Four years ago, our community came together and fought to save Watsonville Community Hospital from closure. Donors, healthcare workers, residents and local and state leaders helped return the hospital to public ownership because we understood what was at stake.
Without a hospital in the Pajaro Valley, thousands of residents would be forced to travel farther for lifesaving care. Seniors, farmworkers, low-income families and people who depend on Medi-Cal (California’s version of the federal Medicaid program) would be hit hardest, while neighboring hospitals would struggle to absorb more than 36,000 emergency visits annually.
Since the public purchase of the hospital, we have worked toward a sustainable future. Voters approved Measure N, providing $116 million for buildings, safety improvements and medical equipment—funds that cannot be used for operating expenses, per state law. We purchased the hospital property, expanded access to primary care, invested in new imaging and surgery equipment, and improved patient safety and satisfaction.
We now hold our county’s highest hospital safety and patient ratings, and we are proud to provide excellent care for everyone who comes through our doors.
The vast majority of our patients—about 85%—are on government insurance like Medi-Cal and Medicare. These insurance programs pay our hospital far less than real the cost of care and make it challenging to sustain services. Despite this, we were heading in the right direction before a flurry of challenges knocked us off course at the end of 2024.
Starting next year, the obstacles in front of us will grow substantially.
The federal legislation H.R. 1, also known as the Big Beautiful Bill, will make major changes to Medi-Cal beginning Jan. 1, 2027. The changes include new work-reporting rules, more frequent eligibility checks and less retroactive coverage. It’s projected that the work requirements alone could cause 1.1 million people to lose Medi-Cal in California in the next three years. Our early estimate is that H.R. 1 could cost Watsonville Community Hospital $4 to $6 million each year.
The need for care does not end when people lose insurance. Many people delay care until they are sicker, then turn to emergency rooms that provide care even when nobody fully pays for it.
Watsonville Community Hospital is not alone in this moment. Hospitals and healthcare systems across California face a growing crisis as federal decisions reduce funding, increase the number of uninsured patients and place more pressure on safety-net providers. Other healthcare districts are reviewing services, controlling costs, pursuing partnerships and reshaping their operations.
A year ago, the hospital district Board of Directors came together to explore partnerships. That work continues today. Earlier this year, we also established a committee to review our service lines and develop growth initiatives. It is now time for us to take strategic action—not because our progress over the past four years has failed, but because protecting the hospital requires us to respond to a changing environment.
The board has begun a public conversation about how we prepare. At a meeting on Sept. 2, we reviewed the changing healthcare landscape, discussed our responsibilities as a public board and began developing a framework for the difficult decisions ahead. No service changes were proposed. Rather, this meeting served as the first step in work that will continue this fall.
Before considering options, we must agree on the criteria by which they will be judged: patient safety, access to essential care, effects on employees and Pajaro Valley families, long-term financial sustainability, and whether regional providers can help meet the need. The board will hold a second meeting on Sept. 22, at which time board members will use that framework to examine the hospital’s finances, operations, services and potential partnerships.
These decisions cannot be made by the hospital alone or behind closed doors. The county, health plans, other hospitals, and state and federal leaders share responsibility for regional access to care. Our meetings are open to the public. We will share information, listen to the community and explain how the options measure against the criteria we establish.
I want to be direct and transparent: no decisions have been made, but this process could result in changes or reductions to services.
We are beginning this work now so Watsonville Community Hospital is resilient when federal healthcare cuts take effect in January. Our community and partners fought hard to save this hospital, and the board has carried that fight forward as challenges have mounted. That fight is not over. Our hospital remains worth fighting for, and we will act early, carefully and openly to protect our community’s investment and preserve essential care.
Tony Nuñez is chair of the Pajaro Valley Health Care District Board of Directors and Watsonville Community Hospital.
