UCSF Health and Adventist Health join in new proposal to purchase Madera Community Hospital
MADERA, Calif. – UCSF Health and Adventist Health have developed a potential plan to purchase the shuttered Madera Community Hospital as a separate deal currently makes its way through court.
The latest potential bid was announced Thursday and opens up the possibility for Madera Community Hospital to be turned into a fully functional hospital as well as a teaching hospital for medical students in the San Joaquin Valley.
Adventist Health was largely seen as having left the picture after it pulled out of a deal to operate the hospital late last year. But on Thursday, Adventist Health President and CEO Kerry Heinrich said the potential joint deal could “change the dynamic of healthcare in the Central Valley.”
The partnership has support from Madera County, but so far it remains unclear how this latest bid could impact the timeline for reopening the hospital or for any agencies to purchase it.
Officials said the main priority ahead is to reopen hospital services and ensure the facilities remain “clinically credible and financially stable into the future.” They say their bid to the court will demonstrate the financial viability of their plan.
The latest potential turn for the hospital comes months into negotiations with Modesto-based American Advanced Management, whose bid to purchase and operate the facility was selected by the hospital’s board of directors in December. The company has a history of taking over distressed or closed medical facilities, including Coalinga Medical Center, which closed in 2018 and reopened in 2020.
Hospital CEO Karen Paolinelli celebrated the possibility of American Advanced Management to run the hospital, saying in December that hospital leadership supported the company’s proposal.
Last month, The Fresno Bee reported the company planned to officially take over in March and would then resume services such as emergency and primary care. But any official actions were still pending an approval from the bankruptcy court and Attorney General Rob Bonta.
A long road to reopening
Madera Community Hospital has faced setbacks ever since Trinity Health pulled out of a deal to run the hospital in late 2022. That pushed the hospital to close and declare bankruptcy, and set in motion a lengthy course of legal proceedings aiming to either restore services or sell off assets.
The hospital is the only general acute healthcare facility in Madera County, a region with a population of roughly 160,000 where many rely on state health insurance.
Adventist Health had previously announced its own plan to take over operations, but abruptly pulled out last November over concerns it couldn’t secure a fiscally viable operation.
Madera Community Hospital had secured a roughly $50 million loan from the state to go toward reopening costs, but the exact loan amount depended on how much money a new operator could put up on its own.
UCSF wants to keep care local
Earlier this month, UCSF Health purchased two San Francisco hospitals – St. Mary’s Medical Center and St. Francis Memorial Hospital – from Dignity Health. The agreement would keep current employees, services and patients at the hospital.
UCSF Health officials say they see their efforts at acquiring struggling or underutilized hospitals as a shift toward incorporating “community-based care” into its operations and helping to increase medical staffing and resources to serve more patients.
Suresh Gunasekaran, UCSF Health President and CEO, said the possibility of purchasing Madera Community Hospital is seen as viable because it would be a process undertaken with Adventist Health – instead of a single company absorbing the costs.
He also said reopening a hospital isn’t easy, and would lean on the community to help inform the process to ensure the operation remains local.
“We want this to be a hospital that the community can depend on,” Gunasekaran said Thursday, speaking to reporters during a video briefing. “We would design systems and services that directly meet the needs of this community.”
California State Senator Anna Caballero and Assemblymember Esmeralda Soria praised the partnership and said this would transform the type of healthcare available in the region. They also said this partnership could supplement other healthcare investments being made at the state level, like adding a medical school in the San Joaquin Valley.
When the hospital board selected American Advanced Management’s reopening bid in December, the hospital’s bankruptcy attorney Riley Walter said the hospital entered into exclusive negotiations with the company.
Officials involved with the bid from UCSF and Adventist said Thursday they would respect the court process but also expected that their bid would be received and considered. Caballero said going forward, “There’s a lot of work to be done.”