Last spring, Palo Verde Hospital in Blythe was on the brink of closure, after a series of financial mishaps left it bleeding cash.
In May, the hospital announced that it would not accept new patients, “for the foreseeable future,” although its emergency room and clinic remained open, the Riverside Record reported.
But emergency state funding announced this summer will help the rural hospital stay open, according to state Sen. Steve Padilla, a San Diego Democrat, whose district includes parts of the Inland Empire.
“In a time (when) our rural hospitals are facing financial hardship and potential closure, it is critical that the state step in to ensure all Californians have access to life-saving care,” Padilla said in a statement. “These hospitals are often the only source of healthcare for an entire community. Palo Verde Hospital is the only acute-care facility within a 100-mile radius, approximately a two-hour drive away – too far in case of an emergency.”
As Palo Verde Hospital had suspended admitting new patients in May, Rep. Raul Ruiz, a Palm Desert Democrat, called on Gov. Gavin Newsom to allocate $4 million in the state budget to keep Palo Verde Hospital afloat, the Desert Sun reported.
He called the looming closure a public health emergency that “puts lives at risk and would leave a massive health care gap in one of the most underserved regions of our state.”
State agencies stepped in, but didn’t provide as much as Ruiz requested. The state Department of Health Care Services expedited $560,000 in Medi-Cal payments to Palo Verde Hospital “to support hospital operations and protect access to care for the community,” the California Health and Human Services Agency told CalMatters in an email.
Last year the Department of Health Care Access and Information awarded the facility $8.5 million through the Distressed Hospital Loan Program, but there are no more funds available through that program. As a recipient of that aid, the hospital had to submit a turn-around plan that detailed how it would use these funds to stay solvent in the long run.
The hospital will also get an extension on repayment of state loans, enabling it to put that money to patient care instead of debt service, Padilla’s office told CalMatters.
El Centro Regional Medical Center in Imperial County, another desert facility in dire financial straits, received $28 million through the Distressed Hospital Loan Program last year and also recently got debt relief on that loan, state officials said. In July the El Centro City Council approved the sale of that facility to a bigger system, Imperial Valley Healthcare District, the Calexico Chronicle reported.
Palo Verde Hospital serves Blythe’s 18,317 residents, 2,600 inmates at Ironwood State Prison and thousands more in the region, Ruiz stated in a letter to Newsom. Without it, the closest medical care would be about two hours away at JFK Memorial Hospital in Indio and Colorado River Medical Center in Needles.
Ruiz said the hospital had faced a cascade of problems including litigation, operating system replacements, and a cyber-attack, which left the hospital with negative cash flow of about a $1 million per month.
The closure of Chuckawalla Valley State Prison in 2024 led to declining population in the city, and low Medi-Cal and insurance reimbursement rates also led to the hospital’s financial crisis, according to the Riverside Record.
It’s not alone. California’s rural hospitals have always operated on a thin margin, and several are on the brink of closure this year, Capitol & Main reported in June, adding that “California’s rural health care system has been financially precarious for years.”