Statement by CEO Stephen Gray: Intensive Care Unit

Jan. 16, 2026

Contact: Jennifer Murray 831-515-2802

Statement by CEO Stephen Gray:  Intensive Care Unit

Watsonville Community Hospital is committed to providing high-quality care to our community, including maintaining a strong and fully operational Intensive Care Unit (ICU). We stand with the hospital’s professional nurses in this commitment to continue providing and strengthening our services. Our ICU remains open and available to admit patients who need care.

However, like many community hospitals across the country, we are facing significant challenges related to federal funding impacts, which are projected to worsen this year due to the federal H.R. 1 bill that was signed into law by President Trump. The bill, passed in July 2025, includes nearly $1 trillion in cuts to the Medicaid reimbursements that public hospitals rely on. Watsonville Community Hospital expects to lose between $4.5 and $10 million over the next three years, most of which is due to impacts from federal cuts.
These pressures are compounded by the fact that the hospital inherited limited financial reserves when it began operations as a community-owned entity three years ago. Despite these obstacles, meaningful progress is being made.

A bright spot in the hospital’s financial picture is Measure N, passed by local voters in 2024. The measure represents an important investment by the community in the future of the hospital. Measure N is a bond measure that provides funding exclusively for essential facility upgrades, equipment modernization and the purchase of the hospital property. State law prevents the hospital from utilizing bond funds to support personnel- and service-related costs.

This month, hospital leadership has had productive, collaborative discussions with our nursing staff and union representatives. We are grateful for this partnership and the shared commitment to patient care. A permanent night shift ICU nursing position was filled earlier this week — reducing a key staffing gap — and an interim staffing solution is in place for the next four weeks while work continues toward a sustainable, long-term model. Our focus remains on keeping services available and providing excellent care for patients in every way we can.
Ensuring the hospital’s long-term financial stability will require a collective effort. To this end, we are working hard to identify an operating partner for the hospital. We also are continuing to recruit and retain medical providers, and encouraging community members to seek care locally when they need it.
We remain optimistic and committed to working together — with our staff, partners and the broader community — to strengthen Watsonville Community Hospital for the future. We are deeply thankful for the dedication of our healthcare team and the ongoing support of the Pajaro Valley community.