Should California Reconsider Health Care Districts?

Shortly after World War II ended, the California Legislature passed laws allowing counties and communities to create special health care districts to ensure that low-income and underserved Californians have access to hospitals. These districts, most of them built around publicly owned hospitals, could levy taxes and gain access to special financing tools.

Over the past half century as the health care landscape changed, publicly owned and operated hospitals shrank or disappeared. Now, about 30 of California’s 74 health care districts do not operate hospitals.

A report last month by The Bay Citizen, which produces news sections for the New York Times, suggested “many of these districts stockpile vast reserves and divert money to administrative and operating expenses, including lawyers, election fees and board members who earn lifetime health benefits for part-time work.”

Critics suggest money devoted to keeping these organizations financially sound could be better spent on care for low-income Californians.

Proponents say the districts still serve valuable functions in some parts of the state.

A hearing on the issue is scheduled this week before the Assembly Committee on Accountability and Administrative Review.

Even without national health care reform, one could argue that the evolution of the health care industry in California has moved beyond the laws that created these special districts almost 70 years ago.

Now, with the Affordable Care Act poised to dramatically change the state’s health care system, we asked stakeholders and experts if California should be reconsidering health care districts.

We got responses from: