$150M loan program not enough to stabilize California hospital, board says

The board of trustees at Madera (Calif.) Community Hospital — which has been closed since the start of the year — says the state's $150 loan program for financially distressed hospitals is not enough to reopen the hospital, The Sun reported May 30. 

California Gov. Gavin Newsom signed the Distressed Hospital Loan Program into law May 15. The legislation had been anticipated as a lifeline to support hospitals on the brink of closure or that have recently closed by providing zero-interest cash flow loans. To receive a loan, hospitals must submit a plan showing how they plan to maintain long-term financial viability. 

State Sen. Anna Caballero has said the hospital has not submitted a long-term plan or the financial documents needed to comply with the loan program, but Madera hospital board members claim audited financial documents were provided to the senator's office earlier this year. They also said while the loan program could help initially restabilize the hospital, it would be back in the same situation without increased Medi-Cal reimbursement rates. 

"What good is a $150,000,000 loan program now to prop up many California rural hospitals so they continue [to] operate at a loss as they careen toward a fiscal cliff in a few short years? The real problem has to be fixed," Deidre da Silva, board chair of Madera Community Hospital, told the news outlet. "MCH knows all too well that a band aid approach just postpones the problem." 

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