State Sen. John Laird delivered on a commitment to advance legislation that would begin the process to allow the hospital to remain as the primary, and vital, health care facility for South County residents.
Laird’s Senate Bill 418, co-authored by Assemblymembers Robert Rivas of Salinas and Mark Stone of Scotts Valley as well as Sen. Anna Caballero of Salinas, would allow several key participants to fast track creating a health-care district as part of returning the long-struggling hospital to public ownership after more than two decades of for-profit corporate ownership. The bill received unanimous bipartisan support in a key state Assembly Committee last week and next heads to the full Assembly for approval.
The Pajaro Valley Healthcare District Project – which includes Santa Cruz County, the city of Watsonville, nonprofit Salud Para La Gente and the Community Health Trust of Pajaro Valley – put together a preliminary agreement in December to allow the hospital to continue to operate through a sale.
The push to create a health care district, which would provide local oversight of a renewed Watsonville Community Hospital, gained immediacy in November, after hospital CEO Steven Salyer said the facility could soon close. At that time, he announced the hospital was entering a Chapter 11 bankruptcy reorganization process prior to any sale, and that the Healthcare District Project were viable players in future plans. In early December, it was also announced that enough money had been raised to keep the hospital operating for a few months.
But decision time is looming for the potential sale, which if it doesn’t go through, would mean tens of thousands of people could lose their access to a local hospital, a prospect made even more dire by the COVID-19 pandemic.
SB 418, if passed by the Legislature, will give the health care district project five years to create zones it feels are representative of the community. From there, elections would be held to appoint a leader of each zone to make decisions as a part of the hospital board.
But the bigger request, which is not part of SB 418, is for substantial state funding to support the cost of acquiring the hospital and keeping the doors open for up to 24 months following a purchase. The project, which has not identified an operator for the hospital if the purchase goes through, estimates the state will need to provide between $45 million and $55 million – up to $35 million for the purchase and the rest for transitional operating costs.
In turn, however, the governor’s office wants to see local community financial support come forth as part for the hospital – with this support buying the health district, once formally formed and a future operator named, the time to become solvent.
While the legal and financial maneuvers sound complicated, the end goal is not: Ensuring that Pajaro Valley still has a hospital.
Watsonville Community Hospital is the primary medical facility for a community that is 84% Latino, where about 30% of households earn less than $40,000 a year and about 43% of the hospital’s gross revenues come from the state’s Medi-Cal program for lower income people. The local workforce is made up of a high number of agricultural and other essential workers who have been hit disproportionately hard by COVID-19.
The nearest full-service hospital, Dominican in Santa Cruz, is about 20-50 minutes away, depending on traffic gridlock on Highway 1. Dominican’s emergency room is the only other ER in the county besides Watsonville’s.
Clearly, Watsonville Community Hospital must be saved and returned to public, nonprofit, ownership.
This can only happen if the state, with local contributions, provides both immediate help and financing.
Laird’s SB 418 gets the ball rolling. Next the state should use a small portion of its huge budget surplus to ensure the hospital is purchased locally, and has enough money to continue providing health care for Pajaro Valley residents.