Health Care Districts Spending Less on Aiding Uninsured Residents

Many of California's publicly operated health care districts use their financial reserves for purposes other than bolstering care resources for uninsured residents, Bay Citizen reports.

Background

Some health care districts in the state have departed from their original mission to oversee hospitals. Currently, about 30 of the state's 74 districts have stopped managing hospitals.

Use of District Reserves

Since California law requires counties to provide care for uninsured residents, some turn to tax-supported health care districts for financial support.

However, certain districts are spending more of their reserves on administrative and operating expenses, such as lawyer fees, election costs and lifetime health benefits for part-time board members, according to The Bay Citizen.

Despite their spending practices, several of the districts include efforts to ensure health services for residents in their mission statements.

Peninsula Health Care District

Last year, Peninsula Health Care District -- which no longer oversees hospitals -- refused a request from San Mateo County for the district to contribute $4 million of its $43 million reserve of public assets to help subsidize care for uninsured residents.

Peninsula CEO Cheryl Fama said the district rejected the request because "it was completely undefined." However, a letter from county officials informed the district that a "$4 million annual investment from PHCD would ensure 6,000 of the district's uninsured residents could rely upon continued access to care and considerably reduce waiting times for primary care appointments."

Peninsula spent 3.3% of its total assets -- or $1.8 million -- on health-related grants last year.

Reserve Spending at Other Districts

Other health care districts also have spent more of their reserves on administrative and operating expenses instead of health resources.

The districts include:

• Eden Township Healthcare District, which suspended its grant program two years ago despite collecting more than $24 million in public funds and spendingnearly $2.2 million on legal fees over the last three years;
• Los Medanos Community Healthcare District, which spent half of its revenue in fiscal year 2010-2011 on community and health programs and more than $435,000 on administrative and operating expenses; and
• Mount Diablo Health Care District, which collected $3.2 million in property taxes from 2000 through 2011 and spent $527,686 -- or 17% -- on community grants during that time.

Reaction

Judy Nadler -- a senior fellow in government ethics at Santa Clara University's Markkula Center for Applied Ethics -- said, "[W]e have public agencies that are collecting money that is not being used for the purposes for which the agencies were originally established."

Other critics have said the districts do little more than manage real estate and distribute grants, noting that they may no longer be the best option for improving the health of communities.