The Tulare Local Health Care District (TLHCD) is under the gun as it faces a set of yearly deadlines demonstrating the expansion project at the Tulare hospital – owned by the district and operated by Adventist Health – is making significant and ongoing progress.
Meanwhile, the State of California legislature approved a loan package Thursday, May 4, to bolster the budgets of financially struggling health districts, including Visalia-based Kaweah Health.
Annual Reporting Protects Public Investment
A shift in state law means hospitals currently working to upgrade their facilities to meet new seismic requirements must complete at least 10% of the project each year or lose certification. This is according to Kevin Northcraft, president of the TLHCD Board of Trustees.
“There’s an indication from the state we need to make progress on it,” he said. “We’re looking into what’s required.”
The expansion project at Advantist Health Tulare hospital is a multi-story tower block attached to the main hospital building. Funding for the project was approved by voters in 2005. The project stalled during its first decade of construction, and progress since has been painfully slow.
The cost of completing the tower project has been estimated at $125 million. The original $85 million raised for tower construction through the sale of bonds in 2006 has been spent.
The directive demanding proof of ongoing development comes from the state’s Department of Health Care Access and Information (HCAI) – formerly the Office of Statewide Hospital Planning and Development (OSHPD), which is now a department within HCAI – and its intended to ensure voter-approved funds are spent appropriately.
Tower Progress is Ongoing
According to Northcraft, the district has been making slow but steady progress toward finishing the tower. It was recently painted, he said, and work is underway to complete installation of the building’s elevators.
The board president said TLHCD is unlikely to find itself in trouble with HCAI.
“I don’t think it’s going to be an issue, but we’re taking it seriously,” Northcraft said.
Complicating the situation for district officials is a lack of details regarding their responsibility to report. For instance, district officials don’t know when the year reflected in the report started or when it ends.
“We’re not even sure,” Northcraft said. “What I heard today is maybe by April of next year.”
Bruce Biggar, a member of the field staff from the OSHPD who is overseeing the tower project for the state, confirmed the TLHCD has not lost certification for the project. There appears to be communication issues between the state and the district.
A report filed by Biggar on April 4 showed TLHCD did not respond to a field visit report issued a month earlier on March 1. The March 1 report showed a lack of updates from TLHCD on the project’s status.
“Has any work been performed since 12/31/2022?” the report asks.
Biggar was unable to comment on specifics of the project from the state’s perspective. A call to his office’s public information officer was not returned by publication.
Biggar, however, said the TLHCD has not lost state certification of the tower expansion project. At one point, district officials seemed unsure. At least they know how to calculate the 10% progress expected by the state.
“It’s not based on money,” Northcraft said. “It’s based on construction completion.”
The latest percentage of completion for the tower project, as noted in state records, is 46% complete.
Funding the Tower
Other uncertainties still plague the trustees, specifically how to pay for the project.
If the $125 million estimate for finishing the project is correct, the TLHCD is looking at coming up with a tenth of that a year, $12.5 million annually, to avoid decertification. In December of 2021, the district received $6 million in COVID-19 relief funding from the state, earmarking it for the tower.
More recently, the district received final court approval for a $3 million settlement from their suit against attorney Bruce Greene and his firm, Baker Hostetler. Other defendants in the lawsuit, former district board members Parmod Kumar, Linda Wilbourn and Richard Torrez, have not been settled and remain active in the Kern County Superior Court. How the $3 million will be spent has not been discussed officially by the trustees.
A criminal case against Greene in the Tulare County Superior Court also remains active as of January.
In the search for funding, Northcraft said the district is in talks with state legislators and the Association of California Healthcare Districts to see what help might be available.
“We’re waiting,” Northcraft said. “Adventist Health is looking at options on how they can help us.”
Money for Kaweah Health
Finances have been extremely tight at the Kaweah Health Care District, to the point concerns about the district’s ability to continue operating. In December, Madera Community, a private, nonprofit hospital, shut its doors. An Associated Press (AP) report on Thursday said Kaweah Health continues to face a similar dire financial situation.
According to the AP, Kaweah Health is one of four hospitals that has “teetered on the brink of collapse.”
Hoping to prevent a repeat of the closure of Madera Community, state legislators voted on Thursday to approve an emergency loan program for hospitals in financial distress. The program, if approved by the governor, would provide $150 million in loans. Gary Herbst, CEO of the Kaweah Health Care District, told the AP the district needs a cash infusion of $50 million – one-third of the project’s funding – to have “some breathing room.”
In response to the loan bill’s passage, Kaweah Health issued the following statement:
“We are grateful for the passing of SB/AB 112 by our legislators and the emergency funding it provides,” said Herbst. “Hospitals like Kaweah Health with high Medi-Cal rates suffered some of the biggest losses in the state. This funding is an important step in keeping hospitals open and helping them get back on their feet. We look forward to the future work of our legislators to bring long-term support in the form of higher Medi-Cal reimbursement rates.”
The statement also said the district will continue operating in the red through much of 2023, but will near “break-even” by the fourth quarter.