Hazel Hawkins Memorial Hospital seeks partnership or sale to keep only San Benito County hospital open

HOLLISTER, CALIF. (KION-TV)- Update Feb. 16, 2023, at 4:13 p.m.-Hazel Hawkins Memorial Hospital is going through a financial crisis and the only way seemingly out is to find a partner or sell parts or all of the hospital. As of Thursday, that's where the hospital tells KION they are.

Last November the hospital filed for Chapter 9 bankruptcy and was trying to find a financial advisor to help cut costs to keep the only hospital in San Benito County open.

The hospital now confirms with KION that they are seeking a partner or buyer to help them out of the financial crisis.

“The business plan for the district is to find a strategic partner or sell some or all of the District’s facilities a larger health care system. To date, the District contacted over 100 organizations across the country, identified seven motivated and wellqualified potential partners, and started hosting tours of the District with interested parties.”

Seth Freeman, Managing Director of B. Riley AdvisoryServices, a national firm hired by the district to help with its turnaround

The District says they are expected to run out of money in April 2023 and need additional funding to complete a sale.

“The District is leaving no stone unturned in its efforts to secure bridge funding,” said Freeman. “The District is having regular meetings with local and state leaders for public funding, and initiated a thorough and disciplined search for sources of private funding.”

The district says it has increased projected cash flow but $6 million in a few months. They still need more money to keep them afloat until September to secure a potential buyer or partner.

Hollister Mayor Mia Casey told KION that to her understanding Hazel Hawkins has been actively seeking a partnership or sale. They have also been giving tours of the facility.

The hospital has signed an "NDA agreement in order to have discussions with a prospective group," per Mayor Casey.

“A strategic partner or sale is the most promising way to maintain the current level of healthcare services,” said Mary Casillas, Interim CEO of HHMH “We are working towards a sustainable solution for the district that will deliver for our employees, patients and the greater San Benito County.”

Hazel Hawkins Memorial Hospital speaks on what declaration for bankruptcy means

Hazel Hawkins Memorial Hospital is going through a financial crisis.

During a special board meeting, directors passed a resolution declaring a fiscal emergency. This allows administrators to file Chapter 9 Bankruptcy when they see it necessary.

The administration says this will allow the district to restructure its finances. Although they’ve done everything they can, it’s still not enough, according to Interim CEO Mary Casillas.

“Over the last 2 years, hospital management and the board have taken really significant steps to reduce expenses,” Casillas said. “With increased inflation, shrinking reimbursements, and recovering from COVID, it really has put us to where we are now.”

This sudden move was something nobody had expected, especially from those that work in the hospital, according to Registered Nurse Diane Beck.

“It was a shock to all of us,” Beck said. “And as soon as we did find out, as soon as I found out, I contacted the labor rep and said hey, we need to find out what’s going on.”

Even bigger than the possible bankruptcy was the lack of transparency. The nurses want the higher-ups to know about informing them and the community.

“It’s not just a meeting of ok, we’re gonna have a meeting tomorrow,” Beck said. “They need to come forward and let us know at least 2 to 3 weeks in advance so that the community can be at those meetings.”

In response to the communication issue, the hospital says it will keep in touch with workers and the community to ensure no issues. 

It was also informed that the nurses would have their own meeting to see what they could do to keep the hospital doors open. The hospital says there will be no reduction in services, and business will stay as usual.