California hospital taps Sutter exec for CEO amid financial struggles

Financially strapped Watsonville (Calif.) Community Hospital selected a new CEO to chart the course out of bankruptcy and into public ownership, according to Lookout Santa Cruz.

The 106-bed community hospital's previous CEO Steven Salyer exited in March unexpectedly amid the hospital's transition from private to public ownership. Watsonville selected Stephen Gray, currently the chief administrator and operations executive of Santa Cruz County at Sutter Health, as the next CEO. The board will vote on Mr. Gray's appointment Sept. 27.

"He believes strongly in the mission of a healthcare delivery system — that is, even though your financial margin is next to impossible to meet, he will not let go of the commitment to serve the poor, the disabled, the uninsured and the elderly," a former colleague of Mr. Gray's, Larry deGhetaldi, MD, told Lookout Santa Cruz.

Over the last two years, Watsonville Community Hospital saw around $20 million in annual losses and continues to lose around $5 million in operating costs per year, according to the report. Last year, the Pajaro Valley Healthcare District purchased the hospital after fundraising $65 million. The hospital also received an $8.3 million no-interest loan from the state's Distressed Hospital Loan Program in August.

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