Hazel Hawkins Memorial Hospital (HHMH) announced it sent Worker Adjustment and Retraining Notification (WARN) Act notices to employees Dec. 19 as required by federal law 60 days prior to a possible closure by a large employer. According to the news release, the notices sent by the hospital specify that Hazel Hawkins and its financial advisors project that it will run out of sufficient cash to continue operations on Feb. 18, 2023.
The news release said Hazel Hawkins is still working steadily to overcome cash flow challenges, including undertaking “an aggressive cost savings plan” seeking private sources of funding, and collaborating with state and local leaders.
According to the release, WARN Act notices can be extended or retracted if Hazel Hawkins is successful in finding funding. Hazel Hawkins has said it needs to come up with $25 million to avoid bankruptcy.
According to the hospital, it had 745 employees and 41 active physicians on staff in 2021. It reported that last year it had 23,594 emergency department visits; 2,319 hospital admissions; 42,981 outpatient visits; 83,679 clinic visits; and 439 infant deliveries.
“With the San Benito County Board of Supervisors voting down HHMH’s request for $10 million in bridge funding to enable a sufficient restructuring period, the possibility of closure of the hospital and its related services is more likely,” the release said.
On Dec. 15, supervisors approved advancing about $1.1 million due the hospital from property taxes. County Treasurer and Tax Collector Melinda Casillas told BenitoLink the hospital each year receives 50% in December and about 45% in April or May. The April payment was advanced with an interest fee. The hospital requested a much larger loan of $10 million from the county but supervisors were concerned about the impact it would have on an already cash-strapped county. Supervisor Bea Gonzales told BenitoLink San Benito County has $23 million in reserve, but the county is struggling to keep current operations funded.
- Roads: As of 2021, the county needed to invest an additional $12.2 million per year to maintain the roads’ current conditions rated at a 37/100 in the Pavement Condition Index (PCI).
- Library expansion: It was constructed in 1960. Based on the industry standard of one square foot per capita, the current library is equipped to service 7,000 out of the 66,000 county residents.
- Staffing/ Law enforcement: According to the 2022 Grand Jury report, the county has historically served as a training ground for employees who find jobs in nearby counties with better pay. The Sheriff’s Department said in the report that it is facing staff shortages and challenges in attracting qualified candidates. Sheriff Eric Taylor warned supervisors his staff levels are “critically low” and that the county has operated with minimal staffing levels since 2010.
“We offer many vital health services San Benito County relies upon and are aggressively seeking bridge funding options to maintain those services as we look for a long-term strategic partner,” said interim CEO, Mary Casillas. “With everyone’s support, and with critical improvements on our end, we still believe that we can find a partner that will enable HHMH to remain viable and continue providing top-quality health care services to our community.”
The release said in addition to the funding request to county supervisors, Hazel Hawkins also requested a $3 million loan from the California State Treasurer’s California Health Facilities Financing Authority program, which is still pending with the state.
“Collectively, these infusions would help with cash flow over the next few months,” the release said and it added it remains focused on an “aggressive” cost savings plan that includes a hiring freeze, strategic review of staff positions, and supply reviews and billing audits.
The release said some staff are taking a temporary reduction in wages on a voluntary basis.
“These changes will extend HHMH’s ability to operate in the short term, but the most likely source of long-term stabilization for HHMH will be a strategic partnership,” the release said. “HHMH and its restructuring professionals project that a process to locate a strategic partner will take at least five months, which is only feasible with a combination of outside funding along with HHMH’s internal cost-cutting and revenue-enhancing measures.”
The U.S Department of Labor has a WARN Act worker’s guide here. According to the department’s website, the guide provides a brief overview of the WARN Act provisions and it includes answers to frequently asked questions about employee rights.
The release said Hazel Hawkins continues to deliver patient care at all of its locations, and the Emergency Department is open for emergency care. For information directly from Hazel Hawkins Memorial Hospital, residents may visit www.hazelhawkins.com.