Emergency Bill Signed by Governor Newsom to Provide $150 Million in Assistance to Struggling Hospitals

This bill aims to address the potential closure of hospitals in the aftermath of the pandemic by providing up to $150 million in zero-interest loans.

In response to the financial crisis faced by nonprofit and public hospitals in California, Governor Gavin Newsom has approved an emergency bill known as Assembly Bill 112

The newly established Distressed Hospital Loan Program will play a crucial role in supporting struggling hospitals and facilitating the reopening of recently closed healthcare institutions. The program will be administered by the Department of Health Care Access and Information in collaboration with the California Health Facilities Financing Authority.

Governor Newsom emphasized the urgency of this initiative, stating that it would offer swift assistance to hospitals in severe financial distress. He also expressed his commitment to working closely with hospitals across the state, ensuring that communities can access essential care and services without any disruptions.

The closure of Madera Community Hospital earlier this year, leaving a county of 160,000 residents without a local emergency room, prompted legislators to expedite action on the emergency bill. Subsequently, Beverly Hospital in Montebello filed for bankruptcy, further highlighting the financial challenges faced by healthcare institutions.

Several other hospitals in California are also experiencing financial difficulties

Including 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 these hospitals were already struggling before the pandemic and have faced additional cash flow issues after the cessation of federal COVID relief funds.

Republican Senator Brian Jones, representing east San Diego County, urged Governor Newsom to sign the emergency bill, emphasizing the precarious situation faced by distressed hospitals. The approval of this legislation will provide much-needed support to these struggling healthcare facilities and help ensure that they can continue serving their communities.

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