Sonoma (Calif.) Valley Hospital will use the $3.1 million loan it received from the state to pay off its long-term debt, The Sonoma Index Tribune reported Sept. 20.
CFO Benjamin Armfield said the hospital is not at risk of closing, but its long-term debt has been exacerbated by the COVID-19 pandemic and rising interest rates, which he said have more than doubled in the past year. The 75-bed hospital was one of 17 that received no-interest loans as part of California's distressed hospital loan program.
Mr. Armfield said the debt has constrained the hospital's ability to grow, according to the report. The plan is to reduce interest-bearing debt, which should free up some additional capital for strategic initiatives in hopes of further stabilizing the hospital financially.
Initiatives include bringing specialities to the hospital that are currently lacking, including gastroenterology and cardiology, according to the report. Plans also include expanding primary care and geriatric programs.