Amid all the national furor and tragedy surrounding health care and insurers over the past two weeks, locally there is much more to the story than denied claims and disputes about out-of-network providers.
For many people, including a sizeable number of Santa Cruz County residents, health care comes down to local doctors and local hospitals.
And looking back, two weeks prematurely on 2024, the major health care story in this county has been a hard-fought, successful battle to save Watsonville Community Hospital, which just three years ago was in danger of closing as its for-profit owner declared bankruptcy.
Efforc to make the now community-owned hospital financially healthy received a huge boost last March when voters approved a $116 million bond initiative, intended to raise enough money to purchase the hospital and complete other facility improvements.
Then, in November, the hospital and Pajaro Valley Health Care District announced they purchased the hospital building and the 27 acres it sits on for $40 million, using bond money.
Hospital leaders have said this transaction will save large sums in the long run, as the hospital will no longer spend $3 million each year on lease and insurance payments to the previous owner, a realestate investment trust and that these savings will be reinvested into service improvements.
The purchase, the bond measure and the land deal are the latest developments in the community fundraising campaign that brought in about $65.5 million in less than six months from more than 450 donors. Along with the fundraising effort, emergency legislation to create the health care district was fast-tracked through the state Legislature that ultimately allowed the now nonprofit hospital to be returned to public ownership and oversight.
The money initially raised was used to cover bankruptcy fees, hospital deficits and operations as well as initial working capital, but it wasn’t enough to purchase the buildings and land. The bond measure passed in March was able to do this and can also go toward major equipment and security upgrades – the latter of which might be quickly needed as the hospital experienced a week-long network outage earlier this month.
As part of these upgrades, WCH plans an expansion of its overcrowded Emergency Department. The 12-bed ER sees about 32,000 patients annually (80-90 a day), many of whom lack medical insurance. Watsonville’s ER is one of only two in Santa Cruz County.
There are still long-term fiscal concerns, as the hospital lost $13 million in 2023, said CEO Stephen Gray in a meeting earlier this month with the Sentinel Editorial Board. Bond funds, which cannot go toward the hospital’s operating budget, won’t help with any future deficits, but saving on rent will. WCH, however. has been running in the black this year. Gray said.
But other ongoing financial issues won’t all be solved by the bond funds. The hospital is relatively small, somewhat underutilized, officials say, so it doesn’t benefit from economies of scale. Reimbursement rates from government agencies for Medi-Cal and Medicare patients – who account for about 80% ofWCH patients – remain low, though hospital officials say this is offset in part by improved contracts with commercial payers such as Kaiser and Anthem Blue Cross.
And WCH is the only Kaiser-affiliated hospital for Santa Cruz County and North Monterey County, and hopes to see· more Kaiser doctors set up in adjoining medical offices.
Despite all the remarkable successes over the past three years, Watsonville Community Hospital faces other challenges, including a reputation outside South County of being a health-care facility for only the poor, even though it’s a vital provider for many in the Pajaro Valley, and for having fewer specialists on call than other hospitals in Santa Cruz and Monterey counties.
But that’s changing.Gray told our Editorial Board that Watsonville’s Google rating has gone up to 3.9 stars from 2.7.
As it should. The renewal of this hospital is a health care success story that this community can rally behind.