelmed, and what we want is a better solution for those gaps in our staffing,” one nurse says. Hospital...
Further, those nurses raised what could be alarming issues about the impacts on patient care as the hospital makes its new staffing plans, causing “potential damage to the future viability of the community public hospital,” in the words of one nurse.
The nurses union says that the hospital’s senior management and human resources officials have told it that post-sale, part-time nursing positions will be reduced from 112 to 18. That change, they say, will cause a significant number of the 247 nurses to seek employment elsewhere, because moving to full-time positions won’t be viable for many of them.
In response to the staffing changes, the nurses decided to take their complaint to the Aug. 4 meeting of the newly formed public representative board, which found itself on the hot seat for much of the three-hour event. In advance of the meeting, board members had already begun receiving email complaints about the change in staffing.
The tension during the three-hour meeting, which involved 71 Zoom attendees, was palpable. Nurses called the process to reapply to jobs “abominable” and a mistake.
What’s behind that staffing change?
Clearly, the hospital’s new board sees that it faces a financial pinch, and maybe an immediate one, as a bankruptcy judge moves to approve the sale to the new district at the end of the month.
Until the point of the actual sale, the senior administrators continue to manage the hospital, setting policy and staffing. So it is that management that has moved forward with the staffing change, raising questions about its decision.
Lookout wanted to better understand the transition process, who is responsible for making staffing decisions, how the restaffing decisions were made and the roles of management and the newly appointed board, and reached out broadly last week.
We attempted to contact hospital CEO Steven Salyer, hospital outreach director June Ponce, each of the five district board members and the new district’s counsel, County of Santa Cruz Counsel Jason Heath.
“I think when you look at the proposal — we can’t deny that it’s going to affect some of our nurses. We can’t say that it’s not, but I think that what we have to keep in mind is that we’re trying to save the hospital,” said Tony Nuñez, one of only two of the board members to comment.
“These are really difficult decisions to be made,” he added. “I think at the end of the day, we have to look at, what is best for the entire community? What is best for the Pajaro Valley, what’s best for Watsonville? What’s best for Santa Cruz County?”
The district board began receiving emails from nurses as soon as the union received the news about the reduction in part-time positions — a week before the Aug. 4 meeting. Nuñez said he responded to as many of them as he could ahead of the meeting.
At the meeting, the nurses reiterated what they said in the emails — and emphasized that the decision would have a detrimental impact on patient care, among other concerns.
In response to the potential impacts on patient care, Nuñez said he thought the nurses were in the right to bring that up as a “possible concern.”
“We definitely hear them, we hear those concerns. And really, we’re trying to weigh everything — trying to weigh the impact that every decision is going to have,” he said. “I think that, like I said, these are really difficult decisions. We definitely heard that and and we’ve taken that into consideration.”
He added that some discussions around this concern have happened in closed session, and are confidential, a response he offered to several related questions.
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While the public will expect greater transparency as a new government entity takes over the hospital, Nunez notes that the new board finds itself in a difficult position. The board has begun to hold meetings, but doesn’t yet own or manage the hospital.
“That’s the issue — all of the communications that we have had, with literally everyone inside the hospital, with all of the previous entities that were under contract to the hospital, whether that be physicians or insurance — we are not even at arm’s length with those folks,” he said. “I think that this is really confusing for a lot of people, because this is going to be — this is a public entity, and it’s a government entity at the end of the day. We’re not there yet.”
The health district board has yet to even set a strategic plan for the hospital, he said, adding that it is just setting a base.
The culmination of this domino effect of forcing part-time to go full-time would be a potential damage to the future viability of the community public hospital.
— Quiché Rubalcava, longtime Watsonville Community Hospital nurse
Transparency for all members of the board is crucial, and it’s something Nuñez understands well as an editor for The Pajaronian newspaper.
“It’s been difficult to be on this side of it,” he said. “But I think I’ve tried really hard to have this process to be as public as possible … I want as much public input as possible on this.”
Addressing questions about his dual roles as a local newspaper editor and board member, Nuñez added that he is not writing or editing any stories related to the hospital — just one of the primary ways he and his bosses hope he can avoid any conflicts.
“They’ve assigned reporters to cover and to write about the health care district and to cover meetings,” he said. “And I think that they’ve done a good job of responding to some of the issues. I didn’t know that they were going to be covering last Thursday’s meeting, for instance.”
Marcus Pimentel, the other board member who spoke to Lookout, also cited the financial pressures that are leading to the staffing changes.
“What we’re talking about now is reducing some of the part-time positions and not all of them,” he said. “Reducing some of the part-time to find employees who can work more hours — that reduces our need to hire out-of-state traveling nurses to fly in and attend to our patients in our community.”
The hospital’s management did not return a request for comment. Board member Dr. Katherine Gabriel-Cox told Lookout she wasn’t able to comment at this time, and we did not receive returned messages from either of the other two board members, John Friel and Jasmine Nájera.
Nurses against rebid process
Roseann Farris, the chief nurse representative for the nurses union, told Lookout last week that the nurses were told by the hospital’s senior management in early August that nurses would need to “rebid” for their jobs, and that they would be exclusively full-time positions. She then said that at a later meeting, management clarified that a few part-time positions would be offered.
“This is like a slap in the face. It makes us feel like we’re expendable,” said Farris. “It’s very personal.”
On Wednesday, said Farris, nurses will formally rebid; they face a Friday deadline to accept letters to have an effective date of employment by Sept. 1. Based on level of seniority, the nurses will rebid for the positions.
The local nonprofit tasked with raising money to purchase Watsonville Community Hospital is about to receive $25 million...
Given the concerns about the rebid process, the nurses union and individual nurses went to the Aug. 4 board meeting. At the meeting, nurses said this decision erodes trust, puts the health of nurses at risk and will lead many nurses to seek jobs elsewhere.
Currently, of the hospital’s 247 nurses, 112 are part-time, 79 are full-time and 56 are per diem — per diem meaning they are essentially on call, said Farris.
Farris said hospital management is now offering 18 part-time positions. Those jobs, along with 179 full-time positions, plus more than 50 per diem nurses, would constitute its staffing. At this point, it is hard to compare the impact on care of the new staffing as compared with the current staffing.
The nurses gave examples of the potential impacts.
Some hospital units are staffed by primarily part-time nurses, said Farris. In the critical care unit, for example, all but one of the nurses are currently part-time. She said it appears that only one part-time position will be offered there.
Quiché Rubalcava, a 19-year nurse employee of the hospital, spoke against the plan at the meeting. The hospital could suffer “potential permanent damage” by moving forward with the rebid process, he said, emphasizing that he expected “deteriorating patient care conditions” and increasing sick calls, workplace injuries and medical errors.
“The culmination of this domino effect of forcing part-time to go full-time would be a potential damage to the future viability of the community public hospital,” Rubalcava concluded.
What’s driving the new staffing plan?
Cecilia Montalvo is a consultant hired by the new Pajaro Valley Health Care District board to help in its transition.
Montalvo, who had a role in the new staffing plan, made similar arguments to board member Nuñez.
“It pains me. I’ve listened to the comments tonight. I’ve met many of you,” she said at the meeting. “I know how hardworking the employees of this hospital are and how much they have done to make this possible.”
The staffing plan, she said, is driven by the stark reality of the hospital’s finances. The hospital showed a $22 million loss in the fiscal year before the bankruptcy and is expected to lose another $23 million in the current fiscal year. Part of the current fiscal year losses are due to costs of the bankruptcy process.
Eliminating part-time positions reduces expenses. In part, the move to far fewer part-time positions will reduce travel nurse costs, Montalvo said at the meeting. The hospital spent $7 million on travel nurses last year, she said, and, at this point, would project another $12 million in such spending in the coming year.
Adds board member Pimentel, “In the end, none of this is about changing compensation or benefits or eliminating jobs. It’s about trying to find opportunities where we can increase some of our shift schedule so we’re less reliant on out-of-state or region travel nurses.”
That’s the financial conundrum the new public board increasingly faces.
Watsonville Community Hospital’s continuing operation is highly meaningful for Santa Cruz County. The 127-year-old hospital, where 800 babies are born each year, employs more than 600 people, of whom 247 are nurses. The stakes of the whole bankruptcy/public purchase process are high: If the purchase were to be ultimately unsuccessful and the hospital were to close, the county would have only one emergency department, at Santa Cruz-based Dominican Hospital, among many other impacts.
Assuming the sale does proceed, which appears likely, the reality of public ownership now meets real operational questions — and all the decisions that will have to be made are coming to the surface.