Sacramento, CA–Governor Gavin Newsom is announcing nearly $300 million in zero-interest loans to 17 community hospitals across California. The funding was made possible through the Distressed Hospital Loan Program created in partnership with the legislature.
“Across the country, community hospitals are experiencing financial stress like never before. These hospitals are often the only acute health care access point in their area,” said Governor Newsom. “In partnership with the legislature, we are working to keep the doors open so Californians can access critical care close to home.”
Many of the community hospitals being supported today across California are in more rural areas of the state, serving communities with lower income, and communities of color. Keeping these health care access points open means Californians can continue to access the health care services they want or need in their community.
In May, as part of early budget action, Governor Newsom announced the creation of the Distressed Hospital Loan Program (DHLP) for an initial $150 Million. Governor Newsom brought an additional $150 Million into the program through the Managed Care Organization (MCO) Provider tax, doubling the financial support available to these critical facilities. The DHLP focuses on certain public and nonprofit community hospitals that are experiencing the most severe financial distress – using the funds to either reopen a recently closed facility or keep a facility on the brink of closure or reducing its services from closing. The Department of Health Care Access and Information and the California Health Facilities Financing Authority (CHFFA) at the California State Treasurer’s Office will jointly administer the program. The two departments have notified the eligible hospitals what loan amounts they have been awarded, with the loans scheduled to be released in the coming weeks.
