California hospital to be sold or close in January

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Watsonville (Calif.) Community Hospital said it will be forced to shut down if it is not able to secure a buyer by Jan. 28, according to Good Times Santa Cruz

The community hospital said it is facing significant financial challenges, which were exacerbated by the loss of revenue amid the COVID-19 pandemic.

The potential closure, which would also result in permanent layoffs, was announced in a letter sent to employees Nov. 29. 

"Like many healthcare providers, WCH was forced to borrow millions of dollars to fund its operating losses," Watsonville Community Hospital CEO Steven Salyer wrote in the letter, according to Good Times Santa Cruz. "As a stand-alone community hospital, WCH was not able to absorb or avoid these losses."

Mr. Salyer said that to avoid closure the hospital is actively seeking a buyer, and the Pajaro Valley Healthcare District Project emerged as a potential bidder for the hospital. The group is made up of the County of Santa Cruz, the City of Watsonville, Community Health Trust of Pajaro Valley and Salud Para La Gente and was formed to explore the purchase of the hospital.

"We're doing this because we recognize how important this hospital is to the community," Mimi Hall, a spokesperson for the project, told KION. "We are going to try as hard as we can and leave no stone unturned to figure out a way where we can be successful in our end goals of saving this hospital, acquiring it for the community."

Watsonville Community Hospital said that the sale would likely be completed through a Chapter 11 bankruptcy court process.

"This Chapter 11 filing will give our hospital the financial breathing room required to focus on patient care and operations while we conclude a sale," Mr. Salyer wrote.

"We are hopeful that we will be able to find a buyer and sell the hospital, but if we are not able to do so, the hospital will have to suspend its operations after the bankruptcy court authorizes those steps," Mr. Salyer wrote. "We are saddened to have to take this step but are hopeful that the sale will go through and that the hospital will be able to continue serving the community."

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