The Board of Supervisors next week will consider approval of a $1 million loan and hands-on assistance from Riverside County agencies to keep the doors to the emergency room open at bankrupt Palo Verde Hospital in Blythe.
The proposed loan agreement with the Palo Verde Healthcare District is among the top items on the board’s policy agenda Tuesday.
“A functioning local emergency department supports timely treatment for life-threatening conditions where minutes matter and reduces risks associated with extended transport times, and also helps preserve a viable destination for ambulance transport and coordination with emergency response partners,” according to a statement posted to the board’s agenda.
County Chief Executive Officer Jeff Van Wagenen, in coordination with Supervisor Manuel Perez, whose Fourth District encompasses the Palo Verde Valley, proposed the rescue loan, as well as a county healthcare “strike force” to delve into steps for solving the hospital’s dire financial straits, last week. Palo Verde Healthcare District administrators immediately accepted the plan.
The hospital has only a few days’ cash on hand to fund operations, according to officials. The loan would be available to the district as soon as it establishes a stand-alone bank account for deposit of the seven-figure sum, which would be drawn directly from the county General Fund.
The proposed monetary agreement specifies that the county will have “first priority” status among the healthcare district’s creditors and would under no circumstances be liable for any of the district’s debts. The loan structure calls for a roughly nine-month grace period, during which no payments on the loan would be required. However, starting in October, initial payment on loan principal would be necessary. A 3% annual interest rate would be assessed beginning in January 2027, and the $1 million would have to be fully amortized by October 2031.
The strike force would be composed of individuals with knowledge of public finance and hospital operations, presumably from the Executive Office and Riverside University Health System.
Without the hospital, the nearest option for emergency healthcare would be more than 70 miles away, officials said.
In a statement last week, the Executive Office highlighted the likelihood of the loss of emergency medicine at the hospital after the California Department of Healthcare Services nixed a planned “voluntary rate range intergovernmental transfer” that would’ve extended $9.9 million in credit for remaining operations.
The Blythe City Council has since approved a $330,000 bridge loan, but that will only keep the emergency room’s doors open until the end of the month, officials said.
At the end of September, the Palo Verde Healthcare District Board of Directors voted to seek federal Chapter 9 bankruptcy protection for the district while efforts were made to rectify ongoing financial losses.
Administrators noted the hospital had been struggling to remain afloat since the start of the current decade, with revenue streams withering while patient loads remained unchanged.
The California Health Facilities Financing Authority extended an $8.5 million infusion from the Distressed Hospital Program in 2023, but that turned into a short-term fix, according to the district.
Administrators expressed frustration at the time about the inability to recruit a chief financial officer who would stay the course in sorting out possible solutions. Four CFOs came and went in an 18-month span.
“Chapter 9 is the last tool left while we work to fix the financial management challenges that have so drastically impacted the hospital during the past several years,” PVHD Board President Carmela Garnica said in October. “Our community deserves a functioning hospital. We are doing everything we can to keep it open.”
Only the emergency room remains open. All other hospital facilities have been shut down.
The county loan would pay for staff salaries and benefits, pharmaceuticals, equipment purchases, utilities, billing operations and some legal expenses associated with Chapter 9 proceedings.
Kudos once again to the combined effort of the Blythe City Council and Riverside County executives for their assistance in enabling Palo Verde Hospital to continue to render emergency services in East Riverside County. We are concurrently putting into place a Rural Centric Care Organization in partnership with a variety of Medicare, Medi-Cal and commercial health plans that will centralize sufficient capital to increase physician resources and others in Blythe, make needed capital improvements to hospital, reopen the hospital, and plan the construction of a new Scripps-style hospital and clinic. 18,000 to 20,000 Americans in Blythe can look forward to a time when they will rarely have to leave town for care. Dr John Raffetto, Chairman, AmbassadorCare.com.