Board backs loan to maintain emergency room ops at bankrupt Blythe hospital

RIVERSIDE, Calif. (KESQ) - The Board of Supervisors today approved a $1 million loan and hands-on assistance from Riverside County agencies to keep the doors open to the emergency room at bankrupt Palo Verde Hospital in Blythe.

"This represents the county's effort to preserve emergency medical care in the Palo Verde Valley,'' county CEO Jeff Van Wagenen said ahead of the board's 5-0 vote Tuesday. "The county provides safety net services across all of the county. We hope to stabilize the emergency department and make an assessment regarding next steps, then bring recommendations back to the board in the very near future.''

The loan agreement with the Palo Verde Healthcare District "does not solve every challenge the district faces, but it provides us breathing room to work on long-term solutions,'' district board Clerk Joanna Gonzalez told the supervisors.

Without emergency services at the Blythe facility, the area's roughly 20,000 residents would lose access to "timely treatment for life-threatening conditions where minutes matter,'' according to a statement posted to the board's agenda.

Less than two weeks ago, 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 health care "strike force'' to develop an action plan for solving the hospital's dire financial straits. Palo Verde Healthcare District administrators immediately accepted the offer.   

The district has only a few days' cash on hand to fund operations, according to officials. The loan will be available to the district as soon as it establishes a stand-alone bank account for deposit of the seven figure sum, which will be drawn directly from the county General Fund.

Van Wagenen said the strike force will be composed largely of staff from the Riverside University Health System. They'll spend the next six months conducting evaluations and identifying practices centered on rectifying deficiencies to, at minimum, restore the emergency department's solvency.

The monetary agreement specifies the county will have ``first priority'' status among the health care district's creditors and will 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 are required.

However, starting in October, initial payment on loan principal will be necessary. A 3% annual interest rate would be assessed beginning January 2027, and the $1 million will have to be fully amortized by October 2031.

Without the hospital, the nearest option for emergency health care would be more than 70 miles away.

In a statement on Jan. 15, 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 while efforts were made to stanch 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 will pay for staff salaries and benefits, pharmaceuticals, equipment purchases, utilities, billing operations and some legal expenses associated with Chapter 9 proceedings.

Van Wagenen emphasized that the health care district's board of governors is independent of the county, its members elected by voters in and around Blythe. Neither he or Perez mentioned the possibility of a wholesale county takeover of the hospital's emergency department, though the prospect may surface as a long-term solution.