Watsonville (Calif.) Community Hospital’s board of directors voted Oct. 28 to move forward with a 120-day public notice to potentially close its labor and delivery and neonatal intensive care unit services. The board did not vote to close the services, according to a news release.
“This community fought hard to save Watsonville Community Hospital in 2022, and the work to secure its future continues today,” Tim Moran, interim CEO, said in the release. “We are pursuing every reasonable opportunity to preserve services, including new funding, stronger partnerships, and changes to improve our financial health. But we must also prepare for the possibility that funding will not arrive in time. Every step we are taking is focused on one goal: keep Watsonville Community Hospital open and serving our community for generations to come.”
Watsonville Community has approximately eight days of cash on hand and faces a daily cash shortfall of about $85,000 before supplemental government payments. Its maternity and NICU services are expected to lose $9.6 million in fiscal 2026, with upcoming federal Medi-Cal changes expected to add further financial pressure.
Mr. Moran said in a Sept. 22 board meeting that the hospital might not be able to sustain operations beyond the next six to 12 months without financial change.
The board approved an application for up to $26 million through California’s Distressed Hospital Grant Program. The funds could help stabilize maternity and NICU services while also improving technology, supporting physician recruitment and long-term financial planning. Hospital leaders have also requested financial support from Oakland, Calif.-based Kaiser Permanente and the California Nurses Association to maintain maternity services, the release said.
No service closures can occur before the required 120-day notice period ends. During that time, the hospital will continue to seek funding and partnerships, hold a public hearing, and work with community members, employees and patients to explore alternatives.
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