California Company Saves Eight Hospitals from Permanent Closure over 10 Years

MODESTO, CALIFORNIA – While an estimated 20% of California hospitals lie at the brink of closure, one
California company has been quietly bringing struggling hospitals back to life, to the relief of their employees and communities.

Modesto-based American Advanced Management, a for-profit company, has revitalized eight hospitals in the past 10 years under a variety of structures, such as management services agreements, lease-to-purchase options and acquisitions. The company then provides centralized support and expands services as appropriate so that the hospitals gain system advantages while localizing operations for their communities.

Glenn Medical Center

“We were 24 hours from closing our doors when American Advanced Management came in,” says Traci Torres, business services manager for Glenn Medical Center and now leader of regional admissions and registration for Glenn and Colusa hospitals in Northern California.

It was 2018, and staff members were feeling busy when their 25-bed hospital had five inpatients in the house. Annual wage increases were nonexistent then, hiring freezes were common and departments were reducing staff to keep the hospital afloat.

The financial straits also made ordering supplies difficult for Lab Director Becky Smith. “When I tried to place my orders, it was always a challenge because we were placed on credit holds. I had to be creative to get what we needed.”

Employees were becoming increasingly aware of the financial issues, and “we were losing a lot of good
people,” Smith says. “They were tired of all the challenges.” 

At the time, Becky Smith was also helping out at Colusa Medical Center, which American Advanced was
preparing to reopen, a herculean project that requires numerous steps and hurdles to receive licensing by the local, state and federal agencies governing the many hospital functions.

She finally put her notice in at Glenn. As much as she loved the hospital, she just couldn’t see a future there due to the flood of debt.

But then she started noticing some familiar Advanced American faces in her hospital’s hallways, she recalls. “I saw that Noah’s ark was right outside,” and she decided to stay.

Five years later, Glenn Medical Center cares for 20 to 30 inpatients a day, and census is consistently 90% to 100% of capacity. Hospital staff receive wage increases every July. The facility has been painted, and the worn, old carpet in the nursing units has been replaced with shiny vinyl floors that look like wood. The hospital’s clinics have new urology, neurology and podiatry specialists to care for local community members, keeping radiology services busier. Leaders and staff also track patient quality and safety metrics more closely as well.

Saving a Hospital Saves Lives

American Advanced team members are passionate about revitalizing hospitals because their work brings hope for employees, physicians and communities and strengthens the local economy.

More importantly, they know that saving a hospital saves lives. One study estimated that closures of rural
California hospitals increased inpatient mortality by 8.7% from 1995 to 2011. Other studies have found that closures increased risk for rural patients suffering heart attacks and led to dangerous delays of important non-emergency care, such as cancer screenings and maternity care.

American Advanced leaders keep an eye out for struggling hospitals, and they try to help their leaders and boards see early what is at stake and what needs to happen quickly. “It’s much more difficult to come back from a hospital closure,” says Matthew Beehler, American chief strategy officer. “It can take months to reopen, putting lives at risk every day. But sometimes leaders just aren’t ready.”

When leadership from American Advanced Management saw news of one hospital’s decision to close, they drove three hours to the hospital and waited outside their administration office for four more, hoping to talk with leaders in person and help them understand the high stakes of their situation.

With assistance from local physician leaders, they finally had the conversation and offered to take over their liabilities from a previous failed agreement and expenses, including payroll, within days to keep them open. American Advanced Management was willing to accept the state Attorney General's requirements in line with a previous affiliation agreement that fell apart.

Orchard Hospital

Meanwhile, the Orchard Hospital’s leadership team and board welcomed American Advanced to Gridley in May, announcing a management agreement that they hope will lead to a change in ownership if approved by the California Department of Public Health and the California Attorney General.

“My one goal was to have a hospital care for our community,” says longtime Orchard Board Chair Edwin
Becker, Jr.

He visited American Advanced’s other California hospitals before the board vote. “I could see the pride that leadership had in those facilities. All the employees I talked to were very proud of American Advanced and very happy to work with them.”

The board made the right decision for the hospital’s future, he says. In the three months since then, the
Orchard Hospital has been repainted inside and out, their census has doubled, a new CT scanner is on its way and leaders announced the opening of an outpatient center.

“Everything that American’s leadership told us would come true has come true,” Becker says. “There has been no hesitation on their part to enhance the quality of leadership, bring the facility up to speed and ensure care continues for our community.

Hospitals Acquired or Managed by American Advanced Management:

1. Central Valley Specialty Hospital, Modesto, 2012
2. Coalinga Regional Medical Center, 2020
3. Colusa Medical Center, 2017
4. Glenn Medical Center, 2018
5. Orchard Hospital, Gridley, 2023
6. Kentfield Hospital, Marin, 2023
7. Kentfield Hospital, San Francisco, 2023
8. Sonoma Specialty Hospital, 2018

Have Questions?

Talk to an expert