A “strike team” previously authorized by the board and composed of medical professionals from the Riverside University Health System initiated a reformation intended to stabilize the Blythe hospital’s emergency clinic.

The team’s deployment was appended to a $1 million stabilization loan for the hospital. However, on Feb. 24, county Chief Executive Officer Jeff Van Wagenen signed off on a $3.44 million payment to the California Department of Health Services. That disbursement was made without a vote by the Board of Supervisors because the panel was not in session. Executive Office spokeswoman Brooke Federico said the payment covered a Palo Verde Healthcare District obligation to the state’s Voluntary Rate Range Program, or VRRP.

Without emergency services at the Blythe facility, the area’s roughly 20,000 residents would lose access to “timely treatment for life-threatening conditions where minutes matter,” according to a county statement in January.
Outside of the hospital, the nearest option for emergency healthcare is more than 70 miles away.

The “intergovernmental transfer” payment, which Van Wagenen did not mention publicly during the board’s previous meeting, has enabled the Palo Verde Healthcare District to tap into taxpayer-backed credit to bolster hospital operations.

“As a result of the county’s action, the … district has already received approximately $8.9 million in program funds, with the remaining expected in the coming days,” Federico said, adding that because of Medi-Cal requirements, “immediate action was required” and could not wait on the Board of Supervisors.

The board will scrutinize the proposed revised loan agreement with the district, under which it would be on the hook for the county’s $3.44 million outlay, on top of the $1 million previously authorized for the insolvent hospital.

The supervisors also have been requested to fill two vacancies on the Palo Verde District Board of Directors. The vacant seats have hamstrung the district’s ability to convene a quorum to vote on pending actions, according to PVHD President Carmela Garnica.

“In the interest of restoring a fully functioning five-member board, I respectfully request that the county … complete the appointment process for the two vacant seats,” she said in a letter to Supervisor Manuel Perez, whose Fourth District encompasses Blythe.

Under a proposed management services agreement additionally on the agenda, RUHS staff can implement all necessary processes connected to the county’s 180-day strike team support plan, with the goal of maintaining emergency operations at the cash-strapped hospital.

“We aren’t just here to manage a transition; we are here to support the incredible frontline staff and ensure that every resident has access to the high-quality, stable care they deserve,” RUHS CEO Jennifer Cruikshank said last month.

The monetary agreement specifies the county will have “first
priority” status among the healthcare district’s creditors and will under no circumstances be liable for any of its debts. The loan structure calls for a roughly nine-month grace period, during which no payments on the loan are required. However, starting in October, initial payment on loan principal will be necessary. A 3% annual interest rate will be assessed beginning January 2027, and the $1 million will have to be fully amortized by October 2031.

At the end of September, the PVHD board voted to seek federal Chapter 9 bankruptcy protection while efforts were made to stanch ongoing financial losses.

Administrators noted the hospital had been struggling to remain afloat since the start of the current decade, with revenue streams withering while patient loads remained unchanged.

The California Health Facilities Financing Authority extended an $8.5 million infusion from the Distressed Hospital Program in 2023, but that turned into a short-term fix, according to the district. Administrators expressed frustration at the time about the inability to recruit a chief financial officer who would stay the course in sorting out possible solutions. Four CFOs came and went in an 18-month span.

Only the emergency room remains open. All other hospital operations have been shut down.

The county’s original loan will pay for staff salaries and benefits, pharmaceuticals, equipment purchases, utilities, billing operations and some legal expenses associated with Chapter 9 proceedings.

The possibility of a wholesale county takeover of the hospital’s
emergency department has not been ruled out publicly.

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In May, the hospital announced that it would not accept new patients, “for the foreseeable future,” although its emergency room and clinic remained open, the Riverside Record reported.

But emergency state funding announced this summer will help the rural hospital stay open, according to state Sen. Steve Padilla, a San Diego Democrat, whose district includes parts of the Inland Empire.

“In a time (when) our rural hospitals are facing financial hardship and potential closure, it is critical that the state step in to ensure all Californians have access to life-saving care,” Padilla said in a statement. “These hospitals are often the only source of healthcare for an entire community. Palo Verde Hospital is the only acute-care facility within a 100-mile radius, approximately a two-hour drive away – too far in case of an emergency.”

As Palo Verde Hospital had suspended admitting new patients in May, Rep. Raul Ruiz, a Palm Desert Democrat, called on Gov. Gavin Newsom to allocate $4 million in the state budget to keep Palo Verde Hospital afloat, the Desert Sun reported.

He called the looming closure a public health emergency that “puts lives at risk and would leave a massive health care gap in one of the most underserved regions of our state.”

State agencies stepped in, but didn’t provide as much as Ruiz requested. The state Department of Health Care Services expedited $560,000 in Medi-Cal payments to Palo Verde Hospital “to support hospital operations and protect access to care for the community,” the California Health and Human Services Agency told CalMatters in an email.

Last year the Department of Health Care Access and Information awarded the facility $8.5 million through the Distressed Hospital Loan Program, but there are no more funds available through that program. As a recipient of that aid, the hospital had to submit a turn-around plan that detailed how it would use these funds to stay solvent in the long run.

The hospital will also get an extension on repayment of state loans, enabling it to put that money to patient care instead of debt service, Padilla’s office told CalMatters.

El Centro Regional Medical Center in Imperial County, another desert facility in dire financial straits, received $28 million through the Distressed Hospital Loan Program last year and also recently got debt relief on that loan, state officials said. In July the El Centro City Council approved the sale of that facility to a bigger system, Imperial Valley Healthcare District, the Calexico Chronicle reported.

Palo Verde Hospital serves Blythe’s 18,317 residents, 2,600 inmates at Ironwood State Prison and thousands more in the region, Ruiz stated in a letter to Newsom. Without it, the closest medical care would be about two hours away at JFK Memorial Hospital in Indio and Colorado River Medical Center in Needles.

Ruiz said the hospital had faced a cascade of problems including litigation, operating system replacements, and a cyber-attack, which left the hospital with negative cash flow of about a $1 million per month.

The closure of Chuckawalla Valley State Prison in 2024 led to declining population in the city, and low Medi-Cal and insurance reimbursement rates also led to the hospital’s financial crisis, according to the Riverside Record.

It’s not alone. California’s rural hospitals have always operated on a thin margin, and several are on the brink of closure this year, Capitol & Main reported in June, adding that “California’s rural health care system has been financially precarious for years.”

The post This rural hospital almost closed. Emergency state funding is keeping it open, but for how long? appeared first on The Hemet & San Jacinto Chronicle.