-July 7,2022-
VISALIA, CA –Like other hospitals across California, the Kaweah Delta Health Care District (Kaweah Health) Board of Directors has approved their 2023 operating budget with an operating loss for the coming fiscal year – the first time in Kaweah Health’s history. The new budget, which becomes effective July 1, projects an operating loss of $11.2 million for the fiscal year and it comes on the heels of a projected $17.9 million, COVID-driven operating loss for the fiscal year that ended June 30, 2022 ($35.8 million operating loss less $17.9 million in provider relief funds received from the CARES Act and American Rescue Plan Act). Despite the financial challenges, the Board and CEO say they are holding firm on providing annual employee pay increases and are unwilling to reduce employee benefits or to limit access to care.
“We are a compassionate and grateful organization. We want to continue to be a great place to work and we want to continue to attract and retain the very best employees to care for our community. The South Valley is already underserved medically, and we decided against closing services and further reducing access to care, even if some of those services lose money,” said Gary Herbst, Kaweah Health’s Chief Executive Officer. “While we have cash reserves to cover a bad year or two, it reduces our ability to invest in facilities and equipment, as well as our ability to borrow money. These losses are not sustainable in the long term.”
Kaweah Health is not alone. More than 51 percent of California hospitals are losing money. According to a recent study conducted by national consulting firm Kaufman Hall, California hospitals lost more than $20 billion in 2020 and 2021 due to COVID. These losses were only partially offset by $8 billion in Federal provider relief funds.