When Madera Community Hospital abruptly closed its doors in early 2023, its ripple effects spread much farther than the immediate city and county that relied on its services.

The 103-bed hospital, which faced significant financial pressures for several years, will reopen today (March 18) under the management of Modesto-based American Advanced Management Inc. And when it does, it will provide at least a small measure of relief for a medical-care landscape in the Fresno-Madera area that continues to face more patients than there are available beds.

“Even though Madera Community is a smaller hospital, just the small impact of that closure on other hospitals is significant because the other hospitals are already completely over capacity almost every day,” said Dan Lynch, who heads the Central California Emergency Medical Services Agency for Fresno, Madera, Kings and Tulare counties.

“What (the closure) told us, and has really identified even as a larger issue, is that we just don’t have enough beds in the Valley,” Lynch added.

The closure of the Madera hospital’s emergency department on Dec. 30, 2022, the January 2023 shutdown of the entire hospital, and its subsequent bankruptcy left Madera County with only one functioning hospital – Valley Children’s Hospital, a pediatric facility that’s closer to Fresno than it is to the city of Madera. As a result, patients in Madera and the surrounding rural area needed to make longer drives – or take longer ambulance rides – to hospitals in Fresno.

“There was an obvious challenge in the delay of just getting quick, fast emergency care, so I think the community probably felt that the fastest,” Steve Stark, Madera Community’s chief executive officer, told CVJC.

“I think the community really saw what it felt like to lose a hospital,” he added. “And until you’ve lost a hospital, I think it’s hard for anybody to imagine what it means to not have a hospital.

Incremental Addition to Regional Hospital Beds

Madera Community’s reopening represents an incremental addition to the region’s available hospital beds.

The four nearest adult-care hospitals to Madera with emergency rooms – Saint Agnes Medical Center, Community Regional Medical Center, Kaiser Permanente Medical Center – all in Fresno – and Clovis Community Medical Center collectively have 1,642 licensed beds, according to the state’s Department of Health Care Access and Information. That doesn’t count Valley Children’s Hospital’s 358 licensed beds, which Stark said has stepped up to help serve adults in need.

For some Madera County residents, the nearest hospitals aren’t in Fresno, but in neighboring Merced County. For the community of Chowchilla, along Highway 99 near the Fresno/Merced county line, Mercy Medical Center in Merced is the closest hospital emergency room. In the western reaches of the county, near the towns of Firebaugh, Memorial Hospital in Los Banos is the nearest hospital.

Valleywide, nearly all of the three dozen hospitals with emergency rooms across the region are clustered in communities along the Highway 99 corridor. There is a paucity of hospitals – only two – on the vast western side of the Valley, in Los Banos and Coalinga.

Lynch said Saint Agnes Medical Center in north Fresno and Community Regional Medical Center in downtown Fresno, both about a 25-mile drive from Madera, picked up much of the slack from Madera Community’s closure.

Dr. Simon Paul, Madera County’s public health officer, said that the initial fallout from Madera Community’s closure was the sudden realization by residents that “the hospital isn’t there. Where do I go to the emergency room?”

But the bigger hole, he added, “is for the moderately sick.”

“If you’re super sick – car wreck, gunshot wound, unconscious – the ambulance picks you up and takes you to the nearest hospital,” Paul said. ‘And for a lot of those things, sometimes the best level of care was in Fresno anyway, a trauma center or stroke center.”

When Hospital Closed, Some Residents Delayed Care

For the abundance of patients whose conditions were less urgent but still require hospital care, the lack of easy access to a local hospital with an emergency room meant they sometimes put off needed care.

“There are people who didn’t have to go to the emergency room, but they could have,” Paul said. And if it’s nearby, they do, if it’s far away, they don’t. … Sometimes they show up in a hospital or an urgent care with their primary care doctors much sicker than they would have been if they could have gone to the ER.”

The effect of Madera Community’s closure wasn’t so much an avalanche of new patients flowing into emergency rooms at Saint Agnes or Community Regional, because a significant number of Madera patients were already coming to Fresno hospitals even before the closure, Lynch said. Some were because of doctor referrals, some because the hospital may not have been an in-network provider for their insurance coverage.

For example, Lynch said, about half of the Madera-area patients being transported by ambulance were already being taken to Fresno hospitals. “A lot of people don’t understand that was already the case,” Lynch said. “So when Madera Community closed, it wasn’t that all ambulances went to Fresno. … It was that all of the remaining ambulances went to Fresno, because half were already coming here.”

Even an incremental increase in patients from Madera was a strain, however, because Fresno hospitals were still dealing with COVID-19 patients as the pandemic began to wane.

Treatment for Inmates

Other impacts of the Madera hospital closure, which Lynch expects to ease when it reopens, are in less-obvious circumstances: psychiatric holds for mentally unstable patients that pose a danger to themselves or others, and treatment for inmates from the Madera County Jail as well as a pair of state prisons about 15 miles to the north in Chowchilla.

“When the sheriff’s office would place someone in custody, they would usually have to get a medical clearance of that patient, which was always done at Madera Community,” Lynch said. “Then all of a sudden, Saint Agnes is brought into the light now of clearing these jail prisoners, which is not something they would do, because they don’t do that” for Fresno County jail inmates.

As for patients coming from Valley State Prison or the Central California Women’s Facility, the two Chowchilla prisons, Madera Community had eight of its medical-surgical beds in a locked unit for the state Department of Corrections and Rehabilitation.

“When it closed down, all of a sudden, these prisoners are going to Community Regional Medical Center, and they’ve got enough to deal with,” Lynch said. After several weeks, Fresno County was able to engineer a deal with the state to divert the prison inmates to Mercy Medical Center in Merced, about 27 miles from Chowchilla.”

“You know, the grenade hits, and this is the flak that comes out from everything that gets hit with it,” Lynch said. “It was a chess game. It was quite the deal to protect the hospitals that were already under siege because Saint Agnes and Community Regional are the two busiest (emergency departments) in our area. They were both extremely busy at that time (when Madera closed), and they still are.”

Stark also mentioned the importance of getting Madera Community’s 22-bay emergency department back online. “The ERs right now in the surrounding hospitals are kind of overwhelmed,” he said. “That’s one thing, when a hospital closes, you still have the same amount of patients that need care.”

How Madera Fits Into Valley’s Health-Access Puzzle

Assemblymember Esmeralda Soria, D-Fresno, whose 27th Assembly District includes parts of Madera, Merced and Fresno counties, said she believes Madera Community Hospital illustrates the financial issues faced by small rural hospitals across the state.

“Madera’s closure is only a little glimpse of the challenges that exist in providing health care in rural parts of California, and I would say in rural parts of America,” where patients in government programs such as Medicaid and Medicare outnumber those with private insurance, she said. “A rural hospital is very different from a hospital in an urban community that has a better payer mix, and that’s a real challenge in the Valley where we have a lot of poverty.”

Madera Community’s closure woes were the first major issue confronting Soria when she took office in December 2022.

 “This hospital not only provided care for Madera County, but also surrounding rural areas outside of Madera where it was the closest, closer to them than Fresno,” she said. “And I knew it was going to take a Herculean effort to reopen it.”

Soria and one of her state Senate counterparts, Sen. Anna Caballero, D-Merced, co-sponsored legislation creating the Distressed Hospital Loan Program, which was signed into law in May 2023. Madera Community Hospital was approved in April 2024 to receive the single largest allocation, a $57 million interest-free loan to help it reopen, among almost $300 million in loans to 16 financially distressed hospitals statewide..

“We wanted to prevent another Madera Community Hospital situation,” Soria said of the loan program.

State Health Officials Give Green Light

Before it could reopen, Madera Community needed a green light from the state Department of Public Health. State officials commenced their required survey of the hospital on Feb. 10 for a comprehensive review of its readiness to open.

Stark said American Advanced Management has spent between $8 million and $10 million to remodel and modernize the hospital, which originally opened in 1971.

“This whole building definitely got a lot older sitting empty for two years than it normally would,” Stark said. “I don’t think there was a pipe in this building that, when we turned the water on, didn’t spring a leak”

According to the hospital’s reopening website, reviewers cleared the facility’s pharmacy, dietary services and intensive-care unit on Feb. 13. Sterile processing was approved the following day, and the 22-bed emergency department was cleared on Feb. 18.

State reviewers also surveyed the hospital’s therapy, case management, radiology, laboratory and risk-management departments, and provided information to Madera Community’s leadership on areas requiring additional attention.

Stark said he received the latest report from the state on Feb. 27 detailing issues that the hospital needed to address before reopening. In the meantime, the hospital was fine-tuning its procedures, and running drills of internal practices.

New Services Offered

A remodeled, reopened Madera Community will resume offering its medical-surgical, intensive care and emergency units and laboratory, radiology and pharmacy departments. Stark said Madera Community will also bring in new services for which doctors and patients now have to go to Fresno to receive: interventional radiology, neurology, expanded kidney dialysis, podiatry and a cardiac catheterization lab. A modern MRI, or magnetic resonance imaging, unit is also being designed to be housed in the hospital rather than off-site.

“In a way, we are trying to maximize all of the things that our area physicians have to send patients out of town to do,” Stark said. “We’re working with them to find out what are some of the problem points.”

The secured unit for state prison inmates will also be expanded from the eight beds it had before the closure to 12 when it eventually reopens. “We are working with the federal and the state prison systems to design the security mechanisms required for that,” Stark said. “It’s locked, it’s protected, it’s secure,” and it’s segregated from areas where non-inmates will receive care.

No Labor and Delivery Services at Hospital

Despite a broadening of services, Madera Community will become one of a growing number of hospitals in the state that no longer provide maternity care, such as labor and delivery services. Stark said the reimbursement rates paid by Medi-Cal – California’s incarnation of the federal Medicaid insurance program for low-income residents – fall well short of covering the cost for hospitals to provide labor and delivery care.

“Honestly, this hospital failed once, and a huge contributing factor was obstetrics and labor and delivery,” he said. “And I think if we tried to replicate that the same way with the same payer source, we would ultimately find ourselves in the same situation.”

That will leave Madera County among eight California counties – and the only county in the San Joaquin Valley – where expectant mothers have low or no access to maternity care at hospitals, according to a 2024 report by the March of Dimes on “maternity care deserts” in the United States.

The Public Policy Institute of California reported earlier this year that while the nationwide average travel time to the nearest hospital maternity services was about 15 minutes. But hospital closures and reductions in maternity care have increased the travel times, particularly in rural areas of the state. The PPIC analysis, based on data from the state Health and Human Services Agency, noted that Madera County is the only San Joaquin Valley county in which the average travel time for maternity care is more than 30 minutes.

Despite the lack of a labor-and-delivery unit, Paul said, Madera Community is aiming to provide more comprehensive services than it did before the closure. 

“My sense of what they’re trying to accomplish here is really just to have a broad array of the whole spectrum of services,” Paul, the county health officer, said. “So if you show up there, you can get the care you need. … So if you go to the emergency room, or your doctor sends you there, if you’re sick or you need surgery or a (heart catheterization) or an MRI, they want to have all that in place.”

That unity of services will be a key component of trying to win back patients who, over the past two years, have been going someplace else for surgery, specialist visits and other hospital services.

“Some people are now tied in with Fresno and they’ll probably stay tied in there,” Paul said. “But if you’re a specialist, with a cardiology clinic and things like that, they can tell a patient, ‘I can take care of you right here as opposed to sending you to Fresno.’ ”

Medi-Cal/Medicaid Reimbursement Concerns

The large percentage of low-income residents in Madera County and throughout the San Joaquin Valley amplifies the concerns over potential shortfalls between how much Medi-Cal pays providers for care and what it costs to provide that care.

“The reimbursements under those models don’t keep up with the expenses at the same rate,” Stark said. “So until that changes, you’ll see margins for hospitals that are disproportionately affected by government-source payment to continue to have smaller and smaller margins, all the way into negative margins. And that’s exactly what happened here” at Madera Community.

Statewide, just under 41% of California residents were enrolled in Medi-Cal as of May 2024. In the San Joaquin Valley, however, the percentage is considerably higher, at just under 51% across the region:

• Fresno County: 541,105 Medi-Cal enrollees, 56.1% of the population.

• Kern County: 485,105 Medi-Cal enrollees, 56.9% of the population.

• Kings County: 68,137 Medi-Cal enrollees, 47.2% of the population.

• Madera County: 83,315 Medi-Cal enrollees, 54.9% of the population.

• Merced County: 151,896 Medi-Cal enrollees, 55.9% of the population.

• San Joaquin County: 325,563 Medi-Cal enrollees, 43.2% of the population.

• Stanislaus County: 259,698 Medi-Cal enrollees, 50.3% of the population.

• Tulare County: 298,272 Medi-Cal enrollees, 61.9% of the population.

And there is growing uncertainty about what potential cuts the Trump administration might make to the Medicaid low-income insurance program, and what that could mean to Madera Community and other hospitals in the Central Valley.

Data from the National Academy for State Health Policy showed that in the 2022 fiscal year – the last full 12-month period before Madera Community closed and filed for bankruptcy – the hospital experienced a net financial loss of more than $11.5 million. But losses attributed to insufficient Medicaid reimbursements added up to a whopping $39 million, while Medicare represented an additional loss of $5.3 million.

Among more than 30 hospitals with emergency rooms throughout the Valley, only three – Community Regional Medical Center, Saint Agnes Medical Center in Fresno and Clovis Community Medical Center – experienced larger dollar losses from Medicaid care for low-income patients. And each of those hospitals is much larger and saw many more patients than Madera Community.

Stark said what happened to Madera Community should be “a wake-up call for our elected officials” and state and federal agencies.

“They need to hear this, because hospitals are going to continue to struggle and close, and you’ll see programs like OB and labor/delivery continue to shutter,” he said.

“It’s an unsustainable model, the way that (Medicaid and Medicare) are currently reimbursed,” Stark said, “but I’m hopeful that Madera has given insight into those financial challenges.”

About the Author

Tim Sheehan is the Health Care Reporting Fellow at the nonprofit Central Valley Journalism Collaborative. The fellowship is supported by a grant from the Fresno State Institute for Media and Public Trust. Contact Sheehan at tim@cvlocaljournalism.org.