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Editor’s note: This article was revised at 6pm to include updated information on Sutter Health’s declining to pursue a partnership with Hazel Hawkins.
Two days after BenitoLink confirmed Sutter Health’s interest in Hazel Hawkins, the major health provider in the state took a step back, saying it doesn’t plan to pursue a potential partnership. The hospital spokesman on Feb. 10 said they had received a letter on Feb. 5 in which Sutter expressed interest, but had questions about the letter’s authenticity.
Spokesperson Marcus Young sent BenitoLink an email on Feb. 13 saying Sutter had withdrawn its expression of interest. The email included a paragraph attributed to Sutter Health:
“As all health systems do, it is part of our normal course of business to explore opportunities and have conversations with other health systems across Northern California. We were never in any active discussions, are not planning any and understand Hazel Hawkins Memorial Hospital has a solution underway that works for the community.”
The statement is very similar to a comment provided to BenitoLink on Feb. 11, which reads: “As all health systems do, it is part of our normal course of business to explore opportunities and have conversations with other organizations across our footprint and beyond. We have a lot of respect for Hazel Hawkins Memorial Hospital and for many other health care organizations, but are not part of any formal process at this time.”
The San Benito Health Care District, which governs Hazel Hawkins Memorial Hospital, said it met with Sutter to discuss their interest.
“After this meeting, the district was informed that Sutter wasn’t interested in pursuing further discussions,” the district said in a statement. “In the meantime, negotiations with Insight remain ongoing as we work toward final agreements.”
The article published earlier on Feb. 13 is below.
Sutter Health, a major health care provider in California, has notified the San Benito Health Care District board of directors of its interest in Hazel Hawkins Memorial Hospital.
According to a letter obtained by BenitoLink dated Feb. 3 and addressed to the directors, Sutter is requesting to engage “in a parallel process of due diligence and discussions” with the district.
“As all health systems do, it is part of our normal course of business to explore opportunities and have conversations with other organizations across our footprint and beyond,” a Sutter Health spokesperson told BenitoLink. “We have a lot of respect for Hazel Hawkins Memorial Hospital and for many other health care organizations, but are not part of any formal process at this time.”
The San Benito Health Care District, which governs Hazel Hawkins, received four letters of intent since 2023 from parties interested in buying or managing the hospital. A letter of intent is a formal, nonbinding agreement between two parties. The district has opted to pursue a lease/purchase option with the Michigan-based Insight Health Systems.
The district declared a fiscal emergency in 2022 and filed for bankruptcy. The case is being reviewed by the appellate court after a bankruptcy judge dismissed the case in 2024.
To pursue a deal with Insight, the district obtained voter approval in November through Measure X. Months before the vote, the district was in negotiations with Insight on definitive terms. Hazel Hawkins CEO Mary Casillas said at a Jan. 23 meeting that the negotiations were ongoing.
Sutter Health is a Sacramento-based nonprofit organization with 21 hospitals in Northern California and the Central Valley. It also has 11 medical groups that offer services in various specialties, and serves 3.5 million people annually.
Hospital district disputes Sutter letter’s authenticity
The health care district, however, questioned whether the letter from Sutter is authentic before it got confirmation from Sutter Feb. 11. At the time, Spokesperson Marcus Young said he could not comment on the letter as the district was still awaiting confirmation from Sutter. He said the validity of the letter was questionable because the letter did not have a letterhead and had several misspellings.
BenitoLink spoke to San Benito Health Care District Director Bill Johnson before receiving confirmation from Sutter about the authenticity of the letter and he also questioned the timing of Sutter’s interest.
After hearing that BenitoLink received confirmation from Sutter, Johnson still questioned the timing.
“Where were they a year ago?” he asked. “It would have made things easier.”
Young said Sutter Health was among the 100 entities the district reached out to in its efforts to find a partner. He said he could not provide a list of institutions that the district reached out to because that information is proprietary.
Johnson said he was curious as to the next steps but cautioned there was nothing concrete.
“Right now it’s just an idea floating,” he said.
The district has touted Insight as the most appropriate potential buyer that can turn the hospital around despite some residents questioning their experience running hospitals. Critics of the deal also question the organization’s financial capabilities, noting its Chicago hospital lost $57.9 million in the first three years of Insight’s management. Insight’s practices were also a focus of a damning American Prospect magazine report, which accused the organization of fraud.
Insight denied the allegations in the American Prospect article. A spokesman who asked that their name not be used later told BenitoLink: “Insight follows all applicable laws and policies. One of our core values is to be ethical in all of our work and our primary motivation is to provide patient care second to none.”
According to Sutter Health’s 2023 audited financials, Sutter made $320 million in operating income and more thanr $1.1 billion in net income.
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