Stephen Gray plans to step down July 10 as CEO of Watsonville (Calif.) Community Hospital.
Mr. Gray has led the hospital since November 2023, according to a June 1 hospital news release shared with Becker’s. During his tenure, the hospital implemented its first strategic plan since public ownership and oversaw Measure N, a general obligation bond approved by local voters in 2024.
The hospital also established primary care services on campus under Mr. Gray’s leadership. More recently, Watsonville Community Hospital reported operations were generating positive revenue and received $10.6 million in emergency state funding through a grant application process, the release said. The funding, provided through the Distressed Hospital Loan Program, will be used for operational expenses, including debt management, current salaries and necessary supplies, Mr. Gray said in a May 29 statement shared with Becker’s.
The hospital started 2026 on solid ground after significant losses in 2025, Mr. Gray said in a March 25 statement shared with Becker’s. The hospital also announced in December it was seeking a health system partner following a cyberattack that contributed to its financial challenges.
Mr. Gray said in a June 2 statement shared with Becker’s that the departure was a personal decision for himself and his family.
“Our hospital has weathered some incredible challenges over the past few years, and I am confident that it is coming out stronger on this side of them,” he said. “The small hospital grant program award is going to provide much needed financial assistance, and we see more positive news on the horizon with more support in the state budget, the eventual breaking of the federal funding logjams, and new services coming online at the hospital to care for more patients.”
Mr. Gray added that the hospital’s quality and patient experience ratings are the best they have been in years, which he credited to “all of the wonderful caregivers at our hospital that have kept taking amazing care of their friends and neighbors despite the challenges.”
Watsonville Community Hospital is a 106-bed acute care facility with 650 employees and more than 300 physicians. The hospital is governed by the Watsonville-based Pajaro Valley Health Care District, a public healthcare district established in 2022 and overseen by a five-member board.
An interim CEO will lead the hospital beginning in July while the district conducts a search for a permanent CEO.
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