Curing what ails health care districts

Now what?

Less than a week after an Assembly committee convened to discuss the role of health care districts in public health, San Mateo County Assemblyman Rich Gordon and Health System Chief Jean Fraser are both optimistic the hearing was more than lip service.

Three districts, including one in San Mateo County, were represented at the hearing along with officials who said they should do more. Legislators heard disparate opinions about health care districts that no longer operate hospitals but maintain taxing authority. But, with the testimony over and the participants all back to their daily routines, now what?

Gordon, D-Menlo Park, hopes information shared will lend weight to a transparency bill he introduced earlier this year. Fraser hopes the Peninsula Health Care District might have a new commitment to helping with the county’s indigent.

"I was surprised and pleased to hear Peninsula testify they’re open to supporting care for uninsured adults in their community,” Fraser said.

Although the county has been denied a $2 million grant request before, Fraser said it will try again based on the testimony given by Dr. Lawrence Cappel, district boardmember and treasurer.

Cappel could not be reached for comment but, in his testimony, he cited the district’s obligation to maintain reserves and the district’s support for San Bruno fire victims, children’s health care and nursing program loans.

The discussion of whether health care districts should contribute more to health care is not new for San Mateo County but has received renewed attention including last Wednesday’s hearing and Gordon’s spot bill.

Knowledge and understanding are key steps toward passage, he said, and those at the Assembly Committee on Accountability and Administrative Review got an earful.

"This hearing was very helpful in terms of the legislation I’m carrying and very, very helpful in terms of awakening the current discussion,” Gordon said. "The bottom line is even if my legislation is not amended it’s going to move forward.”

Gordon’s bill would mandate that districts disclose explicit information on the share of district resources used for actual health care services and those used for administration needs. Gordon isn’t sure if there will be any opposition to his bill and said it is hard to gauge right now because many of the state’s health care districts are situated differently than San Mateo County.

"The key thing is not to do anything to harm districts doing a great job. Again, what I want to do is provide that higher level of accountability,” Gordon said.

Gordon said there is still time this session for a public debate and legislative consideration.

In her testimony, Fraser recommended requiring health care districts to shoulder some of the indigent care and — taking a cue from federal health care reform requirements of insurance companies — mandate that districts spend 95 percent of their revenue for health services.

Although Fraser has no role in any legislative remedies, she said any funding from Peninsula could make a huge difference for the nearly 3,000 people waiting to get primary care through the Health System.

In contrast, Fraser praised the Sequoia Healthcare District which also does not operate a hospital but contributes hefty amounts toward local care. Specifically, for the past five years, the Sequoia Healthcare District has given between $1.6 million and $2 million annually for uninsured adults and $4.3 million for a new clinic. Both districts have also aided low-income children and support specialized paramedic response.

Part of the concern over what the districts spend is also relative to what they take in and keep. Based on 2010 numbers, the Sequoia Healthcare District had approximately $19 million in assets, collected $7 million in taxes and awarded $8 million in grants. Peninsula Health Care District had $46 million in reserves, collected approximately $4 million in taxes and granted $2 million.

The two districts’ philosophies and financial strategies are often pitted against each other as Sequoia awards more than it takes in and Peninsula argues its hefty reserves are necessary in case it ever has to buy the hospital back from parent Sutter Health.

Gordon isn’t swayed.

"I still have trouble with the argument that Peninsula needs to stockpile money in case Sutter goes bankrupt,” Gordon said.

Fraser sees the policy in terms of how quickly health care overall changes and said planning decades in advance is not something anybody has the luxury to do.

"It seems so unlikely to plan for because if something was to happen to Sutter we would have a much more massive problem,” she said.

With health care delivery moving away from large-scale medical facilities, the collapse of a hospital might not be the primary worry the district maintains, she said.

Gordon compared the districts to redevelopment agencies — a governmental function that served a purpose but is not above periodic review to determine if they are still relevant.

"These districts were created in a different time and place,” Gordon said.

Michelle Durand can be reached by email: michelle@smdailyjournal.com or by phone: (650) 344-5200 ext. 102.