FRESNO, Calif. (KSEE/KGPE) – The chief executive officer of Tulare County’s Kaweah Delta Health Care District says the COVID-19 pandemic, and its aftermath, have brought district hospitals to the brink of financial collapse.

In an open letter to Governor Gavin Newson, Gary Herbst described the dire situation district hospitals like Kaweah Health are currently facing.

“I will use Kaweah Health to illustrate the dire situation that district hospitals currently face.” wrote Herbst.

Herbst says that since the arrival of the pandemic Kaweah Health has sustained a cumulative operating loss of $127 million through September 30, 2022 – and lost $29 million from operations in the first three months of their fiscal year.

In an interview with Herbst told us that this is due to many different factors, including having to close elective surgeries and procedures over the course of the pandemic in compliance with California’s executive order. There is also a decline in the number of patients as people still fear going to the hospital, and the care and treatment of thousands of severely sick COVID-19 patients – with almost no increase in reimbursement rates from Medicare, Medi-Cal or commercial payers.

One of the biggest challenges cited is filling hundreds of employee vacancies.

“We’ve had to go out and contract with traveler agencies to fill those positions. We are paying three to four times more per hour than we would pay someone under employment. Nurses left the profession during the pandemic or left their hospitals to become travel nurses,” said Herbst.

From March 2020 to September 2022, Kaweah Health had to spend over $80 million in contract labor, as well as $16 million in extra shift bonuses for employees who take on additional shifts.

In order to “right the ship” Herbst says that they have created a financial recovery plan, but that it won’t come without some pain and difficult work”. That pain includes the layoff of 100 employees from administrative and support positions, meaning that current employees would have to be asked to take on more work. Hospital executives have also agreed to take a 20% pay cut and will not receive a raise on January 1. Directors have also agreed to a 10% pay cut.

Herbst also revealed that they have eliminated 100 job openings and closed down services. The hospital is currently renegotiating virtually every one of its vendor contracts looking to find any wiggle room to save money.

Herbst highlighted that bedside staff would not be affected at any point by layoffs as they do not put at risk their ability to give safe, quality care.

“We will never compromise the health or safety or quality of the care we provide,” said Herbst.

Kaweah Health in Visalia has 613 beds and is a Level 3 trauma center, a teaching hospital, and is number two in the state in heart surgery. It serves a two-county population of approximately 600,000 people in the Central Valley.