Quick Take
After a $23 million loss in 2025, Watsonville Community Hospital saw a slight improvement in its finances in January, according to a presentation from the facility’s chief financial officer to the hospital board this week.
After reporting a nearly $23 million dollar loss in 2025, Watsonville Community Hospital is seeing a slight improvement in its finances just a month into the new year.
“The positive news is that we had a much smaller loss for [January] than almost every month that we saw in 2025,” said Julie Peterson, the hospital’s chief financial officer.
Peterson told hospital board members Wednesday evening that the health care facility reported a $158,696 net loss for January. She added that the hospital was not “far off” from its budgeted volume of emergency department visits, admissions to the intensive care unit and baby deliveries, which was not the case at the end of last year.
Going into 2026, the hospital “was more conservative” with its projections of patient visits, admissions and procedures, after seeing a dip in those numbers last year following the approval of the Republican reconciliation bill, said Peterson.
In January, there were 2,723 visits to the hospital’s ER, averaging 88 visits a day, which is only a slight increase over the end of last year. Other statistics, such as the number of surgeries, are anticipated to “ramp up” following the hiring of a general surgeon and an orthopedic surgeon earlier this year, Peterson said.
“This is not good, but it’s better,” said board chair Tony Nuñez. “There’s a horizon at the end of this, which is good.”
The hospital generated about $35 million less revenue than anticipated in 2025, CEO Stephen Gray told Lookout earlier this month, and expects to lose between $4.5 and $10 million over the next three years. Gray reminded board members that when the health district that now runs the hospital formed in 2022, WCH had only eight days of cash on hand.
Hospital leadership is searching for potential partnerships with regional health care providers, such as UC San Francisco, CommonSpirit Health (manager of Santa Cruz’s Dominican Hospital) and Sutter Health, to help manage the hospital’s day-to-day operations.
The board also approved a $2 million dollar loan from the Community Health Trust of Pajaro Valley, a nonprofit that provides health and wellness education and operates a food pantry. The loan will help support the hospital’s operating expenses, Gray said. Per the agreement, the hospital will receive the money in March and pay it back by the end of July after receiving funding through the Private Hospital Supplemental Fund at the state level, Gray said. The program provides funding for hospitals that meet certain requirements, such as being a small rural hospital or serving a large number of Medi-Cal recipients.
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