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Madera Community Hospital close to signing a ‘very viable’ partner, unlocking county funding

Madera Community Hospital shuttered in late December 2022.
Soreath Hok
Madera Community Hospital shuttered in late December 2022.

Madera County Supervisors are agreeing to fund $500,000 in hospital operating costs for 30 days, but only if a new partner’s letter of intent is in place.

MADERA, Calif. – Madera Community Hospital is closer than ever to acquiring an operating partner to help jump start medical services in Madera County, which has been without a general hospital since late December.

On Tuesday, county supervisors unanimously agreed to appropriate $500,000 in funds from the county’s allotment of American Rescue Plan Act dollars to fund the hospital’s base operating and salary costs for 30 days.

But supervisors said a letter of intent from a hospital operator is key to accessing those funds.

Supervisor Jordan Wamhoff weighed the use of public funds to rescue a private hospital.

“It’s a private hospital, but it serves the community. Ultimately this board is responsible for also serving this community and making sure that our residents receive the care that they need,” Wamhoff said.

The county’s decision to move forward with the funding was influenced by a reopening and financial report presented by Force 10 Partners, a consulting firm hired by the county to look into hospital finances.

The report said reopening the facility as an independent hospital would not be sustainable. Instead, its best chance to stay open is with the help of a larger health system.

Robert Minkin of the consulting firm said a reopening timeline could be within six to nine months, and cost approximately $15 million upon reopening.

In an interview with KVPR, Madera County Supervisor David Rogers said an outside entity was close to submitting a letter of intent. Rogers would not name the party, but said it was “very viable” and a “good organization that manages hospitals.”

Rogers hoped the county’s efforts would force state leaders and creditors to see the hospital is worth saving.

“It sends a message to the creditors that selling off the assets is not an option,” Rogers said.

St. Agnes Medical Center in Fresno is the main secured creditor in Madera Community Hospital’s bankruptcy proceedings. KFF Health News reports that since the hospital declared bankruptcy, St. Agnes reportedly has been pushing to liquidate the hospital’s assets in order to get back a $15 million loan made during the merger talks that fell through last year.

At a bankruptcy hearing on Tuesday, the hospital’s bankruptcy attorney Riley Walter stated the hospital was looking at entering a management services agreement with a healthcare system.

“They're going to run the hospital. We believe that there may be an option to purchase the hospital in the future. But initially, it's a strict management services agreement,” Walter said.

A representative for St. Agnes noted to the bankruptcy judge that a management agreement would need approval from the creditors’ committee.

The judge on Tuesday also approved the use of hospital cash reserves to keep operations going through Aug. 4 – at the latest. Another hearing is scheduled for Aug. 1 to determine if funds can be extended beyond Aug. 4 if needed.

State Assembly Member Esmeralda Soria, who represents the Madera region, said she is hopeful about the reopening plans.

“It is my hope that Madera Community Hospital will be acquired as soon as possible, and that, with the sustainable reopening plan they have created and the financial assistance of the state and county, residents of Madera County will regain access to the essential healthcare services they need and deserve,” Soria said.

Soreath Hok is a multimedia journalist with experience in radio, television and digital production. She is a 2022 National Edward R. Murrow Award winner. At KVPR she covers local government, politics and other local news.
Esther Quintanilla reports on diverse communities for KVPR through the Central Valley News Collaborative, which includes The Fresno Bee, Vida en el Valle, KVPR and Radio Bilingüe.