Santa Clara County studies impact of possible rural hospital closure

Santa Clara County is forecasting additional stress on its public health care system — the second largest in the state — if the only rural hospital in neighboring San Benito County closes.

A January report from Santa Clara Valley Healthcare estimates the closure of Hazel Hawkins Memorial Hospital — a 25-bed facility in Hollister — would strain the county’s hospital system because the next closest emergency department is St. Louise Regional Hospital in Gilroy. St. Louise operates at nearly two times the county’s average of emergency department visits, officials said. If Hazel Hawkins closed, the report warns emergency department visits would rise to approximately 2.4 times the county average.

County officials assume a closure of Hazel Hawkins would send 11,163 additional visits to St. Louise’s emergency department, totaling 61,118 in a year. That would require the hospital to set up seven to nine new emergency department stations and increase staffing, according to the report.

“Without additional (emergency department) capacity, (St. Louise) would be expected to experience significant crowding, longer wait times and throughput challenges,” the report reads.

While representatives for Hazel Hawkins said the hospital is fiscally sound, Santa Clara County leaders point out rural hospitals have been shuttering in the wake of H.R. 1, the federal spending bill that’s spelled billions of dollars in losses in to hospital systems across the U.S., including Santa Clara County.

“Hospitals like Hazel Hawkins have been challenged for a number of years and H.R. 1 makes that much much worse,” County Executive James Williams told San José Spotlight. “Rural hospitals rely more heavily on Medicare and Medicaid patients.”

Williams said San Benito County residents already rely on Santa Clara County’s hospital system, whose flagship facility — Valley Medical Center in San Jose — boasts a level 1 trauma center and one of just three burn centers between Los Angeles and the Oregon border. Hazel Hawkins is the only acute care hospital in neighboring San Benito County, which has 70,000 residents according to U.S. Census estimates, compared to Santa Clara County’s four public hospitals for its roughly 2 million residents.

“When we have higher volumes, increased demand for services, it has cascading impacts,” Williams said. “It affects everyone’s care in terms of wait times and access, even if the particular service or facility isn’t one you utilize. What we’ve tried to outline is what this might look like in South County.”

Hazel Hawkins remains operational for now, with 18 emergency department stations and obstetric, imaging, rehabilitation and general medical-surgical services. But the hospital’s leaders have weathered fiscal uncertainty for years, and neared a tipping point last August with the collapse of a lease-to-purchase agreement with Insight Health Partners. The hospital had sought to regain its footing through a buyer after filing for bankruptcy last year.

The hospital’s leaders maintain operations are stable.

“For us, right now, we do not foresee any cuts to our current operations, and our financial position is the most solid we have seen for more than 10 years,” hospital spokesperson Marcus Young told San José Spotlight. “This due to the hard work of our CEO Mary Casillas, our CFO and the entire leadership team.”

Though Young said there are still “storm clouds” related to federal funding losses under H.R. 1., Hazel Hawkins has yet to see those impacts.

“In other words, rural health care is still in crisis in California and across the nation,” Young said.

Rachel Ruiz is a board-certified pediatric gastroenterologist at Valley Medical Center in San Jose and leads the Valley Physicians Group, the union representing doctors at Santa Clara County’s public hospitals. She said her family is from Hollister and that she’s familiar with Hazel Hawkins.

“When I hear about Hazel Hawkins’ issues, the first thing I’m thinking about is our patients,” Ruiz told San José Spotlight. “We’re going to have increased morbidities, mortality and delayed care for our patients if they lose this hospital in San Benito County.”

Ruiz said patients still have difficulty accessing services in the county system.

“If you receive primary care here, you have a hard time seeing your own physicians (already), so it’s not going to be easy to absorb additional patients,” Ruiz said. “In our specialty clinics, we see patients from outside the county just because there are no services where they live. The further away you are from home, there are more financial and physical barriers and that affects health outcomes.”

The last time a hospital was on the verge of shuttering services — threatening the region’s health care capacity — was Regional Medical Center in 2024. The hospital at the time was owned by the private company HCA Healthcare, which had moved to downgrade trauma, stroke and heart attack care in East San Jose. Santa Clara County leaders criticized the company’s cuts as irresponsible and profit-driven. Ultimately, the county bought Regional at an expense of $315 million during a county structural budget deficit. The hospital has since revived its trauma, stroke and heart attack services and also reopened its maternity ward.

In January, Santa Clara County leaders announced the rollout of cardiology care at St. Louise and Valley Health Center in Morgan Hill. South County has historically lacked medical access across its swaths of farmland and open space. The hospital and health center are providing patients proactive services such as electrocardiograms and monitoring patches to avoid heart issues from worsening.

“This just highlights how important those investments have been, and how critical they are for not only residents in South County but broader community,” Williams said.

Contact Brandon Pho at [email protected] or @brandonphooo on X.