Roseville, Calif.-based Adventist Health and Mendocino Coast Health Care District are making "steady progress" on optimizing the existing agreement to provide care at the district's hospital in Fort Bragg, Calif., according to an Oct. 17 joint statement.
The district initially sought a hospital operator when financial troubles threatened care delivery at the facility. Adventist, the only organization to submit a proposal, signed a 30-year lease agreement on July 1, 2020.
The agreement allows either party to negotiate terms of the lease under certain conditions. Adventist elected to renegotiate because the hospital has reported less than 5% EBITDA for the previous 12-month period, according to The Mendocino Beacon. A healthy EBITDA margin is generally between 10% and 25%.
Both organizations said they share a "mutual goal" to retain Adventist as the hospital's operator.
"As the costs for providing healthcare continue to soar, tapping into existing government reimbursements will be important for both entities," according to the joint statement. "Despite one third of all critical access hospitals across California not being able to break even, we believe there is a path forward for Adventist Health Mendocino Coast."
Over the next month and a half, they will work to finalize details of an updated partnership, which would mean changes to the existing agreement.
Adventist Health and the district will continue working together on the details of an updated partnership which would result in changes to the existing agreement.
"I appreciate the passion and dedication our friends at the district have for our local community hospital," Eric Stevens, president of Adventist's Northern California network, said. "The community can be confident that both organizations are reaffirming our investment in helping keep healthcare local through a sustainable model."