Insight Health Withdraws from Leasing Negotiations Amid Rural Healthcare Uncertainty

On August 14, 2025, Insight Health announced its withdrawal from lease-to-purchase negotiations with the San Benito Health Care District and Hazel Hawkins Memorial Hospital (HHMH), citing unprecedented uncertainties stemming from the passage of the One Big Beautiful Bill (OBBBA). This significant piece of legislation will lead to a staggering reduction of $1.1 trillion in healthcare funding, with $137 billion directly impacting rural healthcare services.

The San Benito Health Care District, situated in Hollister, California, sought to lease certain assets to Insight Health, allowing a potential purchase option. In November 2024, local voters approved a measure enabling the District to lease and sell various assets to financially sound partners. However, after several months of constructive discussions with Insight Health leaders, it became evident that the fluctuating financial environment rendered it imprudent to pursue the deal further.

Mary Casillas, CEO of Hazel Hawkins Memorial Hospital, emphasized the community’s reliance on stable healthcare services. She remarked, "Our community depends on the stability of our service lines, and any agreement must protect those services while identifying growth opportunities. The OBBBA has introduced a level of uncertainty in San Benito County that we have never experienced before. Though we have yet to fully comprehend OBBBA’s implications, it is clear that it has hindered our transaction with Insight and has broader consequences for rural hospitals across California and the nation."

Currently, nearly one-third of rural hospitals nationwide face closure, with about 700 at risk and another 300 in immediate peril, according to the Center for Quality Care and Payment Reform. The District now plans to fortify its financial standing while strategizing to ensure long-term viability.

Bill Johnson, Board President of the District, expressed disappointment over the turn of events but reaffirmed the commitment to safeguard Hazel Hawkins' future. He stated, "While this is a disappointing turn in our journey with Insight Health, our dedication to protecting the future of Hazel Hawkins is unwavering. Surviving the fallout of OBBBA will require dedication, creativity, and collaboration from our leadership, staff, medical professionals, and partners. We are hopeful to explore other meaningful partnerships with Insight as part of our continuous efforts."

This decision has raised concerns among community members about the future of healthcare in San Benito County. The collaboration was seen as a potential lifeline for the hospital's financial stability and services, which are crucial for serving the local population effectively.

Looking ahead, the San Benito Health Care District aims to identify alternative partnerships and strategies that can enhance its operational capacity and ensure sustainable healthcare access for the residents of San Benito County. The community remains vigilant and hopeful for solutions that can bring about stability and growth in local healthcare services, despite the looming challenges posed by the current legislative landscape.

For further inquiries regarding this matter, please contact Marcus Young at [email protected]