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Local Medical Professionals, Nonprofit Leaders Aim to Establish Healthcare District

If a group of local medical professionals and nonprofit leaders has its way, a newly established healthcare district will one day own and operate Watsonville Community Hospital (WCH).

If those efforts are successful, it will likely come as a relief for South County residents who have seen their hospital managed by out-of-state corporate entities for years.

But first, organizers from the County of Santa Cruz, the city of Watsonville, Community Health Trust of Pajaro Valley and Salud Para La Gente will form the Pajaro Valley Healthcare District Project (PVHDP).

PVHDP’s mission is “to ensure the communities we serve have the high quality and sustainable healthcare services they need by placing local healthcare resources in the hands of the people,” the nonprofit stated in a press release. 

Healthcare districts are local government entities that are legally separate from counties and cities and are governed by locally elected five-member boards. 

Organizers say that a Healthcare District would have access to financial opportunities not available to most hospitals. A total of 43 of the state’s 73 healthcare districts operate hospitals, mostly in rural areas.

Mimi Hall, chair of the PVHDP Board of Directors—who will remain on the board after her departure as the County Health Services Agency director—says that organizers recently met with WCH management to discuss the possibility of local governance and ownership.

Both entities, she says, share the same overarching mission.

“At the end of the day, it’s that, for the foreseeable future, the residents of our community have access to high-quality care that’s responsive to their needs,” she says. “It was easy for all of us to agree on that shared north star.”

It’s not clear whether the new management, Los Angeles-based Prospect Medical Holdings—which took over operations last year after Halsen Healthcare was ousted—would be willing to cede control.

In an emailed statement, that company said it plans on continuing discussions with PVHDP.

“It is important to stress that these discussions are very preliminary, and we do not have any details at this point,” the statement says.

Making the situation somewhat more complicated is the fact that Halsen in 2019 sold the grounds and building to Alabama-based Medical Properties Trust (MPT), and then leased it from them in a so-called sale/leaseback. 

The agreement netted roughly $39 million, which Halsen officials said they planned to use to run the hospital. 

“We still have a lot more work to do, but we have been preparing to go work with our community stakeholders and the folks who helped found this nonprofit organization to find a way to give this hospital back to the community,” Hall says.

Hall says that she hopes to begin the process to officially form PVHDP soon, which would happen one of two ways.

Organizers could turn to the Monterey Bay Local Agency Formation Commission—a process that, among other things, would require getting signatures from 12% of the registered voters in Santa Cruz County.

They could also go through the state’s legislative process, where the request would face the same road that hundreds of proposed bills face every year.

“We’re at the beginning stages, but what we know is that there is enough in place for us to want to be able to pursue this,” Hall says.

The news comes roughly a week after dozens of WCH nurses for the third time during the pandemic picketed outside of the hospital. This time, says Rosanne Farris, a registered nurse (RN) in the critical care unit, they were picketing because of staffing levels and mandatory overtime shifts that they say put patients and them in danger. 

Under Prospect’s management, chronic understaffing has worsened, Farris says, forcing critically ill patients to be held in the emergency and telemetry units for sometimes hours at a time because there aren’t enough intensive care unit RNs to care for them.

Farris says that health agencies across the nation are dealing with a shortage in nurses, as many have retired or gone on medical leaves of absence after battling Covid-19 over the past 19 months. But, she adds, Prospect has exacerbated this dearth of nurses by not keeping the traveling nurses that it brought in thanks to state funding or contracting new ones.

“I just don’t see how this for-profit health system will ever give this community the hospital and care it deserves,” Farris says.