A hospital’s abrupt closure means, for many, help is distant

“When my kids feel sick, we’d just head over there,” Erika Castro, a 50-year-old maid who gave birth to one of her two children at Madera Community, said of the closed hospital.

Like many who used the now-bankrupt hospital, Castro walked to its emergency room, most recently last year when her 15-year-old son Oscar suffered from a high fever. “Now,” she said as she wheeled a cart full of fresh vegetables distributed by the one-room Church of the Divine Rapture, “there’s nowhere to go close by.”

“It has to reopen,” she said.

California’s rural health-care system is teetering, a consequence of the pandemic’s long legacy, a broadly unhealthy patient pool due to higher poverty rates, and the imbalances in the way a rich state focuses its public health resources.

The dilemma exposes California’s widening east-west divide, a rural-urban split that helps define how the state government distributes resources for public health programs, education and other basic services. The eastern valleys and Sierra foothills, less populous and generally more conservative in their politics, have often been neglected by liberals from the coastal West.

In this case, the inequality comes in the form of often-inadequate government insurance reimbursements for rural hospitals, especially community hospitals unaffiliated with large health networks, and in medical education opportunities, which are scant to nonexistent across much of the Sierra Nevada and Central Valley.

The shuttering of the 106-bed hospital here, which has disrupted health-care services across this region of vast almond groves and grape orchards, is the first of what state lawmakers say could be more shuttered rural hospitals.

Across a state with the highest proportion of millionaires in the nation, 1 in 5 hospitals are now at risk of closing, according to a study released earlier this year by the California Hospital Association. Many serve the state’s rural redoubts, whose populations are often disproportionately poor and underinsured, and inner-city neighborhoods such as south-central Los Angeles.

“We find ourselves at a time in health care, and for hospitals in particular, where finances are very fragile,” said Carmela Coyle, chief executive of the association, a lobbying group that represents more than 400 hospitals. “Like a family living paycheck to paycheck, that works until there is a financial shock. That’s what our hospitals face today — and the pandemic was that shock. They spent everything and now have nothing to fall back on.”

The health-care system in this region of the San Joaquin Valley — the southern section of the Central Valley agricultural heartland — operated through the pandemic years in scarcity. It was built around an independent hospital that, unlike those that are part of larger networks, could not spread its financial losses across a chain.

The hospital faced what many in rural America are confronting in the era after covid-19 — staffing shortages, escalating labor costs, inadequate public insurance reimbursements, and a patient mix severely out of balance between the privately insured, who can pay more, and the publicly insured, whose care often costs more than the price the hospital receives for treatment.

Tightening the financial squeeze, California’s rural population is less wealthy than those living along the urban coast. As many as 15,000 of Madera County’s 160,000 people are also undocumented, only a small fraction of whom are currently eligible for coverage under the state’s low-income insurance plan known as Medi-Cal.

“We hear a lot in California about taking care of people whose incomes are inadequate and yet the state just seemed to let this hospital close,” said Madera County Supervisor Robert Poythress, a Republican, former banker and almond farmer whose family has lived in the region for six generations. “They are trying to change that, but finding a way to keep the hospital open would have been far better.”

The hospital’s abrupt closing early this year, leaving the county without surgery services, an emergency room or a maternity ward, jolted lawmakers in Sacramento and congressional representatives from a line of newly competitive Central Valley congressional districts.

“We’re trying right now to stabilize these hospitals,” said Rep. John Duarte, a first-term Republican whose district includes Madera.

Duarte is part of a bipartisan group of lawmakers who in July proposed the Rural Hospital Technical Assistance Program Act, which would make permanent an Agriculture Department initiative designed specifically to strengthen at-risk rural hospitals.

“In places like Madera, you have a very tough customer base,” Duarte said. “There’s a structural disadvantage facing much of the Central Valley and places like it.”

In August, Gov. Gavin Newsom (D) announced $300 million in no-interest loans to 17 financially strained community hospitals, funds approved by the Democrat-dominated legislature. Madera Community secured a $50 million state loan, payable once a new operator submits a viable business plan to run it for the foreseeable future.

Adventist Health, which operates more than 20 hospitals along the West Coast and in Hawaii, has signed a letter of intent to reopen the hospital that relies on the state loan and other funding. The nonprofit company runs several other hospitals in the Central Valley. The earliest reopening would be early next year, and in the meantime, uncertainty has kept hospitals elsewhere in the region from staffing up to accommodate spillover patients.

“We don’t have all the answers and we don’t pretend we do,” said Kerry Heinrich, the company’s chief executive officer. The eventual decision will be made by Attorney General Rob Bonta (D), whose office must review the terms of any takeover proposal for potential antitrust issues.

“I think we’ll get there,” Heinrich said. “But there is not one single factor that if fixed will make this work. The question fundamentally is how do we fund rural hospitals, inner-city hospitals? How do we create a viable structure going forward?”

As part of the final state budget, state lawmakers also approved one of the largest increases in years in the rates that Medi-Cal will reimburse hospitals for services. The move is particularly important for rural counties: While about 40 percent of California’s population is covered by Medi-Cal, the rate in Madera is nearly twice that.

And, beginning next year, all of California’s more than 2 million undocumented residents will be eligible for coverage under Medi-Cal, adding another 700,000 undocumented residents to the state insurance plan, meaning hospitals will no longer have to absorb their costs.

“We’ve addressed eligibility, we’ve addressed reimbursements, and we’ve addressed access,” said Mark Ghaly, secretary of the state Health and Human Services Agency. “All of these are going to be important in making the rebirth of rural health-care in Madera and other communities like it possible.”

Founded in 1971, Madera Community crumbled with stunning speed.

With a Latino majority, many of whom work long, exhausting hours in the fields, the county has almost twice the poverty rate as the state average; its household income is 20 percent of the state average. The rate of uninsured residents also exceeds the state average.

Despite those economic challenges, Poythress, the county supervisor, said the independent hospital was “marginally profitable” before the pandemic. Since its closure, the county has given the hospital $1 million to maintain the electrical plant, equipment, boilers and a skeleton staff with the hope of making its eventual reopening easier to navigate.

The hospital was overwhelmed when covid-19 swept through a population that already suffered disproportionately from respiratory problems due to unhealthy air quality. More than 55,000 cases, about a third of the population, have been reported in Madera County. The virus killed 377 people.

“The poorest got the sickest in Madera,” said State Sen. Anna Caballero, a Democrat whose district includes this community. “It was a perfect storm.”

The exodus began with the nursing staff. Many left in the first months of the pandemic for higher-paying urban hospitals, forcing Madera Community to bring in traveling nurses at three times the cost. Doctors left, too.

By the end of last year, hospital administrators were seeking partners to keep the doors open.

A near-deal with Trinity Health, which operates Saint Agnes Medical Center in Fresno about 25 miles to the southeast, floundered despite an initial $15 million cash injection from the company to maintain operations. Now the company is a creditor in the bankruptcy proceedings.

Madera Community shut its doors and those of its satellite clinics the first week of January and, according to court filings, owes creditors about $35 million. It filed for bankruptcy protection in March.

“This situation is not unique to Madera,” said Simon Paul, the county’s health officer. “The only thing special in this case was how quickly it collapsed.”

Caballero said hospitals in several rural counties, including some in the Salinas Valley to the west, are struggling to stay afloat. Among other measures, she is advocating for the opening of the San Joaquin Valley’s first medical school, creating teaching hospitals in places like Madera to address staffing shortages. One possible location for the new medical school would be University of California at Merced, about 40 miles northwest of here.

“It is important that California has recognized that all residents must be covered by insurance,” Caballero said of the inclusion next year of all undocumented residents. “But if you can’t find a doctor, it doesn’t do much good. And right now it is very hard to find a doctor in rural California.”

Madera Community’s closing has reverberated across this midsection of the San Joaquin Valley, a region plagued by some of the nation’s worst air quality. The valley, which produces a large proportion of the nation’s food, often captures Los Angeles-area smog from the south as well as airborne dirt and dust from the endless acres of dry fields.

Hospitals in Fresno, the closest to Madera, were strained before the one here closed. Now, public health officials and medical administrators say, some are operating at 130 percent of capacity as they try to absorb the additional patients from Madera.

“It’s like covid never went away,” said Paul, Madera’s public health officer. “You may be there for days waiting to see a doctor.”

A few months ago, Feliza Cruz rushed her father, Jose, who worked for many of his 93 years harvesting table grapes and almonds in Madera County, to the emergency room at Fresno Community Hospital.

“He died in a hallway outside the ICU,” said Cruz, who is 47 and works for the local nonprofit Vision and Commitment. “There was no room.”

Doctors and medical administrators say it is difficult to determine how many, if any, sick Madera residents have died as a direct result of the delay in reaching an emergency room. Some who have died were, like Cruz’s father, old and very ill.

“But he would have had better care if he’d reached a doctor sooner,” Cruz said. “It would have been faster.”

Mohammad Ashraf, a cardiologist whose office shares a parking lot with Madera Community, said five of his patients have died on the way to hospitals in Fresno, acknowledging that all of them were sick and uncertain to survive even if the local emergency room had been open. But, he said, “they probably would be living today.”

The hospital’s closure has also prompted the departure of the area’s specialists, who no longer have a place to perform certain tests and procedures. Obstetricians, general surgeons, and cardiologists are among those who have left in the largest numbers.

“Poor patients not only don’t have a place to go, but they don’t have a doctor to go to,” Ashraf said. “Most of my patients don’t even drive.”

Ashraf has practiced medicine in Madera for more than four decades. He arrived as a young doctor, sponsored by Madera Community as part of a program to recruit specialists to rural counties.

“I owe them for that reason,” said Ashraf, explaining why he has stayed despite a sharp drop in patient referrals.

A nonprofit network of health clinics has expanded rapidly in recent months to provide some of the lost services, earning broad praise from community and elected leaders for its work.

Camarena Health served 58,000 people on the eve of the hospital’s closing, and literally overnight had to take on an additional 7,000 patients suddenly left without doctors.

“The question immediately was ‘what are we losing that we need and that our patients need?’” said Paul Soares, Camarena’s chief executive. “Then we had to figure out what gaps we actually could fill because we are not a hospital.”

Monica Martinez, a physician’s assistant in Camarena’s women’s health clinic, said she is sometimes triple-booking patients, trying to absorb women who saw other doctors before the hospital’s closing. The wait time for a routine appointment, she said, has grown from three weeks to six weeks.

“We’re trying to squeeze in the women most in need,” said Martinez, 42, who has worked for Camarena for six years. “But the less urgent now get pushed back.”

For the Madera hospital’s former patients, the round-trip to Fresno for checkups and other non-emergency procedures means spending scarce time and money.

Ada Espinoza fractured her pelvis in a car accident several years ago, and she has been prescribed strong medications that make it impossible for her to drive to regular appointments in Fresno.

A round-trip on the Ride-On shuttle service costs $100, which she pays on top of out-of-pocket costs of $320 for each appointment. Before her accident, her income working at a local grocery store was just above the level that would have allowed her to qualify for Medi-Cal coverage and now, unable to work because of her injury, she receives about $350 a week in disability payments. She said her once monthly medical visits now consume more than a quarter of her monthly income — when she can schedule them at all.

One option to cut costs is to stop taking the medication several days before each appointment, which now take up to six months to secure. The side effects: pain and disorientation.

“So many of us now rely on Fresno,” said Espinoza, who is 50 and lives alone.

“But many of us are also scared to drive there along these roads full of trucks, to pay a lot for the Ride-On there, and of the long wait once we are there. But who else will take me? My dog can’t drive.”