ARIZONA: COUNTY REQUESTS FUNDS TO PRIVATIZE HEALTH SYSTEM
Faced with "a slew of last-minute legal problems," theThis is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
Maricopa County Board of Supervisors decided Friday to delay
until December 19 a vote on a plan to privatize the county's
health systems (McCloy, PHOENIX GAZETTE, 12/14). Supervisor Tom
Rawles had asked the board Thursday to approve a "$20 million
transfusion of public money" as part of a "last-ditch effort" to
save the privatization plan. The plan, the first of its kind in
the country, would turn the county's hospital, clinics and health
plans over to Healthcare Providers Inc. Rawles, the "chief
supporter" of the HPI plan, "said he would drop the [transfusion]
idea if the funds weren't available," the PHOENIX GAZETTE
reports. HPI was informed by the state this week that it must
post $20 million before it can take over the Arizona Health Care
Cost Containment System's (AHCCCS) contracts with the county
(McCloy, 12/12). The board voted in October to award the
contract to privatize the county's health system to California-
based HPI (see AHL 10/2).
LEGALEZE: Rawles said that he would ask AHCCCS, the state's
Medicaid program, today "whether the county's reserve fund" for
indigent care could be shifted to HPI "along with AHCCCS
contracts for long-term care." However, County Attorney Rick
Romley said that such a move might "be illegal." Romley will
issue a "final opinion" next week (GAZETTE, 12/14). "A state law
enabling the county to privatize the $600 million health care
system allows the county to grant money to its private
contractor," the GAZETTE reports.
DOOM AND GLOOM: HPI Chair Aaron Kizer noted that "it's
likely" that HPI will be dissolved if the supervisors decide
against privatizing the system or delay that decision again until
next year. "If they choose to say, 'No,' I go back to my day
job" as a lawyer, said Kizer. He said the "grant would be fair
because county officials 'sandbagged'" HPI with the $20 million
requirement so late in the process. However, County Supervisor
Don Stapley said that "a grant of taxpayers' money would make a
bad deal worse." Stapley said, "It's taking money away from the
sheriff and everybody else. The county is taking a shell company
with no assets and trying to shore it up. This deal could
bankrupt Maricopa County."
DELAYING THE INEVITABLE?: Frank Alvarez, CEO of HPI, said
that the "nonprofit corporation has arranged a $30 million line
of credit needed to begin operating the system." He called the
credit line "the acid test of the credibility" of the
privatization plan, "and strong evidence that the HPI proposal
will work." HPI's Kizer said that regardless of what the
supervisors decide, "the county has little choice but to transfer
the hospital to private ownership." He said, "We believe it is
inevitable this system will shut down if it is left with the
county" (12/12). The GAZETTE reports that the "25-year-old
hospital is only about half filled and operates at a loss of more
than $30 million a year" (12/14).