Flint, Mich.-based Insight Health System is stepping away from negotiations on a proposed lease-to-purchase agreement with Hollister, Calif.-based Hazel Hawkins Memorial Hospital, citing uncertainty around the recently signed One Big Beautiful Bill Act.
In November, San Benito County voters approved a ballot measure authorizing the San Benito Health Care District to enter into a lease-to-own agreement with Insight or another qualified buyer for fair market value, according to an Aug. 14 Hazel Hawkins news release. Insight submitted a letter of intent to purchase the hospital in January 2024.
After months of discussions, Insight decided that “due to the shifting financial landscape it was prudent for them to withdraw from the proposed transaction,” according to the release.
“OBBBA has created a level of uncertainty for us here in San Benito County that we have never seen before,” Hazel Hawkins CEO Mary Casillas said in the release. “While we have yet to fully understand OBBBA’s impact, we know it has affected the potential transaction with Insight and is having similar consequences for rural hospitals across California and the nation.”
The San Benito Health Care District said it will now “concentrate on strengthening its financial position while developing new strategies to ensure its long-term viability.”
The district sought Chapter 9 bankruptcy protection for the hospital in May 2023 after a fiscal emergency was declared by the board in November 2022. In March 2024, a bankruptcy court ruled the hospital ineligible for Chapter 9 because it failed to meet the “insolvency” definition. The district appealed, but the ruling was upheld.
