The saga of nonprofit hospitals losing money and teetering on the brink of bankruptcy is not a new story, but most have usually been rescued in the past by merging or being acquired by other, larger more established hospitals or health groups.
This is the story of Madera Community Hospital. For a number of reasons, mainly the state’s underfunding of Medi-Cal reimbursement rates and many government mandates, MCH had been struggling for years when things reached a critical stage last year. Nearby St. Agnes Hospital in Fresno (owned and operated by nonprofit Trinity Health) stepped in and loaned $15.4 million to MCH, and began discussions to acquire the Madera hospital and keep it open.
St. Agnes and Madera Community reached agreement, which included 13 conditions to keep the hospital open, serving more than 150,000 residents in the area. Unfortunately, current state law requires the California Attorney General to approve such agreements between nonprofit health entities, and further allows the AG to insert virtually any conditions into the agreement, no matter how unreasonable those conditions may be.
That’s just what current Attorney General Rob Bonta did — he seized the opportunity to insert his political priorities by requiring six new conditions to be met on top of the original 13 already agreed to by Trinity Health and MCH.
One of Bonta’s demands was a poison pill that made the agreement talks collapse, which ultimately led to MCH closing its doors, laying off 687 employees, shutting down community clinics in Mendota, Chowchilla and Madera, and forcing nearby residents to drive more than 30 miles to Merced or Fresno to receive even basic and emergency medical care.
Bonta’s terms were unworkable for both hospitals, and the deal failed. Madera Community closed its doors in December 2022.
Since Madera closed, at least two patients have died in unnecessarily long ambulance rides to other hospitals. A cardiovascular specialist cared for both patients and shared that one of his patients became sick and was transported to St. Agnes hospital where his patient died as emergency personnel could not revive her when she arrived at the emergency room. The specialist believed that had she been transported to a previously open MCH, she could have survived.
This tragedy never should have happened.
Ironically, Bonta was warned in July in a 150-page report (from independent hospital economics expert Dr. Glenn Melnick of USC) that Madera Community would probably close without help from Trinity Health and the closure of MCH would be devastating to the entire Central Valley.
Bonta’s key demand was that for five years after he approved the Trinity Health-MCH agreement, there would be a hard price cap placed on all medical services and supplies. This meant that the prospective new owner of Madera Community would have to keep operating at a loss for five years after Bonta signed off on the agreement.
Any new operators of MCH would be prohibited from raising the price of a cotton swab by even a penny, a doctor’s consultation could not be increased even by 10 cents, and the cost of life-saving medical procedures could not even be raised by as little as $1.
Trinity Health walked away from the negotiations, and Madera Community is now closed.
It seems Bonta won his game of chicken against Trinity Health and MCH. Unfortunately, the residents of the Central Valley are losing their hospital, and in some cases, their lives. Sadly, this was all so preventable.
Bonta apparently is now playing the same game against another struggling health facility — Beverly Hospital in Montebello.
If we don’t prioritize health-care access, we can’t provide health care. Let’s fix our broken system, take the AG’s politics out of health care, and protect patients throughout California.