El Centro Regional Medical Center
El Centro Regional Medical Center in Imperial County is one of the hospitals the program will help. Photo courtesy of the medical center foundation

Gov. Gavin Newsom has signed an emergency bill providing up to $150 million in zero-interest loans to nonprofit and public hospitals in danger of closing in the aftermath of the pandemic.

Assembly Bill 112 creates the Distressed Hospital Loan Program to ensure struggling hospitals remain in operation and to assist in the reopening of recently closed institutions.

“This new program will help hospitals in extreme financial distress get the assistance they need as quickly as possible,” said Newsom after signing on Monday. “My administration has been working closely with hospitals across the state, and we will continue to do all we can to ensure communities can continue to access the care and services they need without disruption.”

The new program will be administered by the Department of Health Care Access and Information in partnership with the California Health Facilities Financing Authority.

Legislators fast-tracked action following the closure of Madera Community Hospital at the start of this year, which left this San Joaquin Valley county of 160,000 people without a local emergency room. 

Since then, another hospital, Beverly Hospital in the city of Montebello, has filed for bankruptcy. 

Other hospitals in financial trouble include Kaweah Health Medical Center in Visalia, El Centro Regional Medical Center in Imperial County, MLK Jr. Community Hospital in Los Angeles, Hazel Hawkins Memorial Hospital in Hollister, Sierra View Medical Center in Porterville and Mad River Community Hospital in Humboldt County.

Some of the hospitals were struggling prior to the pandemic, and have had a difficult time managing cash flow after they stopped receiving federal COVID relief funds.

Republican Sen. Brian Jones of east San Diego County had urged Newsom to sign the legislation, saying, “The clock is ticking for distressed hospitals that are holding on by a financial shoestring.”

Chris Jennewein is Editor & Publisher of Times of San Diego.