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San Benito Healthcare Alliance (SBHA) and Ovation Healthcare submitted a letter of intent to Hazel Hawkins Memorial Hospital, making it the fourth takeover proposal the hospital has received since declaring bankruptcy last year. The hospital’s board of directors has yet to formally accept the letter and enter into a non-binding agreement.
According to the Jan. 25 letter, Ovation would manage the hospital, but no details are provided.
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File photo of Dr. Ariel Hurtado at the April 25 San Benito Health Care District Board of Directors meeting. Photo by John Chadwell.President of San Benito Healthcare Alliance Dr. Ariel Hurtado, who was previously on Hazel Hawkins’ board of directors, told BenitoLink the alliance is “a group of mostly doctors that practice in San Benito County. Our membership also includes nurses and other healthcare professionals that live in the county as well as concerned citizens.”
The SBHA-Ovation letter of intent is just one of four proposals being considered by the San Benito County Healthcare District, the hospital’s governing board. Also expressing interest in the hospital are American Advanced Management, Insight Foundation and a county-based Joint Powers Authority. So far, the district is reviewing the proposals from AAM and Insight.
San Benito Health Care District filed for Chapter 9 bankruptcy in May 2023 and is going through the court proceedings. SBHA and Ovation are proposing “an innovative collaborative approach” with the district board and Hazel Hawkins leadership, according to the letter of intent.
The letter states that San Benito Healthcare Alliance “is a community member organization made up of physicians, nurses, medical support staff, and business, financial, and community members to provide a diversified level of medical, operational, and financial experience not typically associated with a hospital operation.”
According to its website, Ovation Healthcare has been operating as a healthcare-focused management company for 45 years and has managed 45 hospitals nationwide; 27 of which are critical access hospitals, according to the letter of intent.
In the letter, Ovation said it will assess the hospital before it completes business and funding plans, which is expected to take at least 60 days.
“We have not received anything that clearly outlines the financial details of any substantive offer to take over the district,” Hazel Hawkins spokesperson Marcus Young told BenitoLink on Feb. 7. “Right now it is just too early in the process to weigh in [on the topic].” Young told BenitoLink on Feb. 13 the district will hold a special board meeting to discuss the letters of intent in the coming weeks.
The proposal provides some basic information the district requires in order for letters of intent to be considered.
The letter by SBHA/Ovation highlights:
- Its history in healthcare administration
- Proof of funds needed
- Adequate liquidity and financing
- Past experience stabilizing other distressed rural hospitals
- No record of rapid asset liquidation
- Understands general obligation of bonds
The Ovation Healthcare website says it is the “premier provider of shared services to independent hospitals from financial performance to purchasing and supplies, clinical resourcing, workforce solutions, technology services and executive advisement.”
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