![]() “This is sadly a situation where a small community hospital has no big brother or big sister to help them out during trying times,” he said.Ĭhristopher Whaley, an economist at the Rand Corp., said what is happening in the hospital market is “a tale of the haves and the have-nots.” Hospital finances were widely affected by the COVID-19 pandemic, “but there was also lots of federal financial assistance. That made Beverly Hospital more vulnerable, said Stan Otake, a healthcare consultant and former hospital executive. “2022 was a very difficult year for hospitals in general,” said Glenn Melnick, a USC professor focused on health finance.Īs hospitals have faced rising costs for labor and supplies, those that are not part of bigger systems tend to be at greater risk, “because typically the big systems have accumulated money and built up giant reserves that they can make available to the members of their system who get into trouble,” Melnick said. The association has been pushing for an infusion of $1.5 billion from the state to stabilize hospitals and said Medi-Cal reimbursement rates must be increased in the long term. What is happening to Beverly is another example “of the deeply concerning situation that California hospitals find themselves in and of the risk facing millions of Californians that they could lose access to critical hospital services,” said David Simon, senior vice president of communications for the California Hospital Assn. Hospitals in El Centro, Visalia and Arcata have announced cutbacks in services. Hospital industry groups have said that Madera was not a fluke: A report from the consulting firm Kaufman Hall, commissioned by the California Hospital Assn., found that 1 in 5 hospitals across the state are at risk of closure. “A sale process that is overseen by this court will enable the debtors to save Beverly Hospital and maintain the high quality of healthcare it provides to a community in desperate need of care.” The bankruptcy filing by Beverly was “precipitated by the need to avoid what happened in Madera,” Cheng wrote. ![]() The closure of the rural hospital spurred Madera and Fresno counties to each declare a state of emergency and sent patients spilling into Fresno emergency rooms. “In January, the parties withdrew from the process - if they had gone through with it then, our review would have been completed by now,” the attorney general’s office said in a statement.īeverly Hospital officials had also pleaded with state lawmakers for $8 million in immediate aid, but the money wasn’t approved, Cheng said in a court filing.Ĭheng said that shuttering the hospital would have a grave effect on its community, invoking the recent closure of Madera Community Hospital in the San Joaquin Valley as a cautionary tale. ![]() The attorney general’s office disputed that the review process was “onerous” and said allowing a sale without such a review “would be potentially dangerous for the community,” because it would evade an important process that “would look into whether their needs would continue to be met under new ownership.” The office said it had been attempting to work with Beverly Hospital management since March 2022 after hearing about its financial problems, but the hospital did not file a notice to start review of a potential transaction until December. (State law gives the attorney general oversight over the sale or transfer of nonprofit hospitals.) In January, Beverly Hospital told the attorney general that its attempt to affiliate itself with Adventist Health was “no longer viable” because it did not have the financial resources to remain operational while the attorney general review was underway. Hospital officials said they had tried unsuccessfully to negotiate mergers or affiliations with three hospital systems and faulted an “onerous review process” by the California attorney general as an obstacle to those efforts. ![]() The 202-bed hospital had already announced it would pare back its services in June to cut costs, including by halting labor and delivery care in its maternity department.
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