Watsonville (Calif.) Community Hospital has about eight days of cash on hand and faces “a serious financial gap” that could close the hospital within six to 12 months without action, according to an Oct. 15 news release shared with Becker’s.
The Pajaro Valley Health Care District will also host an Oct. 22 town hall to discuss possible service reductions under consideration at the hospital.
“We have to live within our means to keep our doors open,” Watsonville Community Hospital Interim CEO Tim Moran said in the release. “We want the community to hear directly from us about the challenges we face and what we propose to do about them. We also want to hear from you about what matters most.”
In early October, Watsonville Community Hospital CFO Julie Peterson told Becker’s the hospital expected to meet October payroll obligations, but its August board executive summary warned of challenges in forecasting how it will meet future payroll and payable obligations.
Mr. Moran also said in a Sept. 22 board meeting that the hospital might not be able to sustain operations beyond the next six to 12 months without financial changes. It is also facing a daily cash shortfall of $85,000.
During the town hall, hospital leaders will detail factors driving possible service reductions and why the matter is urgent. Attendees will also have an opportunity to provide feedback and take part in small group discussions following a short presentation.
Hospital leaders said one-time funding and loans cannot close the gap and that lasting change is needed to cover cost of care. The hospital is also actively pursuing growth initiatives and partnerships, but these initiatives will not benefit the facility for months, according to the Oct. 15 news release.
“For four years, the hospital has worked with partners and the state to secure a long-term solution, but those efforts have not produced a commitment to structural change,” the release said. “The hospital remains open to exploring partnerships and welcomes conversations with any potential partner who can present a sustainable solution to address its financial challenges and preserve access to local healthcare, but it cannot risk losing the whole hospital while it waits. Looming state and federal policy changes are expected to reduce the hospital’s revenue further.”
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