Open Accessibility Menu

Kaweah Health Receives $20.8 Million from Distressed Hospital Loan Program

  • Category: News
  • Posted On:
  • Written By: Maria Rodriguez Ornelas

VISALIA, CA – Kaweah Health is excited to announce the receipt of a $20.8 million loan distribution from the State’s Distressed Hospital Loan Program. The funding comes at a time of financial recovery at the hospital, which has posted an operating profit of $6.6 million over the first seven months of fiscal year 2024, compared to a $32.2 million loss over the same time last year. In addition to Kaweah Health’s financial progress, on February 13 Moody’s Investors Service upgraded Kaweah Health’s credit rating outlook from negative to stable.

Kaweah Health CEO Gary Herbst is grateful for the funding although he acknowledges it is a short-term solution. “With the passing of the Distressed Hospital Loan Program, we saw a positive signal that the State had recognized the seriousness of the plight community and rural hospitals face across California. This program is a step in the right direction, and it is a sign that lawmakers are listening, but we need to continue working with our legislators to bring long-term support in the form of higher Medi-Cal reimbursement rates,” said Herbst.

Herbst has been an outspoken advocate for all hospitals that found themselves struggling as they entered the post-pandemic era facing great financial challenges. He worked closely with California Senator Shannon Grove and California State Representative Vince Fong as they and other elected officials developed the Distressed Hospital Loan Program.

The Distressed Hospital Loan Program awarded 17 California hospitals no-interest loans which must be repaid over six years after an initial 18-month grace period. While the funding helps struggling hospitals secure their financial footing, hospitals across California are still facing serious challenges such as low Medi-Cal reimbursement rates that do not cover the cost of providing care, record-high medical inflation, and significant staffing cost increases due to the new minimum wage mandated by SB 525. The new law is estimated to increase California hospitals’ annual staffing costs by $8 billion when fully implemented.


Kaweah Health is a publicly-owned community healthcare organization that provides comprehensive health services to the greater Visalia region and Tulare County. With more than 5,000 employees and 700 medical staff, Kaweah Health is committed to meeting the community’s health needs through state-of-the-art medicine, high-quality preventive services, and specialized health centers and clinics. For more information, visit or follow Kaweah Health on Facebook, Instagram, or Twitter.