HUMBOLDT – Arcata’s former freestanding hospital is headed for sale. Announced in a press release on Monday, May 22, the pending sale to Southwest Healthcare Services, LLC will be completed this fall.
The declaration (see page 4) he cites falling refunds and rising costs of sale. He praises the pending hospital management firm as ideal for the task and promises to invest in new services, including behavioral health.
ARCATA, CA – May 22, 2023 On May 20, 2023, the Board of Directors of Mad River Community Hospital (“Mad River”) approved a Non-Binding Letter of Intent with hospital management company Southwest Healthcare Services, LLC (” Southwest”), establishing a general framework for the acquisition of Mad River and its subsequent operation as part of Southwest’s affiliated healthcare network.
Over the course of the next 90 days, the parties will complete their mutual due diligence and work toward a final agreement. The parties expect to reach a definitive agreement, obtain regulatory approvals and implement the change of control in the fall of 2023. During this period and during the transition, Mad River will remain open and continue to operate normally.
As part of the framework, Southwest has committed to (i) maintain employee wages and benefits; (ii) maintain medical contracts; (iii) maintain existing services; and (iv) invest heavily in facility improvements and service line expansions, including behavioral health.
“I am very excited to make this announcement today,” said Mad River President and CEO Douglas Shaw, “My father built this hospital and it has been my life’s passion to continue his legacy. I am proud of Mad River’s 50+ year heritage as an independent hospital. However, as small rural hospitals continue to struggle financially in the aftermath of the COVID-19 pandemic, it has become clear that to ensure Mad River’s long-term viability in this community, we must partner with a community management team. proven health care that can navigate the current uncertainties in the economic climate for hospitals in California.”
“Southwest is the perfect fit at the perfect time,” said Shaw, “Led by Precious Mayes, an executive who has won accolades for her leadership in critical access and safety net hospitals, Southwest will operate a small but stable hospital network that shares the values and culture of Mad River. I look forward to the community getting to know her and her talented team in the weeks and months ahead.”
Mr. Shaw emphasized that the choice of a new administration was driven by shared values and culture. “In recent decades, Mad River has been approached about possible acquisitions, but we have refused to relinquish our independence out of concern that such a move would not meet the needs of the community or protect our dedicated staff,” said Mr. .shaw.
“However, we were drawn to this team because of their commitment to our staff and their track record with other hospitals in difficult circumstances.”
Southwest is a hospital management company that currently operates Pacifica of the Valley Hospital (“Pacifica”) in the San Fernando Valley and the Behavioral Health Urgent Care Center in Sylmar, California.
Southwest is currently working to open other hospitals after the previous owners closed them to serve the communities in which each one is located.
“This strategic partnership presents a tremendous opportunity to fulfill our mission of strengthening access to medical and mental health services,” said Ms. Mayes.
Ms. Mayes emphasized that the next few weeks and months will be spent getting to know the community in preparation to meet their health care needs.
“We are deeply honored by the opportunity presented to us by Mad River’s leadership, and we are committed to earning the trust of the communities Mad River serves.”