‘Right decision’ or ‘bad management’? Supervisor candidates spar over closed Madera hospital
Cecelia Gallegos, the challenger in Madera County’s District 3 race, thinks the Board of Supervisors used too many public dollars trying to keep the county’s only hospital from closing indefinitely. She thinks the county should guard against any potential future health care failures by creating a special district hospital that is approved and funded by the voters.
She’s saying this because of Madera Community Hospital’s financial collapse and closure in January 2023, and almost year-long bankruptcy proceedings that followed. The hospital made progress in February toward a potential reopening when a federal bankruptcy judge approved its management agreement with its new partner, American Advanced Management Inc.
The incumbent in the race, Supervisor Robert Poythress, says the county never ruled out the possibility of a district hospital. But Poythress, who’s been supervisor in District 3 since 2017, cautioned about trying to launch a new project while at the same time trying to save another.
The county’s District 3 includes most of the city of Madera: Almost all of the city west of Highway 99 and a sliver of the city to the east of the highway. Because this county district is largely covered by city land, solutions to some of its issues are handled at the city level. But when Madera hospital went into crisis mode, its leadership called upon the county to help keep it from a point of no return.
This race could be decided Tuesday.
The Board of Supervisors allocated federal dollars from the American Rescue Plan Act, known as ARPA, to try to save Madera hospital. A state-provided fund has helped reimburse some of those federal dollars. In an interview with The Fresno Bee, Gallegos criticized the county board’s decisions to provide those dollars in the first place, calling them a payment of taxpayers’ money to a failing operation.
“The hospital is something that is a sinking ship,” she said. “If the sky is falling, we should have heard long before they were at that point.”
Poythress told the Bee that the possibility that the hospital reopens late this summer is evidence that funding it over the past year was the right move.
“Without us funding that, it’s game over for the hospital,” he said.
Their stark difference in opinion on allocating public dollars to the hospital is one example of where two candidates who are Madera County through and through diverge politically. It’s also one of the issues that led to their race.
ARPA funds, Madera Community Hospital
The county gave the hospital $150,000 in Coronavirus Aid, Relief, and Economic Security Act money and $350,000 from its general fund during the pandemic in 2020.
It then gave $1 million in ARPA funds in July 2022 to pay for upgrades to the hospital’s pharmacy, and another $439,183 last May for a consultant to report reopening and health care delivery scenarios, and help with its application to the state’s distressed hospital loan program. An allocation last May of $100,000 in ARPA money also helped pay for the renewal of the hospital’s license.
In August, the county allocated a total of $1 million in ARPA money to cover the hospital’s basic operating costs, called the burn rate, through September. The county then began using a $5 million state-provided fund to pay for the burn rate, which it will do at least until March 24, when the hospital’s new partner, American Advanced Management Inc., will take over management. The county also used that money to reimburse all of the ARPA funds it had used for the burn rate.
The court ruling Feb. 13 that approved AAMI’s management agreement with Madera hospital was, in effect, a denial of a last-minute proposal by UC San Francisco to buy the shuttered hospital. The Board of Supervisors supported the university’s attempt to buy the hospital and has also said it will support AAMI as it progresses toward a potential reopening this summer.
If AAMI does begin managing Madera hospital March 24, the county will commit the remaining $750,000 in state dollars to help the partner reopen the hospital. If the partner doesn’t assume management on that date, the county will continue to use the state funds to pay for the burn rate.
Poythress said the funding for the minimal operating costs have mostly kept the air handlers and boilers going. The hospital’s creditors took for themselves the money coming into it from insurance companies that owed Madera hospital, he said.
If the air handlers and boilers stopped working, it would cost exponentially more to reopen the hospital due to possible contamination, Poythress said.
But Gallegos questioned why the hospital’s CEO continued to receive a salary — Poythress called the paid employees a “skeleton staff.” Gallegos also described the region-wide strain on hospital resources that have resulted from the hospital’s failure.
“It’s not a good situation,” she said. “Things like that really bother me to the point where I’m stepping up now.”
Gallegos believes Poythress should have abstained from voting on the funding because he also sits on the hospital’s Board of Trustees.
“There was no conflict,” Poythress said, because he received no financial compensation from the hospital as a member of its board. “It was completely clear with our (county attorneys) and I made sure that was the case.”
His votes to fund the hospital, he said, were those of a concerned county supervisor and community member who cares about seeing it reopen. He is confident that will happen this summer.
To Gallegos, the increasing amount the county used to help the private non-profit hospital was “bad management.”
“If Walmart were in trouble, we could not give Walmart money,” she said. “We couldn’t give them assistance because the money comes from the taxpayers, so we have to use it wisely.”
County supervisors hoped city councilmembers would also vote to help keep the hospital afloat when they sent a letter to the city of Madera in August requesting that it also allocate some of its $23 million in ARPA money toward that end. Poythress pointed out that, despite its residents being the hospital’s main clientele, the city “has given no funds to help open up the hospital.”
County board conversations around hospital funding last summer stressed that it was an issue for the whole community, and that the county should not have had to take the lead alone.
Gallegos said the city decided not to allocate $1 million of its own ARPA money because the hospital’s leadership was not being transparent about its financial activity. The council had questions about why the hospital’s CEO was still getting paid and wanted to see financial statements covering the months before the hospital went into bankruptcy, she said.
“I can’t vote yes if I don’t know how they ended up bankrupt and what their plan is,” Gallegos said.
She believes that, even if the hospital does reopen this summer, there should be another option. She said the city, while choosing not to provide funds for the hospital, hoped to partner with the county to let voters decide whether they want to fund a hospital district, also known as a health care district.
“Let’s use that money for something we think we can make better and build a hospital that the residents are OK with,“ Gallegos said. “Let the residents decide. I’ve had residents come up to me and say, ‘I’ll take $50 out of my check every month if that’s what it takes to keep a hospital here in Madera.’”
Poythress said taking a hospital district initiative to the voters is an option the county has kept on the table throughout the past year, even as supervisors hoped to see Madera hospital reopen.
“It’s still something that we’re talking about,” Poythress said. “But we want to take things in. It would be putting the cart before the horse to be thinking about a district hospital before things continue to move forward for American Advanced (Madera hospital’s new partner).”
Gallegos thinks it is possible to work on both launching a hospital district initiative and looking forward to AAMI’s management of Madera hospital. She said that would be “fiscally responsible and looking ahead, so we’re not backed into a corner in the future.”
“What if AAMI fails?” she said. “If it fails, then we have to start the district process from scratch.”
Poythress said AAMI is making progress toward a reopening, and reiterated that the choice to fund Madera hospital long enough for it to find a partner paid off.
“If we didn’t fund the burn rate, they wouldn’t be opening up in four months,” he said. “It turns out it was the right decision.”
