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Hospital Closures, Cuts in Services Loom for Some Communities. How the State May Step in to Help.

Five months after declaring a fiscal emergency and predicting that they’d run out of funds by early this year, officials at San Benito County’s only hospital said they have secured enough cash to get through the summer. At least for now, residents there won’t lose their local hospital.

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Legislative proposals on the table include a bill that would offer emergency loans for hospitals facing closure or those trying to reopen. A second bill involves Medi-Cal, the health insurance program for low-income people. It proposes funneling more money to hospitals by boosting Medi-Cal payments to providers by reinstating a tax on health insurance plans.
Legislative proposals on the table include a bill that would offer emergency loans for hospitals facing closure or those trying to reopen. A second bill involves Medi-Cal, the health insurance program for low-income people. It proposes funneling more money to hospitals by boosting Medi-Cal payments to providers by reinstating a tax on health insurance plans.

By Ana B. Ibarra
CalMatters

Five months after declaring a fiscal emergency and predicting that they’d run out of funds by early this year, officials at San Benito County’s only hospital said they have secured enough cash to get through the summer. At least for now, residents there won’t lose their local hospital.

But a short-term infusion of cash only buys Hazel Hawkins Memorial Hospital a little time. The end goal, hospital administrators say, is to find a buyer that will take over and not only keep the hospital solvent but, ideally, expand services in the area.

Hazel Hawkins, in Hollister, is one of a handful of hospitals statewide facing financial troubles. While some of these hospitals have encountered financial difficulties in the past, the closure of Madera Community Hospital, which shut down completely at the start of this year and filed for bankruptcy in March, has prompted a new cry for help. Now a group of legislators are brainstorming ways to support struggling hospitals and keep them from shutting down or cutting services.

Legislative proposals on the table include a bill that would offer emergency loans for hospitals facing closure or those trying to reopen. A second bill involves Medi-Cal, the health insurance program for low-income people. It proposes funneling more money to hospitals by boosting Medi-Cal payments to providers by reinstating a tax on health insurance plans.

In California, six rural hospitals are at heightened risk of closing, according to the Center for Healthcare Quality and Payment Reform. The center does not release the names of at-risk hospitals because a hospital’s situation can change quicker than data may reflect, said Harold Miller, the center’s president. The California Hospital Association said a few hospitals in metro areas are also struggling, but the organization has not publicly named every hospital it deems at risk, noting that when a hospital announces its perilous financial situation it can prematurely begin to lose workers and patients.

Among hospitals that have publicly talked about their troubles or attributed reductions in services and staff to their finances: Hazel Hawkins and Mad River Community Hospital in Arcata have both suspended their home health services programs; Kaweah Health Medical Center in Visalia has laid off at least 130 employees; El Centro Regional Medical Center in Imperial County cut its maternity ward, forcing local families to travel about 25 minutes to the only other hospital in the county.

Most recently, in mid-March, Beverly Hospital, a 202-bed hospital in Montebello, said that in June it will suspend its maternity, pediatric and outpatient radiology services. In a January letter to the state attorney general, the hospital noted its “dire financial circumstances” and said it would be canceling its plans to affiliate with the health care system Adventist Health because “Beverly Hospital does not have the resources to remain operational during the pendency of the attorney general review.” Under state law, the attorney general must approve the sale of nonprofit hospitals.

The California Hospital Association is asking for $1.5 billion from the state for struggling hospitals, and its request is being supported by a bipartisan group of lawmakers. But even supporters acknowledge this is a challenging request when the state is projecting a budget deficit.

Health economists interviewed by CalMatters said state help should be targeted so that any financial aid goes to hospitals in actual need.

“Most of the hospitals in California are in big systems and those systems have financial resources to get their members through. But there are a few that genuinely appear to be at risk if this cost surge continues,” said Glenn Melnick, a health economist at the University of Southern California. “The question is: Does the government want to have a facility that could get them (hospitals) through this rough patch? What you don’t want is to hand out a billion and half dollars to hospitals that may not need it.”

Providing aid to hospitals in trouble is warranted and different from helping other types of businesses because the goal is to protect patients, said Chris Whaley, a health economist with RAND Corp., a think tank.

“When businesses go out of business, even if it is no fault of their own, we accept that as part of capitalism, but in health care, if a hospital goes out of business that usually means a vulnerable patient population has lost access to care,” he said.

Saving Hollister’s hospital

Hospitals have largely blamed the pandemic for their financial troubles. They’re still recovering from increased expenses related to labor, drugs, and medical supplies needed to respond to COVID-19. Struggling hospitals that have spoken about their circumstances have a couple of common threads: They are independent, meaning they don’t have the financial backing of a well-endowed health system, and at least a third of their patients are low-income and insured through Medi-Cal.

Some hospitals face additional pressures. For example, despite its increased expenses, Hazel Hawkins, a 25-bed hospital, posted earnings of $2.6 million in the fiscal year that ended in June of 2022, according to state financial documents. Then in July it learned that it was being overpaid by Medicare, the federal insurance program for seniors and people with disabilities, said Mary Casillas, Hazel Hawkins’ interim CEO. The hospital is now on the hook to repay more than $5 million to Medicare. That’s on top of a 20% decrease in its adjusted Medicare reimbursement, she said. By December, employees had received notices of a potential closure.

Earlier this year, the hospital secured a $3 million state loan, received an advancement in property tax dollars it receives from the county and has been working to reduce its operational costs. That, among other efforts, will help the hospital stay afloat at least until September and give it time to find a buyer, Casillas said. She said her hospital has been approached by at least 10 interested parties that are currently reviewing Hazel Hawkins’ situation.

“We have bankruptcy professionals, as well as financial advisors, who have been very helpful at helping us manage our cash flow,” Casillas said.

Legislators’ proposals

Assemblymember Esmeralda Soria, a Fresno Democrat whose district includes Madera and who is authoring legislation, said keeping hospitals open is not optional — people should have emergency care close to home.

“I think this issue is really important as the state continues to pursue expansion of coverage. This is a reminder that folks in my area may qualify for Medi-Cal, but what does that mean if they can’t access care?” Soria said.

Soria is authoring Assembly Bill 412, the legislation that would create an emergency loan program specifically for hospitals that are facing closure or that have closed but have a plan to reopen. Currently, state loans are only available to operating public hospitals, but Soria wants to create an option that would aid the reopening of Madera Community Hospital. In the case of a closed facility, the loan would be made to a government entity looking to reopen its local hospital.

The legislation would require a budget allocation of $20 million, which would be added to funds already available through the state treasurer’s office. These additional loans would likely be a very small part of the puzzle. In Madera, county officials have estimated that it would cost about $55 million to reopen the hospital.

Long term, legislators are eyeing more ambitious ideas. For example, Soria said an ideal scenario would be for the University of California system to take over the defunct Madera hospital. The UC could run a medical residency program there, which would help attract more providers to the San Joaquin Valley.

“We’ve approached UC Merced,” Soria said, noting that those conversations are very new. “Is it a possibility to dream big and have the UC take it over? I think there are opportunities like this, and we have to think outside the box.”

Meanwhile, Sen. Anna Caballero, a Merced Democrat, has introduced Senate Bill 870, which calls for the state to renew a tax on managed care organizations that expired last year, and use some of those funds to increase payments to hospitals and other providers. Higher payment could provide some relief to hospitals that serve a large low-income patient population, Caballero said.

Medi-Cal rates, providers argue, have not kept up with growing costs. The California Hospital Association estimates the state pays hospitals 74 cents for every dollar spent on a Medi-Cal patient. Experts point out that hospitals also receive “supplemental payments,” which include payments to hospitals that serve a disproportionate share of Medi-Cal patients and compensation for care provided to uninsured people. In 2021, California hospitals altogether received about $9.2 billion in these supplemental payments, according to the Medicaid and Children’s Health Insurance Program Payment and Access Commission.

In an email, the hospital association said supplemental payments do not make up for the shortfalls in base pay. “The structural funding problem is the result of base payment rates that haven’t increased in over a decade, despite massive inflationary growth,” said David Simon, a spokesperson for the association.

Gov. Gavin Newsom also called for the reinstatement of the tax on managed care organizations in his January budget draft. His proposal points more toward sustainability and offsetting any potential cuts in Medi-Cal, rather than expanding service levels and provider payments. Typically, revenue from that tax allows the state to save general fund spending on Medi-Cal. If reinstated, revenue from this tax could save the state’s general fund up to $2 billion a year, according to the Legislative Analyst’s Office.

Caballero said that providing aid to hospitals should come with some scrutiny. Part of what legislators are working on in these proposals is the criteria hospitals will have to meet in order to be eligible for state resources, she said. One idea is to send a team of experts that analyzes each hospital’s situation, and if part of the problem is mismanagement, then there would have to be changes in the hospital’s leadership as a condition to receive help, she said.

The Republican Senate caucus, led by Sen. Brian Jones, a San Diego Republican, is taking a different approach and pegging its legislation, Senate Bill 774, to the state attorney general’s authority over hospital transactions. By state law, the attorney general has to review and approve mergers that include a nonprofit hospital as a way to examine a buyer’s market power and ensure protections for patients.

Trinity Health, a nonprofit Catholic health care system, was set to purchase Madera Community Hospital but pulled out of the deal, blaming conditions imposed by Attorney General Rob Bonta. Jones’ bill seeks to prohibit the attorney general from requiring certain conditions, like restricting the buyer from negotiating new contracts and rates with payers.

Assembly Bill 869, by Assemblymember Jim Wood, a Democrat from Healdsburg, would benefit small and rural hospitals by providing relief in a different way. This bill would provide grants for seismic retrofitting to financially distressed hospitals and allow them more time to meet the state’s 2030 seismic standards. The requirements, which have been delayed in the past, have been a point of contention. State law requires that hospitals upgrade their buildings so that they are functional after an earthquake, but hospital leaders say they can’t afford the expensive upgrades, especially in their current financial situation.

“The bill is a targeted approach to preserve a small number of hospitals that are most often a community’s only access to emergency care,” Wood said during a recent Assembly Health Committee hearing, “and will certainly close if some relief is not provided.”

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City Government

SUSD’s Dept. of Public Safety Achieves Compliance with State DOJ’s Five-Year Stipulated Judgment

California Attorney General Rob Bonta announced that the California Department of Justice (DOJ) has ended monitoring of the Stockton Unified School District (District) and its Department of Public Safety (Department), concluding the five-year term of the stipulated judgment that addressed system-wide violations of the civil and constitutional rights of Black and Latino students and students with disabilities.

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California Attorney General Rob Bonta. Official photo, SUSD Police Chief Mayra Franco. Official photo, Pastor Trena Turner of Stockton’s Victory In Praise Church. Victory in Praise Church photo.
California Attorney General Rob Bonta. Official photo, SUSD Police Chief Mayra Franco. Official photo, Pastor Trena Turner of Stockton’s Victory In Praise Church. Victory in Praise Church photo.

Special to the Post

California Attorney General Rob Bonta announced that the California Department of Justice (DOJ) has ended monitoring of the Stockton Unified School District (District) and its Department of Public Safety (Department), concluding the five-year term of the stipulated judgment that addressed system-wide violations of the civil and constitutional rights of Black and Latino students and students with disabilities.

The District has also committed to implementing a plan to further reduce disproportionalities in law enforcement referrals through school year 2026-2027, which will institutionalize the revised policies and practices and continue the progress made under the judgment.

“Over the past five years, the California Department of Justice and the Stockton Unified School District worked together to successfully implement the corrective actions set out in the stipulated judgment to protect the rights of students in schools,” Bonta said on April 11. 

“Today we can celebrate that the agreement has helped the District take important steps to address concerns regarding interactions between police officers and students and to promote an equitable and positive learning environment.

“This achievement is a testament to the hard work and dedication of our educators, staff, students, and Department of Public Safety, said SUSD Supt. Dr. Michelle Rodriguez. “We reaffirm our commitment to continue the important changes and policies and remain steadfast in our mission to improve services and support for all students, ensuring that each child has the opportunity to succeed academically, socially, and emotionally.”

“The Department is proud of the work that was completed surrounding the DOJ Agreement which has not only made us a better Department but has placed us at the forefront of progressive policing,” said SUSD Police Chief Mayra Franco.

“The consent decree was phase one. Now we must build on this momentum to cement the progress that has been made, and fix policdes and practices that continue to hurt SUSD students and families,” said Jasmine Dellafosse, Director of Organizing and Community Engagement at End Poverty in CA.

“The requisite collaboration that took place with community members and the Stockton Unified School District was an admirable beginning,” said Pastor Trena Turner, Victory In Praise Church. “Continued efforts of transparency and inclusion that outlasts the monitoring period, will be of paramount importance to further strengthen the district and ultimately improve the lived experience of our students.”

In 2019, a DOJ investigation concluded that the District’s policies and practices with respect to law enforcement referrals discriminated against Black and Latino students and students with disabilities. The investigation also found unconstitutional search and seizure practices.

DOJ and the District entered into a stipulated judgment that required significant reforms and a five-year monitoring period. As part of the stipulated judgment, which concluded on Feb. 19, the District:

  • Established clear policies and procedures limiting when school administrators refer students to law enforcement.
  • Created a formal diversion program in lieu of citations and arrests to address minor school-based offenses.
  • Revised policies and procedures relating to treatment of students with disabilities in order to prevent discrimination, including the hiring of a trained Disability Coordinator.
  • Created clear processes for school site administrators to refer students with mental health needs to support services rather than a referral to law enforcement.
  • Instituted mandatory annual training of all officers and staff regarding civil and constitutional rights, disability and special education laws, and elimination of bias.
  • Reformed use of force policies, procedures, and practices, including implementing a comprehensive review process.
  • Updated search and seizure policies.
  • Used data to track and analyze all arrests and referrals to law enforcement from schools; and
  • Established the Community Advisory Group, which collaborated with the District to provide input and review updated policies.

Overall, the judgment led to markedly improved outcomes for students. Total arrests of students dropped significantly; in school year 2018-2019, there were 155 arrests, compared to nine arrests during school year 2022-2023. Calls for service to the Department decreased by 54% and unwarranted calls for service decreased by 52%.

Under the disproportionality plan, the Community Advisory Group and Transformative Justice subcommittee, consisting of community organizations and other stakeholders, will continue to meet regularly to improve and reduce disparities in law enforcement referrals and receive and analyze disaggregated and anonymized District data on use of force, law enforcement contacts, citations, arrests, and calls for assistance.

The media office of California State Attorney General Rob Bonta is the source of this report.

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Alameda County

Alameda District Attorney Pamela Price Is Considering Legal Action If Recall Makes It to Ballot

The Alameda County Registrar of Voters announced Monday that they had certified the required number of signatures to trigger a recall election against Alameda County District Attorney Pamela Price. Recall supporters submitted 123,374 signatures before the March 5 deadline, although only needing 73,195 valid signatures to trigger a special election. After the Registrar of Voters (ROV) was unable to verify the needed amount through a random sampling, they proceeded to manually count the signatures, which resulted in 74,757 signatures verified.

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Save Alameda For Everyone (SAFE), one of the two primary recall groups, celebrated their success in a press release Monday afternoon, stating they were “thrilled” for reaching this milestone towards ensuring “accountability and transparency in the District Attorney’s office.”
Save Alameda For Everyone (SAFE), one of the two primary recall groups, celebrated their success in a press release Monday afternoon, stating they were “thrilled” for reaching this milestone towards ensuring “accountability and transparency in the District Attorney’s office.”

By Magaly Muñoz

The Alameda County Registrar of Voters announced Monday that they had certified the required number of signatures to trigger a recall election against Alameda County District Attorney Pamela Price.

Recall supporters submitted 123,374 signatures before the March 5 deadline, although only needing 73,195 valid signatures to trigger a special election. After the Registrar of Voters (ROV) was unable to verify the needed amount through a random sampling, they proceeded to manually count the signatures, which resulted in 74,757 signatures verified.

Save Alameda For Everyone (SAFE), one of the two primary recall groups, celebrated their success in a press release Monday afternoon, stating they were “thrilled” for reaching this milestone towards ensuring “accountability and transparency in the District Attorney’s office.”

“We are confident that this grassroots movement will pave the way for positive change and a brighter future for all residents and businesses in Alameda County,” Carl Chan, SAFE’s Principal Officer, said in the statement.

Brenda Grisham, the other primary officer of SAFE, told the Post that they’re excited that the efforts of the volunteers and all involved with the campaign are paying off

“Our effort is just about public safety. Our main focus is keeping the citizens of Alameda County safe,” Grisham said.

SAFE initiated its efforts only seven months into Price’s administration, a point that Grisham made when discussing how long Price had to prove herself in the District Attorney role.

She claimed that Price had six months to meet with families of victims and prosecute perpetrators of those crimes to the fullest extent of the law, but instead chose to do the opposite and not protect the people in the community as crime and concerns for public safety continue to rise.

SAFE is calling on the Alameda County Board of Supervisors to schedule a special election no later than 125 days after their meeting later this month.

But despite the celebration from the recall proponents, Price’s legal team says that the DA is “not happy” with the Registrar of Voters.

Jim Sutton, legal counsel for Price, told the Post that they deem the recall process to be illegal by not following the clear guidance of the county charter to recall local officials.

The county charter states that the ROV has 10 days to verify signatures, which ultimately took nearly six weeks after the random sampling method failed. Additionally, the Board of Supervisors has to appropriate money to the ROV to hire staff in order to make the 10-day deadline, which Sutton claims they did not.

ROV officials did not respond for comment, as staff were instructed to tell the media to refer to the latest update until new information was released.

Sutton talked to the Alameda County Counsel office about the deadline, but claims they gave a “very convoluted” explanation for why they don’t have to comply with the 10 days.

Sutton added that many of the circulators of the recall petition were from outside of the county, incentivized by the high payout per signature. He says that this action also violates county charter as circulators need to be residents of Alameda County.

The county charter requires a “qualified elector” to circulate the petition, but also states that the United States Supreme Court has previously ruled that this requirement is an “unconstitutional limitation on protected expressive activity.” The charter says because of this ruling, it will follow the state requirements, which only stipulates that a person must be 18 years or older to circulate a petition.

According to Sutton, Price will be asking the Board of Supervisors to not put the election on the ballot based on these alleged illegalities.

When asked if her team will be pursuing legal action should the Board approve the special election, Sutton said, “if the board does schedule the election, [Price] will consider all of her legal options.”

Members on the Board of Supervisors did not respond for comment at the time of publication.

The Board of Supervisors will meet on April 30 to consider the approval of the certificate of sufficiency for the signatures and the date of the special election.

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Activism

In Crowded Race, Jovanka Beckles Wins Spot in November Runoff for State Senate

AC Transit Board Director Jovanka Beckles came in second place in the six-way primary race for state Senate District 7 seat to represent Oakland and Berkeley, placing her in the runoff race in November against Berkeley Mayor Jesse Arreguín to replace Sen. Nancy Skinner, who termed out. Beckles, writing on social media, emphasized that she had won with community support though the leading candidate was way ahead in campaign spending.

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Jovanka Beckles will face Jesse Arreguín in November in State Senate District 7 runoff election. File photo of Arreguin, Beckles photo by Ken Epstein.
Jovanka Beckles will face Jesse Arreguín in November in State Senate District 7 runoff election. File photo of Arreguin, Beckles photo by Ken Epstein.

By Ken Epstein

AC Transit Board Director Jovanka Beckles came in second place in the six-way primary race for state Senate District 7 seat to represent Oakland and Berkeley, placing her in the runoff race in November against Berkeley Mayor Jesse Arreguín to replace Sen. Nancy Skinner, who termed out.

Beckles, writing on social media, emphasized that she had won with community support though the leading candidate was way ahead in campaign spending.

“Despite being vastly under-fundraised, we have emerged victorious in the State Senate primary! This victory is not just about me. It’s a victory for our working class, our poor, our disenfranchised Black and Brown communities, our Palestinian siblings fighting for liberation.”

In the March 5 primary, Arreguín came in first with 32.81% of the vote, while Beckles received 17.48%. Oakland Councilmember Dan Kalb was third with 14.89%, while Kathryn Lybarger followed with14.46%. Sandré Swanson received13.36%, and Jeanne Solnordal captured 7%.

Born in Panama, Beckles immigrated to the U.S. with her family when she was 9. She attended Florida A&M University on a full-ride basketball scholarship, majoring in psychology as an undergraduate and later earned an MBA.

She worked for decades in public health as a mental health clinician, serving impoverished and marginalized children and families in Contra Costa County.

In a speech at a recent victory celebration, she emphasized her progressive record of working for her East Bay constituents.

“I’m here today because of you, your belief in me, a Black, Latinx, immigrant, gay woman,” she said. “We did something historic. Grassroots candidates don’t (often) beat millions of dollars.”

“When I get to Sacramento, I will continue delivering results for you,” she said, pledging to continue working on tenant protections such as supporting the ballot measure to remove a ban on rent control in California.

Beckles plans to propose expanded legal protections for seniors and disabled tenants; create educational opportunities to make public school and university education fair and available for all students; provide transfers for AC Transit and make public transportation affordable for seniors and people with disabilities; and enhance environmental protections.

She also supports a Gaza cease-fire.

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