$1M infusion allows California hospital to avoid closure — for now

Sebastopol, Calif.-based Sonoma West Medical Center was able to keep its doors open due to a last-minute $1 million infusion from Durall Capital Holdings, a Sunrise, Fla.-based hospital and laboratory operator. However, the hospital's financial troubles aren't over.

Sonoma West Medical Center began preparing to shut down on Tuesday. The hospital stopped accepting new patients, and emergency crews told The Press Democrat ambulances were being diverted from the hospital.

"We were anticipating closure," Dennis Colthurst, president of the Palm Drive Health Care District board told The Press Democrat. "We were ready to pull the trigger."

Sonoma West Medical Center was able to avoid closure after Durall Capital Holdings agreed to make a $1 million capital investment in the hospital. At a meeting Wednesday with the Palm Drive Health Care District, which owns SWMC, hospital interim CEO and COO John Peleuses said Durall Capital Holdings will take over management of the hospital's laboratory services with hopes of turning a profit.

The hospital will use the funds from Durall to pay debts owed to key vendors and keep the facility running. "We are not out of the woods yet, but we have some breathing room," Mr. Peleuses said at the meeting Wednesday, according to The Press Democrat.

Although the hospital is open, no surgeries could be performed there as of Wednesday evening because its anesthesiologists quit on Tuesday. Mr. Peleuses said hospital officials will try to get the anesthesiologists, who are owed $146,000 by SWMC, to come back to work, according to the report.

Sonoma West Medical Center, formerly Palm Drive Hospital, has faced financial troubles for years. The hospital closed in April 2014 after a duo of bankruptcy filings but resumed business in October 2015 after a strong push by local residents to reopen the facility. It was not long before the hospital began struggling financially. In February 2016, the hospital reported it was not bringing in enough revenue to cover its expenses.

With the goal of improving its financial performance, Sonoma West Medical Center enlisted the help of Pipeline Health, a healthcare management company that owns and operates hospitals in California and Washington, D.C. Pipeline ended its contract with Sonoma West Medical Center in March, with the hospital owing it about $800,000. As of February, the hospital's outstanding bills totaled roughly $6.8 million, according to the report.

More articles on healthcare finance:

Arizona hospital falls into bankruptcy less than 2 years after opening
SSM Health's operating income tumbles after St. Louis hospital acquisition
5 latest hospital, clinic closures

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Whitepapers

Featured Webinars