Expecting families in California's Pajaro Valley are facing a hard new question: where will they give birth next spring? Leaders at Watsonville Community Hospital have warned that the hospital may have to close its labor and delivery unit or risk shutting down entirely by April 2027, according to Santa Cruz Local.
No decision has been made. But the warning lands on a hospital that already closed its neonatal intensive care unit in July and that delivers roughly 31% of all babies born in Santa Cruz County, Lookout Santa Cruz reported on Sept. 28.
For a pregnant worker in Watsonville or Pajaro, the issue is personal. It shapes which hospital to plan for, how far a partner may drive during labor, and how a family would visit a newborn who needs extra care.
Eight Days of Cash and a Hard Choice
The warning surfaced at a special board meeting of the Pajaro Valley Health Care District, which runs the hospital, on Sept. 22. The hospital lost more than $23 million in 2025 and is losing about $85,000 a day in operations, according to Santa Cruz Local. A $10.6 million state grant helped keep it afloat, but that money has already run out.
Interim CEO Tim Moran described the hospital's position in an email to Santa Cruz Local. "The hospital is running with approximately eight days of cash on hand. Growth initiatives and partnership are being actively pursued, but the results of those efforts will not benefit the hospital for months to come," he wrote.
Payer mix is central to the strain. Roughly 85% of the hospital's patients use Medi-Cal or Medicare, Santa Cruz Local reported. Chief Financial Officer Julie Peterson said federal changes under H.R. 1 are expected to cost the hospital $4 million to $6 million over the next year, the Pajaronian reported.
Peterson also told the board the NICU loses close to $2 million a year, and that patient volumes in both the NICU and labor and delivery have fallen in 2026, Lookout reported. "We have been evaluating and hearing all the comments on patient and community impact," Peterson said. "We do acknowledge that it will be a challenge to maintain any kind of positive community relations with a decision such as this."
The board heard a presentation and discussion at the special meeting but made no decisions, according to the Pajaronian. Lookout reported that no formal proposal to permanently close both units has been presented to the board.
A Valley Already Living Without Its NICU
The Level II NICU, which cares for babies born at 32 weeks or later, closed in July because of a nursing shortage in labor and delivery. There is still no reopening date. Babies who need more care are now transferred to Level III units at Dominican Hospital in Santa Cruz or Natividad Medical Center in Salinas, Lookout reported.
Moran told Lookout that a pediatrician from Stanford's Lucile Packard Children's Hospital assesses newborns to decide "where the baby can receive the necessary care," and that helicopter transfers for babies in distress are rare.
Families describe a heavier daily burden. Retired NICU nurse Sandra Morioka told Lookout that parents of transferred infants face "three hours a day going back and forth, and taking care of family." Roseann Farris, an ICU nurse with 30 years at the hospital, warned at the board meeting that NICU closure "can accelerate the closure of the OB department through severe clinical risks," the Pajaronian reported.
Losing labor and delivery would be a larger change. Watsonville averages about 60 births a month. Nora Yerena, founder of the Watsonville family resource center Raíces y Cariño, described what a longer trip could mean. "If I had to go through the hour-long drive of traffic, at that time, the chances of me not making it there conscious, better yet alive," she told Santa Cruz Local.
Watsonville would join a long statewide trend. From 2012 to February 2025, 56 California hospitals closed their maternity units, and more than one million California females of reproductive age saw the distance to the nearest birthing hospital grow from 2019 to 2024, according to the California Health Care Foundation. Medi-Cal covered 41% of California births in 2023, the foundation found. MedicalDaily recently reported that most recent obstetric closures nationally have hit urban, not rural, hospitals.
Public Hearings, State Notice and Steps for Expecting Parents
Any closure would not happen overnight. California's SB 1300, signed in 2024 after a CalMatters investigation, requires hospitals to give 120 days' notice before closing a maternity unit and to hold a public hearing. Santa Cruz Local reported that the hearing must take place within the first 60 days of that notice period.
The next public opportunity is the district board meeting on Oct. 28, from 5 to 6 p.m. in the hospital's Community Room at 85 Nielson St. in Watsonville, with Zoom access available. Residents can comment and ask about partnerships that could keep births in the valley. Santa Cruz Local reported that potential partners have included Sutter Health, Kaiser Permanente, UC San Francisco, Salud Para La Gente and CommonSpirit Health, though talks with one partner fell apart in May and no updates have been shared publicly since.
Pregnant people due in early to mid-2027 have time to plan but should start the conversation now. Families can ask their obstetrician or midwife which hospitals they deliver at, whether care could transfer to Dominican or Natividad, and whether their Medi-Cal plan or private insurance covers those facilities. It also helps to ask about a backup plan if labor is fast, and how a NICU transfer would work.
Families can also map the rush-hour drive to each hospital and keep prenatal records handy. Heavy bleeding, severe headache, vision changes, fluid leaking, or reduced fetal movement call for urgent care at the nearest emergency room, regardless of where delivery was planned.
Watsonville's maternity ward remains open today, and its future depends on board decisions, state notice rules, and partnership talks. The most useful step for expecting families is a direct talk with their prenatal clinician about where they will deliver and what the backup plan is.
Key Questions Answered
Is Watsonville Community Hospital closing its maternity ward?
Not yet. Hospital leaders said closing labor and delivery is one option to avoid a full hospital shutdown, but no formal proposal has gone to the board, and no vote has been taken.
When could the hospital close?
Leaders warned the hospital could shut by April 2027 if its finances do not improve. The interim CEO said it has about eight days of cash on hand.
Is the NICU open?
No. The Level II NICU closed in July because of staffing shortages and has no reopening date. Babies needing intensive care are transferred to Dominican Hospital or Natividad Medical Center.
Where would Pajaro Valley families give birth if labor and delivery closes?
The nearest alternatives named in local reporting are Dominican Hospital in Santa Cruz and Natividad Medical Center in Salinas. Families should confirm with their clinician and insurer which hospital fits their care and coverage.
How much notice is required before a closure?
Under California's SB 1300, hospitals must give 120 days' notice before closing a maternity unit and hold a public hearing within the first 60 days.
How can residents weigh in?
The Pajaro Valley Health Care District board meets Oct. 28 from 5 to 6 p.m. at the hospital, with Zoom access. Public comment is part of the process.
What should pregnant people do now?
Talk with an obstetrician or midwife about delivery plans, backup hospitals and insurance coverage. Seek emergency care right away for warning signs such as heavy bleeding, severe headache or reduced fetal movement.
Published by Medicaldaily.com
