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California legislature approves loan program to prevent hospitals from closing

SACRAMENTO, Calif. (KION-TV)- The California Senate and Assembly have approved a bill that would prevent hospitals from closing throughout the state.

On Thursday morning, Senate and Assembly Bill 112 was approved on the legislative floor and is awaiting Gov. Gavin Newsom's signature.

The bill will allocate a one-time sum of $150 million from the general fund to aid hospitals that are facing severe financial distress and are at risk of closure, or that have closed but have a plan to reopen.

The aid will only be available to nonprofit and public hospitals in the state.

"Ensuring that our hospitals remain open and able to serve patients has been priority number one for me this year," California District 14 State Senator Anna Caballero said. "The hospital closure in Madera and other looming closures would be catastrophic in both rural and urban communities."

A local hospital that has been having financial trouble has been Hazel Hawkins Memorial Hospital in Hollister. They sent out a statement in response to SB 112 being approved by California leglistalture.

 Hazel Hawkins Memorial Hospital and the San Benito Health Care District are extremely pleased about the passage of SB 112 known as the Distressed Hospital Loan Program and look forward to its final hurdle – a signature by Governor Newsom. We want to thank our state elected officials, including Senator Anna Caballero and Assemblymember-Speaker Designate Robert Rivas and their attentive staff, and State Treasurer Ma for working with everyone to see the passage of this critical bill for rural hospitals in financial distress. However, we know there is more work to do after the final hurdle is passed – like creating the infrastructure to administer these funds. We understand, too, that this process could take months. Our current situation, however, is very acute.  For our part, we will continue the work we are doing to shore up our finances, finding a partner or buyer for our system, and to secure access to healthcare for our San Benito County community.

Hazel Hawkins Hospital

Recently, the San Benito Health District did approve a line of credit to stay financially afloat.

It is still unsure of how many hospitals throughout the state could benefit from this bill. California District 29 Assemblymember and Speaker-Designate Robert Rivas spoke on the importance of keeping hospitals open throughout the state.

"I am grateful to the Governor and my legislative colleagues for their diligent work and commitment to help distressed hospitals throughout the state continue to provide life-saving care to all residents," Rivas said. "California certainly has more work to do to ensure the long-term viability of distressed hospitals, but today is an important step in the right direction.”

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Derrick Ow

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