Sonoma Specialty Hospital in Sebastopol, California, just 5 years ago was facing bankruptcy, but a sale helped to keep the facility’s doors open while also adding inpatient beds. However, the hospital’s current owner, American Advanced Management, has not made good on its obligation to operate an urgent care (UC) center to serve patients after the closure of the original hospital’s emergency department. Sonoma County is now seeking $1.3 million in loan repayment from the owners because they didn’t keep the urgent care open. The move has led to a standoff between the county and the hospital operators, according to the Press Democrat.
The competitive landscape: Also according to the news report, a local physician who previously had managed the hospital’s UC opened her own independent UC clinic just down the street. The hospital is now referring patients to the physician rather than operating a separate UC clinic. It comes down to a matter of profitability for the hospital. Reopening the UC clinic doesn’t make sense because of low patient volume and low revenue. And paying back the $1.3 million to the county could put the rural hospital into another financially distressed situation. No solution has been proposed thus far.