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Ridgecrest Hospital takes steps to offset financial losses

Ridgecrest Regional Hospital Board of Directors (RRH)–

On June 8, 2023, Ridgecrest Regional Hospital Board of Directors submitted the following letter.

You may have heard that California hospitals, especially those in rural communities, are under tremendous financial strain that has resulted in closures and massive reductions in service.

The fiscal toll of the 2019 earthquakes, followed closely by the demands imposed by the COVID-19 pandemic, resulted in severe increases in costs for goods and services. Recent impacts from inflation have exacerbated these issues. Hospitals like RRH are largely reliant on government cost reimbursements from Medi-Care and Medi-Cal, as well as from proceeds from private insurance. Unfortunately, these programs often do not cover the costs of the services provided, leading to unrecoverable losses.

Members of the Ridgecrest Regional Hospital Board of Directors exist to ensure that the decisions made at our hospital result in the greatest access to quality service for our residents. To that end, RRH leadership has been taking steps to offset losses and working with our elected officials in both Sacramento and Washington, D.C., to ensure that we retain this critical asset for our community. But the cumulative deficit from unreimbursed costs and a lack of funding for mandated upgrades have taken a severe toll on cash reserves.

In order to continue critical services for our community, we have explored affiliation with a larger health system, with the current challenges facing most California healthcare providers that do not appear probable in the short term. We have also looked at establishing or joining a healthcare district to receive additional federal and state funding; that initiative is continuing. We continue to look at other options that might allow us to improve our ability to weather the current threats to small, remote, independent hospitals.

The recent hospital relief bill passed with the help of Sen. Shannon Grove could be a critical step on our path to recovery. The California legislature has approved a hospital loan program for distressed hospitals. Unfortunately, it is only a temporary solution. And based on new developments, RRH may not even be eligible to benefit from it. We cannot allow the legislation drafted to protect hospitals like ours to be diluted to benefit large and profitable facilities. We are fighting for our existence — they are not.

RRH needs immediate relief to continue operations and sensible reforms in Medi-Care and Medi-Cal reimbursements for long-term resolution. To that end, RRH will continue to press for changes in these programs.

As we witness the closure of facilities like Madera Community Hospital and see the imminent threats to Hazel Hawkins Memorial Hospital and others, we must rally to protect RRH. We are not only the only full-service hospital for an hour or more in any direction, we contribute to the economic health and quality of life that our community and region have come to rely on.

We thank our entire staff for continuing to work through extremely difficult circumstances and our community for their patience and support as we navigate the crisis. We will provide updates as they become available and advise the community as to how they can continue to advocate for our community.