June Ponce, executive director of the Watsonville Community Hospital Foundation, talks about the hospital in a town hall at Watsonville High School. (Nick Sestanovich — Santa Cruz Sentinel

WATSONVILLE — The last time Matko Vranjes, the interim CEO of Watsonville Community Hospital, was in the cafeteria at Watsonville High School in late 2021, the mood was a lot more somber. The hospital had begun bankruptcy proceedings, and its owner at the time — Halsen Healthcare — was looking to sell or shutter it.

But what a difference a year and a half can make. The hospital got a reprieve with the formation of the Pajaro Valley Healthcare District, which allowed it to continue to operate. The status of the hospital and its future were the subject of another town hall held in the Watsonville High cafeteria Thursday.

Tony Nunez-Palomino, a member of the district’s board of directors, reviewed the history of the hospital. It was established in 1895 as a nonprofit and continued to operate as such for 103 years until it shifted to for-profit ownership by Community Health Systems and Quorum in 1998.

“That is when some of the financial shortcomings started to arise for the hospital,” he said.

In 2019, ownership changed hands again to Halsen. However, the COVID-19 pandemic hit not too long after and the hospital struggled even more financially. Bankruptcy was announced in December 2021, but State Sen. John Laird — whose state Senate district includes Watsonville — introduced Senate Bill 418 to create a health care district that would allow the hospital to keep operating. It was signed by Gov. Gavin Newsom in February 2022.

What followed over the next six months was a major fundraising campaign that ended up raking in $64 million to cover not only the cost of bankruptcy proceedings but also to take control of the hospital’s assets. The district, which spans the Pajaro Valley from Aptos to Las Lomas, officially began operating in September, the fundraising arm — the Watsonville Community Hospital Foundation — was established in January, and the hospital is in the early stages of its strategic planning process.

Today, the hospital employs more than 600 staff — 53% of whom live in the community — and has provided services to more than 30,000 patients.

June Ponce, executive director of the Watsonville Community Hospital Foundation, said the hospital received support from everyone from local businesses to labor organizations to political leaders and community stakeholders. Of the $64.3 million raised, $6 million was set aside to cover the cost of bankruptcy, $15 million was earmarked to fund hospital deficits, $34 million was to fund the acquisition of hospital operations and $9.3 million was set aside for working capital for a new community-owned hospital.

“We’re no longer the same hospital that we were a year ago,” she said. “We’re a new company, and with any new company … there’s growth that needs to happen. We felt it was important for the hospital to have some sort of a leeway runway.”

Vranjes said the hospital experienced a $21 million loss in 2021, but a financial turnaround plan is already underway. The hospital has decreased expenses, increased revenues, renegotiated insurance contracts, continued fundraising and is exploring a potential general obligation bond measure for next year.

“As a district and public entity, we have the opportunity to do that,” he said. “That’s the right direction for us.”

Vranjes also highlighted some new initiatives at the hospital, such as a Da Vinci Surgical System, a program in which a surgeon works from an electronic console and uses robotic arms to perform minimally invasive surgery on a patient; and a cardiac catheterization lab slated to open by December.

Vranjes was asked about the bond measure. He said the district was still in the early stages of exploring the possibility of such a measure and had just authorized a community survey.

Ponce also said the hospital would plan to continue to host community dialogues.

(Original Source: https://www.santacruzsentinel.com/2023/07/21/watsonville-community-hospital-hosts-town-hall-on-agencys-future/)