SANTA CRUZ — Ward Mailliard had lived in Santa Cruz County for 50 years, but when he received his first cancer diagnosis in December, he felt like a stranger.
“It was a very difficult period for me,” said Mailliard. “You have no idea of the language, the treatments, the medications; you have no idea what the prognosis is going to be.”
It wasn’t the physical environment that suddenly became unfamiliar to Mailliard. Instead, it was the experience of navigating a new sector of the medical system that was so disorienting. Setting aside the abject fear and confusion that often comes with a cancer diagnosis, Mailliard, 79, and his loved ones rushed to familiarize themselves with the various doctors, drugs and treatments he would soon undergo so he could chart out a clear course of action and recovery. Key to this, he emphasized, was the human connection with local workers who patiently guided him through the system’s complexities.
“What you need in the beginning are explanations,” he said. “Finding the people who will take the time (to do that) is challenging. And local doctors, local scene, people who are very interconnected … is useful to that.”
Mailliard spent the initial period just before and after his diagnosis receiving pain treatment at Dignity Health Dominican Hospital in Santa Cruz — a local healthcare institution he’d been visiting for decades where he never had anything but good experiences. Shortly thereafter, he began radiation therapy that lasted through January. But when that phase of treatment had passed and Mailliard reached out to a new oncologist from another local provider who could take over his long-term care, he was told their office didn’t have space for him at the moment because they were responding to a wave of patients also in search of a new physician.
Mailliard then learned through “hearsay,” as he called it, that three oncologists practicing with Dignity Health had departed after recent contract negotiations fell through. Because time was of the essence, Mailliard was forced to abandon his first choice for a local physician and quickly pivoted his care to a Stanford facility in San Jose where he was able to secure the lifesaving treatment he needed. But he couldn’t stop thinking about the other oncology patients he passed in Dominican Hospital’s hallways when he was first treated.
“When you’re under duress of any disease or any crisis, the healing is really not just medicine, but it’s also relationships,” said Mailliard. “It was hard for me to go out and, sort of, redo the whole game. But I can do that, I have the resources. Not everybody does. They’re totally dependent.”
Negotiations collapse
Large nonprofit healthcare entities, such as Dignity Health and its parent company CommonSpirit, often form nonprofit foundations that contract with groups of providers, or medical groups, that band together to coordinate care and negotiate as a collective. Once under contract, the medical group can focus on rendering services to patients while the foundation facilitates billing and administrative work, among other things. The doctors sign off on services provided, the foundation bills for the services and passes that revenue back to the medical group and its members, while retaining a portion for itself.
The Santa Cruz Medical Group was formed in 2015 and began contracting with the Dignity Health Medical Group — Dominican shortly thereafter. Recently, according to a physician and former member of the medical group who was granted anonymity due to concerns about possible retaliation, CommonSpirit decided it wanted to restructure the pay scale for the physicians in the medical group, which sparked a negotiation process. The physician, who is aware of the negotiation details but was not directly involved in them, told the Sentinel that the medical group’s leadership was attempting to keep the structure unchanged until CommonSpirit abruptly refused to continue negotiations in September 2025.
In the wake of the termination and subsequent dissolution of the Santa Cruz Medical Group, at least 10 primary care providers — many of whom have practiced locally for more than a decade — departed from the Dignity Health network, along with at least a dozen more physicians from obstetrics and gynecology, intensive care, urology, hematology, oncology, endocrinology, gastroenterology and rheumatology, according to the physician.
Many of the physicians who left the network retired early or took jobs in neighboring counties, according to the physician, but the precise breakdown of providers that continued to practice locally and those who left is unclear at this time.
The medical group was made up of approximately 64 shareholders as of last fall, which included doctors and advanced practice providers such as physician assistants, nurse practitioners and certified nurse midwifes. Dignity now contracts with the Foundation Physicians Medical Group, according to the physician.
In a statement to the Sentinel, the Dignity Health Medical Group — Dominican said that its “skilled physicians and advanced practice providers form the bedrock of our healthcare delivery system.” However, the statement continued, the group made “strategic adjustments” to “ensure our sustained growth” as it navigates an evolving healthcare landscape.
“While these necessary changes led some physicians to pursue other opportunities, our commitment to providing long-term exceptional patient care remains our top priority,” the group shared. “We are actively enhancing access to care. This includes reaching out to patients when earlier appointments become available and continually optimizing our scheduling processes for improved availability. In addition to welcoming new clinicians to our team, we are thoroughly reviewing appointment availability and implementing additional solutions to help patients secure timely care as efficiently as possible.”
The Sentinel asked Dignity Health how many physicians had departed from its network since last fall and why, in its view, the contract negotiations failed, but it did not address these questions directly and did not make a representative available for an interview.
‘I’m not the only one’
Like Mailliard, Susie Ellestad, 71, has also lived in Santa Cruz for more than 50 years and has been receiving care from the Dignity Health network for decades without issue. A few years ago, Ellestad’s longtime primary care physician retired and was replaced by another physician who Ellestad said provided outstanding care. In March, Ellestad heard that her doctor was leaving the Dignity Health network, which came as a surprise to her given her doctor’s competence and youth. But when Ellestad connected with several friends living in the area who also received services from Dignity, she learned that many others were in search of a new primary care physician after theirs also parted ways with Dignity.
“They’re in the same situation,” said Ellestad. “I’m not the only one.” Ellestad was told that the physicians were unhappy with the contract that was presented by Dignity’s medical group at Dominican.
When Ellestad went in search of another primary care physician in Dignity’s network, she discovered the first available appointment was April 2027.
“There are all these people like me who are patients of my primary care physician and the other primary care physicians who are leaving, who have, I’m sure many of them, have much more serious problems than I do,” said Ellestad. “We have been, it feels to me, somewhat abandoned by CommonSpirit letting these physicians go — for a wide variety of reasons that I don’t know first-hand so I’m not going to say — without having other physicians in place.”
When she asked what she should do if she needs care immediately, Ellestad was told to call Dignity Health’s support line and that a representative would find someone to see her. But Ellestad, who is in good health, remains concerned about other local patients with serious and chronic health conditions who need timely care and may also lack the financial resources to enroll in flexible insurance plans. Even for those who are able to receive services on a regular basis, Ellestad said the disruption of changing her primary care physician after only a year or two negatively impacts the quality of care. Seeing a doctor is often a vulnerable experience for patients — woman especially — explained Ellestad, and establishing a strong foundation of trust and open communication with a provider takes time.
“I feel like leaving people without a primary care physician for a year, you don’t have anybody you could talk to that knows you,” said Ellestad.
Economic stress
Dr. Donaldo Hernandez, former president of the California Medical Association and an internal medicine physician with the Palo Alto Medical Foundation, said the fallout between the Dignity Health and the physician group will undoubtedly curtail local access to care. According to Hernandez, the average doctor in the Central Coast region has a panel size, or the total number of unique patients served, of approximately 2,000 to 3,000.
Santa Cruz Monterey Medical Association CEO Donna Jones-Odryna told the Sentinel those figures outpace the statewide average of about 1,500 and that Santa Cruz, Monterey and San Benito counties still need to add at least 126 primary care physicians to comfortably meet the region’s needs. Overall, Jones-Odryna continued, the patient-doctor ratio in Santa Cruz County is actually in better shape compared to Monterey and San Benito counties.
Hernandez said it’s important to consider the failed contraction negotiations through the lens of chronic and acute economic stresses that threaten the local, state and national healthcare system. Hernandez noted that the average loan debt for medical school graduates is $250,000 to $300,000, and in a county consistently ranked as the most expensive rental market in the nation, the prospect of launching a career, starting a family and eventually owning a home becomes an untenable proposition.
“Recruitment has become really problematic,” said Hernandez. “Especially in non-specialty care — pediatrics, regular internal medicine, regular family medicine.”
Conversely, hospitals and healthcare organizations face struggles of their own. Hernandez said H.R. 1, the federal spending bill signed by President Donald Trump in July 2025, is already having an impact on the payer mix in California, which is the broader makeup of insurance benefits and corresponding reimbursement rates patients across the state are signed up for. The loss of Affordable Care Act subsidies and added Medicaid work requirements that will start in 2027, among other deep safety net cuts, means that more people will be uninsured, Hernandez continued, and because hospitals are required under federal law to treat patients regardless of insurance status, they end up providing care without recouping some of the cost through insurance reimbursements.
Even before those changes were approved, Hernandez said for years he has not been aware of a single medical practice in Santa Cruz County that has taken on new patients exclusively with Medicare, the federal insurance program for those 65 years and older. That’s because the reimbursement rate for Medicare is woefully inadequate, explained Hernandez.
“It just doesn’t pay the bills,” he said.
Corporatized medicine
But there’s something else casting a shadow over the situation for Hernandez. Hernandez expressed concern about a broader “corporatization of medicine” trend that, in his view, Dignity did little to dispel during negotiations. Acknowledging that he did not see any contract and only heard about the discussions through physicians involved, Hernandez said Dignity eventually put forward a “take it or leave it” contract offer that borrowed a page from hardball negotiation tactics more often deployed in corporate environments than in healthcare settings.
At the end of the day, Hernandez fears that the economic calculations happening on the periphery of the healthcare system are getting in the way of what he views as the industry’s true north: fostering greater access.
“This has done nothing to improve access,” said Hernandez. “What we really need to do is start investing again in one another. And the best way to do that is through the healthcare system.”
The modern Dominican Hospital at 1555 Soquel Drive in Santa Cruz was established in 1967. In 1988, it became a member of Catholic Healthcare West, which transitioned to Dignity Health in 2012. Seven years later, Dignity Health consolidated with CommonSpirit Health, one of the largest nonprofit health systems in the United States, in a $28 billion merger. CommonSpirit now oversees more than 2,300 care sites, 138 hospital-based locations and 20 million patient encounters across in 24 states. It reported $40 billion in revenue in 2025 but still had an operating loss of $225 million.
In addition to the hospital, there are numerous Dignity Health-affiliated offices and medical practices across the county.
More recently, Dominican Hospital underwent another transition. Longtime hospital CEO Dr. Nanette Mickiewicz announced in November 2025 that she planned to retire in early 2026. She was replaced in April by Christine McSweeney who was tasked with overseeing not just Dominican Hospital, but also Sequoia Hospital in Redwood City.
More than 80 nurses, hospital staff and community supporters picketed outside of Dignity Health Dominican Hospital in June to protest proposed layoffs. (Caroline Hemphill — Santa Cruz Sentinel)
There may also soon be a wave of departures among the hospital’s nursing staff, who recently made their discontent publicly known. More than 80 staff and community members picketed outside the hospital June 30 to oppose proposed layoffs to at least five nurse educators, nine unit coordinators and eight monitor technicians. The nurses told the Sentinel from the picket line that the cuts pose a risk to patient safety and would overburden staff that is already stretched too thin.
Meanwhile, Dignity Health said it is working to fill the gap left by recent physician departures and is ready to welcome new clinicians.
“While some are joining us immediately, others will be integrated into our team over the coming months,” the statement reads. “We anticipate having most positions filled by the end of the year.”