WHAT YOU NEED TO KNOW: Hospitals across California and the country are facing financial stress, especially since the COVID-19 pandemic. To help community hospitals remain open, Governor Newsom and the Legislature created the Distressed Hospital Loan Program – supporting facilities in the most severe financial distress with a lifeline to help them remain open or potentially reopen.
SACRAMENTO – Governor Gavin Newsom is announcing nearly $300 million in zero-interest loans to 17 community hospitals across California. The funding was made possible through the Distressed Hospital Loan Program created in partnership with the legislature.
“Across the country, community hospitals are experiencing financial stress like never before. These hospitals are often the only acute health care access point in their area,” said Governor Newsom. “In partnership with the legislature, we are working to keep the doors open so Californians can access critical care close to home.”
WHY THIS MATTERS: Many of the community hospitals being supported today across California are in more rural areas of the state, serving communities with lower income, and communities of color. Keeping these health care access points open means Californians can continue to access the health care services they want or need in their community.
LOCAL LEADERS VOICE SUPPORT
- Senator Caballero: “With numerous hospitals on the brink of bankruptcy in California, my number one priority this year has been to ensure that residents of the 14th Senate District had access to high quality health care. I have worked diligently with my legislative colleagues, the Governor and stakeholders to find sustainable solutions and the Distressed Hospital Loan Program became the centerpiece of a larger relief package. It brings me tremendous relief to know that Madera Community Hospital and Hazel Hawkins Memorial Hospital in San Benito County have received grant awards and will be able to ensure that people can once again receive services in their own communities. When seconds mean the difference between life and death, we cannot afford to have hospitals closed. Today is a great day for Senate District 14.”
- Assemblywoman Soria: “Reopening Madera Community Hospital has been my number one priority. The millions in financial assistance is an important step in the right direction to help Madera Community Hospital reopen its doors to the community. We have more work to do, but I’m proud to have led this effort, and am grateful the Legislature and Governor moved quickly to ensure vulnerable communities across California have health-care access when they need it most. I remain hopeful and will continue to work hard to ensure Madera Community Hospital reopens.”
- Assemblymember Wood: “I’m grateful to Governor Newsom for recognizing the desperate financial situation some hospitals find themselves in, at risk of closure directly affecting entire communities, especially those with no other hospitals nearby. We were able to work together to secure funding in the budget to provide these much needed loans to the distressed hospitals that clearly require the resources in order to continue to provide critical health care to their communities.”
- Assemblymember Garcia: “The Distressed Hospital Loan Program extends a lifeline to economically underserved hospitals, like those in our rural area, struggling to keep their doors open. We are grateful for the swift actions and collaborative leadership of Governor Newsom and my Legislative colleagues that have allowed us to deliver urgent financial relief to hospitals. These resources will protect access to emergency healthcare services in Imperial Valley and help save lives.”
ABOUT THE DISTRESSED HOSPITAL LOAN PROGRAM: In May, as part of early budget action, Governor Newsom announced the creation of the Distressed Hospital Loan Program (DHLP) for an initial $150 Million. Governor Newsom brought an additional $150 Million into the program through the Managed Care Organization (MCO) Provider tax, doubling the financial support available to these critical facilities. The DHLP focuses on certain public and nonprofit community hospitals that are experiencing the most severe financial distress – using the funds to either reopen a recently closed facility or keep a facility on the brink of closure or reducing its services from closing. The Department of Health Care Access and Information and the California Health Facilities Financing Authority (CHFFA) at the California State Treasurer’s Office will jointly administer the program. The two departments have notified the eligible hospitals what loan amounts they have been awarded, with the loans scheduled to be released in the coming weeks.