With $50 million in state funds now available, Madera Community Hospital sees a path to reopening
State money has been set aside to help the bankrupt Madera Community Hospital reopen – nearly a year after it shut its doors.
MADERA, Calif. – Out of 17 hospitals granted funding from the state’s Distressed Hospital Loan Program, Madera Community Hospital will get the largest share of $50 million in a no-interest loan.
The hospital initially applied for $80 million.
In order to access the funds, the state must approve a comprehensive reopening plan. In the meantime, Madera Community Hospital will receive a $2 million bridge loan to help with operating costs as it works with Adventist Health – which offered to operate the hospital in July – to put together the reopening plan.
Kaweah Health hospital in Visalia will also receive more than $20 million from the loan program for operating costs as that hospital has also faced financial challengesin recent years. The Distressed Hospital Loan Program was brought forward by Assemblywoman Esmeralda Soria and Sen. Anna Caballero.
“We're just super excited about the hope that it provides to Madera County and the community that has been long waiting for some resolution from the state or some solution,” Soria said.
Among the conditions outlined by Adventist Health, hospital officials requested Madera Community Hospital secure $55 million in immediate funding for the first year of operations.
A reopening timeline was estimated at six to nine months.
Elisa Rivera, spokeswoman for Caballero, told KVPR that as of Monday, Madera Community Hospital is “in receipt of the $5 million appropriation which is intended to be used to facilitate the reopening of MCH,” which would meet the first year of funding requirements.
The letter of intent also stipulated the hospital would need another $30 million in committed “credible financing sources” to sustain operations in the second year. The proposal includes the possibility that Adventist will purchase the hospital after three years of operations.
In a statement to KVPR, Madera Community Hospital CEO Karen Paolinelli said she was “very grateful” for the development in what has been an arduous year for the hospital and the community as it sat closed and unused.
Japhet De Oliveira, a spokesperson with Adventist Health said, going forward, it will be necessary for “all parties to be involved in developing the approved plan and negotiating the terms of management services.”
The hospital closed in late December last yearand filed for bankruptcy in March.
In order to keep paying for base operating costs, the hospital has relied on approved funding from the creditor’s committee as it underwent its bankruptcy case.
In late July, the Madera County Board of Supervisors voted to approve $500,000 in county funds allocated through the federal American Rescue Plan Act to bankroll the hospital’s operating costs for a month.
Before the hospital closure, Dr. Jennifer Ng worked as an OB-GYN at Madera Community Hospital. Although she concedes her loss of more than 300 hours of PTO from the hospital, Ng praised the news of the funding to reopen the hospital.
“I know it's imposing a lot of strain on the other hospitals as well. So again, it's only going to be a good thing,” she said, of the possibility of once again having a general hospital in Madera County.
Assemblymember Soria acknowledged that the funding is but one step in a large-scale effort to keep the hospital open when services resume. Soria said the state is also working to address the nursing staff shortage, as well as raising Medi-Cal reimbursement rates.
“At the end of the day, Madera Community Hospital needs to be able to manage itself so that it's not losing money, right?” Soria said. “And we can't control that as a state, so we have to make sure that their administrators are doing the right thing as well.”