San Benito Healthcare District Presents Business Plan for Future at Intergovernmental Commission Meeting

HOLLISTER, Calif., Feb. 17, 2023 /PRNewswire/ -- Representatives from San Benito Healthcare District (the District), which operates Hazel Hawkins Memorial Hospital (HHMH), detailed the District's business plan this week to an Intergovernmental Committee comprised of San Benito County leaders.

"The business plan for the District is to find a strategic partner or sell some or all of the District's facilities to a larger health care system," said Seth Freeman, Managing Director of B. Riley Advisory Services, a national firm hired by the District to help with its turnaround. "To date, the District contacted more than one hundred organizations across the country, identified seven motivated and well-qualified potential partners, and started hosting tours of the District with interested parties."

The District confirmed that it is projected to run out of funding in April 2023 and needs additional funding to complete a transaction process. "The District is leaving no stone unturned in its efforts to secure bridge funding," said Freeman. "The District is having regular meetings with local and state leaders to seek public funding and has initiated a thorough and disciplined search for sources of private funding." The District has been successful in increasing projected cash flow by about $6 Million in a few short months by combining cost saving and funding initiatives. Even with these efforts, the District requires additional funding to continue operations through September 2023 to complete a partnership or a sale transaction.   

In response to questions from the Intergovernmental Committee, District representatives explained that simply increasing revenue and cutting costs will not offset the increasing expenses of operating the small health care system. The District continues to lose money from operations too quickly to realize the benefits of a strategic operating plan implemented in early-2022.  Unexpected cash flow challenges in mid-2022 made the situation even more challenging. "The District has continued to implement measures to reduce costs and increase revenue," Freeman said, "but it is running out of tools without being forced to close services. The bottom line is that the District cannot keep offering the same services without additional funding or realizing the economies of scale that a larger health system may bring to the table."  

The financial troubles that have beset the District are not unique. Small stand-alone rural hospitals across the state are struggling with similar issues. Even during good times, rural hospitals contend with limited cashflow. During the pandemic, the increases in staffing and supply costs to care for an influx of very sick patients stretched resources further. Several of these smaller hospitals facing similar financial burdens have shuttered, limiting access to critical care for nearby residents. 

"A strategic partner or sale is the most promising way to maintain the current level of healthcare services," said Mary Casillas, Interim CEO of HHMH "We are working towards a sustainable solution for the District that will deliver for our employees, patients and the greater San Benito County."

About Hazel Hawkins Memorial Hospital

Hazel Hawkins Memorial Hospital is a full-service, public agency hospital delivering modern medicine and compassionate care to the growing San Benito County community. HHMH offers hundreds of health services across multiple locations, including top-tier specialists, a modern Emergency Department, and a state-of-the-art Women's Center. To learn more about Hazel Hawkins Memorial Hospital and the Hazel Hawkins Hospital Foundation, please visit www.hazelhawkins.com.

PR CONTACT: Frankie Gallagher 
Hazel Hawkins Memorial Hospital
Phone: (831) 636-2644
Email: [email protected]

SOURCE San Benito Healthcare District