San Benito Health Care District, the board overseeing Hollister, Calif.-based Hazel Hawkins Memorial Hospital, voted May 22 to file for Chapter 9 bankruptcy, a move coming a little more than six months after the board declared a fiscal emergency. It's a decision officials said will keep the hospital open as it continues to search for a partner or buyer.
Here is a timeline of officials' efforts to keep the hospital in operation:
Nov. 4, 2022: The San Benito Health Care District board of directors granted a resolution declaring a fiscal emergency. Hazel Hawkins Memorial Hospital CFO Mark Robinson attributed the financial troubles to several factors, including high inflation, reduced reimbursement from Medicare and Anthem Blue Cross, as well as the lingering effects from the COVID-19 pandemic.
Nov. 29, 2022: Hazel Hawkins officials said they are pursuing multiple angles to resolve its fiscal emergency. The hospital's outreach efforts included discussions with the San Benito County supervisors, state assembly members' and state senators' offices and the California state treasurer's office. The hospital also had advocacy meetings with the Association of California Healthcare Districts and California Hospital Association.
Dec. 12, 2022: Hospital officials asked local and state leaders for $13 million in "bridge funding" to give it "sufficient time to implement a restructuring plan."
Dec. 16, 2022: San Benito County supervisors rejected Hazel Hawkins' request for a $10 million loan but did advance its $2.2 million property tax refund.
Dec. 19, 2022: Hazel Hawkins issued a Worker Adjustment and Retraining Notification Act notice to employees in case of a potential closure if it cannot acquire funding.
Jan. 6, 2023: Hazel Hawkins announced it is closing its home health service department, effective Jan. 31. Interim CEO Mary Casillas said the department, known as San Benito Home Health Agency, had "consistently declining volumes." She said there are duplicate services within the community that will be able provide needed services to its patients.
Jan. 12, 2023: Hazel Hawkins received a $3 million loan from the California Health Facilities Financing Authority that extended the estimated time it will run out of funds to mid-March. Prior to receiving the loan, the hospital estimated that it would run out of funds on Feb. 18.
Feb. 2, 2023: Ms. Casillas said the hospital is seeking a buyer or partnership to stabilize its finances. She said a strategic partnership is the most likely source of long-term stabilization. She said the hospital "cannot continue as a stand-alone service provider and successfully compete with larger, regional health care providers."
Feb. 6, 2023: BenitoLink reports that Hazel Hawkins signed a nondisclosure with an unnamed healthcare organization. If a transition were to move forward, a sale would take six to nine months, a hospital spokesperson told the news outlet.
Feb. 17, 2023: Seth Freeman, managing director of B. Riley Advisory Services, a national firm hired to help turn around the hospital, said the San Benito Health Care District contacted more than 100 organizations nationwide and has identified "seven motivated and well-qualified potential partners."
March 9, 2023: Attributing it to a "herculean" team effort, Ms. Casillas said the hospital has enough funds to operate through late summer. The improved timeline is the result of cost savings, as well as negotiations with Medi-Cal, Medicare and Anthem that have resulted in a "better-than-expected cash position leading into the second quarter of 2023."
March 21, 2023: Hazel Hawkins withdraws its WARN notice after improving its financial situation.
April 19, 2023: Hazel Hawkins, along with the San Benito Health Care District, said a confidential stakeholder mediation process it entered with stakeholders in February has concluded, but the results "failed to resolve several critical issues" affecting the cash-strapped hospital. Officials said they are continuing to search for a potential transaction partner.
April 27, 2023: The San Benito Health Care District board of directors approved a resolution allowing the district to obtain a $10 million line of credit from an unnamed lender. The board hopes not to have to dip into the funds. A consulting firm hired by the hospital said that the credit line might not be enough to save the hospital, however.
May 22, 2023: The San Benito Health Care District board of directors voted to file for Chapter 9 bankruptcy, which hospital officials said will pave the way to "tackle the systemic challenges it continues to face." Hazel Hawkins will remain open and "fully committed to delivering quality patient care for the greater community while leadership looks for a strategic partner or buyer."