Editor’s Note: BenitoLink reached out to Hazel Hawkins Memorial Hospital, The Nurses’ Union, Assemblymember Robert Rivas and State Senator Anna Caballero for comment but have not received a reply. BenitoLink will edit article if they respond.
According to a recent California Hospital Financial Impact Report, one in five California hospitals is at risk of closure. The report makes clear that Hazel Hawkins Memorial Hospital is one of many in the state struggling to continue serving its community.
“Hospitals have faced a perfect storm of COVID-related losses, crippling inflation and systemic underfunding by government payers—Medi-Cal and Medicare,” the report stated. “Collectively, these hospitals care for millions of Californians a year.”
Commissioned by the California Hospital Association (CHA) and released this week, the report says that unlike other service industries such as restaurants, airlines and grocery stores, hospitals, including Hazel Hawkins, were unable to raise their rates to cover increased costs.
The report highlights four findings:
- Twenty percent, or one in five California hospitals are at risk of closure.
- Fifty-two percent or about 200 of the 400 California hospitals are losing money every day to care for patients they are treating. The report claims the challenges are systemic underfunding by government payers—both Medi-Cal at the state level and Medicare at the federal level. It adds that hospitals are getting paid about 75 cents for every dollar of care and calls the situation “untenable.”
- In 2022, it cost $23.4 billion more to provide hospital care in California compared to pre-pandemic levels.
- Absorbing an $8.5 billion loss on top of the $12 billion in losses over the prior two years. This is the third year of losses for California hospitals, totalling over $20 billion.
As San Benito County’s only hospital, Hazel Hawkins declared a fiscal emergency in November 2022 and announced in March it has operating funds through “late summer.”
According to a news release dated April 12, “This is precisely why care for millions is at risk as hospitals face difficult decisions about whether to shutter services like maternity care just to keep the lights on or consider bankruptcy and outright closure. In addition to the massive inflationary increases, hospitals also sustained $8.5 billion in losses last year, on top of the $12 billion in losses (even after federal relief) during the pandemic. There’s no way to balance this budget.”
On Sept. 30, 2022, Hazel Hawkins’ Chief Financial Officer Mark Robinson said three factors led the hospital into financial crisis一returning over $12 million to the state this fiscal year, the Anthem Blue Cross reimbursement dispute and the delayed supplemental payments totaling $13 million to the hospital from the state. The hospital reached a new agreement with Anthem Blue Cross in December but did not reveal any details. BenitoLink submitted a public records request in January for a copy of the two contracts but has not yet received them.
“Hospitals were able to weather the initial stages of the pandemic, but their situation has deteriorated quickly,” said Erik Swanson, who leads the consulting firm that conducted the report Kaufman Hall’s Data and Analytics group. “The risk of hospital closures in California is the highest it has been since the pandemic began.”
During an April 12 teleconference, Carmela Coyal, CHA’s president and CEO, said the association wanted to share new and difficult information about California’s health care system.
“It’s information that really should be of concern to everyone in this state,” she said. “California’s health care system is really facing its greatest crisis in generations.
“Services are being lost all at once,” she said, pointing to what happened when the Madera hospital suddenly closed. “Its closure at the very beginning of this year means that we have 150,000 people in that county without immediate access to care. They have to now go some 30 miles away to Fresno. But of course we have to remember all of those for whom traveling 30 miles away is simply not possible and that means healthcare services that are deferred and not received.”
She said health care leaders are calling on Gov. Gavin Newsom and the state legislature to act before it’s too late.
“The clock is ticking each and every day,” she continued, “as the state moves towards conclusion of the budget process in early June, but every single day that passes without action is a day that more and more hospitals in the state are taking the next step toward the edge of their survivability and toward the edge of access to care for their communities.”
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