The El Centro Regional Medical Center has a new CEO, but Imperial County’s largest hospital remains in dire financial straits.
Pablo Velez, who previously headed Sharp Chula Vista Medical Center, will lead the hospital as it grapples with the possibility of running out of cash in mere months. He will report to UC San Diego Health, which expanded its longstanding relationship with El Centro Regional by taking over operations in February.
But the latest audit, presented to the hospital’s board last week, continues to sound the alarm. Auditors raised “substantial doubt” about whether the facility can continue operating: It lacks recurring income sufficient to meet operating costs and its debt payments.
The city-owned, 161-bed facility has been reeling from rising costs and declining revenues since it was badly hit by the COVID-19 pandemic. In March alone, the hospital had a $1.2 million net loss, despite officials reporting that it was their best month so far this fiscal year.
In a conference call earlier this month, UCSD Health CEO Patty Maysent described a potentially “devastating” future for the 180,000 residents in Imperial County: El Centro Regional and the region’s other hospital, Pioneers Memorial in Brawley, are facing poor finances.
If both closed, residents in the county — one of the poorest in the state — would be forced to travel some two hours away to reach a hospital, Maysent said.
Imperial County, which already suffers from a lack of resources and poor health factors, saw some of the highest hospitalization rates in the state early on during the pandemic. It experienced exorbitant costs while the pre-pandemic trend of residents taking their money outside of the region for services persisted.
For services that are provided in the county, 80% is covered by public health insurance such as Medi-Cal and Medicare — both programs that reimburse hospitals less than actual cost of providing care. California pays about 74 cents for each dollar it costs to care for Medi-Cal patients, a rate that has not been adjusted in over a decade.
“Under no scenario is there enough levers to pull to make (El Centro Regional) sustainable long-term in its own accord based on the current economic environment,” Maysent said.
But the facility is not alone in its financial troubles: One in five hospitals across the state is at risk of closing, according to an April report commissioned by the California Hospital Association. More than half of hospitals are operating at a loss.
“Health care in those communities is eroding slowly in some places as we are losing certain services, as hospitals try to make ends meet, whether that's closing obstetrical care, behavioral health services, or others,” said Carmela Coyle, the Hospital Association’s president and CEO.
“And in other communities, the services are being lost all at once.”
The report also found “significantly elevated” hospital expenses that have persisted even after the height of the pandemic — $23.4 billion higher in 2022 than pre-pandemic levels statewide — even as hospital patient volumes are lower than what they were before COVID-19.
There has been a “significant rise” in the average length of stay, the report noted, suggesting that patients have more severe health needs and that labor shortages have prevented timely discharges.
“Every single day that passes without action is a day that more and more hospitals in the state are taking the next step toward the edge of their survivability and toward the edge of access to care for their communities,” Coyle said.
The Hospital Association has called on the state to provide hospitals with $1.5 billion in one-time relief funding, pointing to the risk of additional closures. The request, however, comes as the state faces a budget deficit.
State legislation, introduced earlier this year by Assemblymember Eduardo Garcia, a Coachella Democrat, also would combine Imperial County’s hospitals into a health care district and put a publicly elected board in control of all assets.
Supporters say the bill would preserve health care services in the region and lower administrative costs. But Pioneers has formally opposed the legislation as it’s written. And if approved, the process could take years, and still would require approval by county voters.
El Centro Regional leaders say they remain encouraged by recent moves to keep the hospital afloat, including Velez’s hire.
“Pablo is here to take us into this next chapter, into this portion where we still have to run this hospital, even though that legislation is in play,” said El Centro City Councilmember Tomás Oliva, who serves as the hospital’s board president. “He will certainly be taking care of the day-to-day operations of the hospital while the Board of Trustees, with myself and my colleagues here at the table, as well as our colleagues throughout the region, continue to advance that legislation.”
Velez has more than four decades of health care experience and a doctorate degree in nursing from the University of San Diego. For some 25 years, he served a border community population at Sharp Chula Vista, the largest health care provider in southern San Diego County.
