LOS MEDANOS COMMUNITY HEALTHCARE DISTRICT

STRATEGIC PLAN

Part I

Los Medanos Community Healthcare District Mission
and Mandate from the State of California

The District Mission

The mission of the District remains consistent without regard to the operation of a hospital and remains as set forth in the District’s Bylaws at Section 3:

“The primary purpose of the District shall be to identify and pursue opportunities for the District, as a governing Board, to improve the quality of healthcare in the community while promoting education and wellness, and to do any and all other acts and things necessary to carry out the provisions of these bylaws and ‘The Local Healthcare District Law’.”

The Los Medanos Community Healthcare District’s mission, pursuant to the Local Healthcare District Law and consistent with other healthcare districts in the State, is not dependent on operating a hospital.

The District Mandate from the State of California

A fundamental misconception exists that the healthcare districts are meant to operate hospitals. The State Legislature has gradually done away with the focus on hospital operations as the purpose of the districts, starting in the mid 1980s when districts began to convert their hospitals to private sector facilities. California healthcare districts are formed and derive their posers under the “Local Healthcare District Law” at Sections 32000 et.seq. of the Health and Safety Code. The very name of the law was changed from “Hospital” to “Healthcare” by the Legislature in 1994 to emphasize the new purpose of the districts. Today, close to one-third of the active healthcare districts in California do not operate hospitals and many of those districts are regarded as successful local agencies.

A healthcare district is among that class of local governments created by the State known as “special districts.” Without general “police powers,” these districts have powers limited to those specifically authorized by the Legislature. A healthcare district may exercise the powers granted in, or necessarily implied from, the Healthcare District Law, and they may do “any and all other acts and things necessary to carry out” the provisions of the District Law. (H&S Section 32121(k).) Among the general powers that the State Legislature has granted healthcare districts, aside from choosing to operate hospitals, there exists broad authority to conduct almost any conceivable healthcare promotion activity. And throughout California healthcare districts are engaging in just such a variety of healthcare activities. The origin of the Legislative mandate and purpose given the healthcare districts not operating acute care hospitals is found in the following provisions of the Healthcare District Law (Health & Safety Code):

Section 32121. General Authority of the District

Each local district shall have and many exercise the following powers:

.....

(c) To purchase, receive, have, take, hold, lease, use, and enjoy property of every kind and description within and without the limits of the district, and to control, dispose of, convey, and encumber the same and create a leasehold interest in the same for the benefit of the district.

(d) To exercise the right of eminent domain for the purpose of acquiring real or personal property of every kind necessary to the exercise of any of the powers of the district.

.....

(g) To employ any officers and employees, including architects and consultants, the board of directors deems necessary to carry on properly the business of the district.

.....

(i) To do any and all things that an individual might do that are necessary for, and to the advantage of, a healthcare facility and a nurses’ training school, or a child care facility for the benefit of employee of the healthcare facility or residents of the district.

(j) To establish, maintain, and operate, or provide assistance in the operation of, one or more health facilities or health services, including, but not limited to, outpatient programs, services, and facilities, retirement programs, services and facilities, chemical dependency programs, services and facilities, or other healthcare programs, services and facilities and activities at any location within or without the district for the benefit of the district and the people served by the district.

(k) To do any and all other acts and things necessary to carry out this division.

(l) To acquire, maintain, and operate ambulances or ambulance services within and without the district.

(m) To establish, maintain, and operate, or provide assistance in the operation of, free clinics, diagnostic and testing centers, health education programs, wellness and prevention programs, rehabilitation, aftercare, and any other healthcare services provider, groups, and organizations that are necessary for the maintenance of good physical and mental health in the communities served by the district.

.....

(o) To establish, maintain, and carry on its activities through one or more corporations, joint ventures, or partnerships for the benefit of the healthcare district.

(p) (1) To transfer, at fair market value, any part of its assets to one or more corporations to operate and maintain the assets.....

(p) (2) To transfer, for the benefit of the communities served by the district, in the absence of adequate consideration, any part of the assets of the district, including without limitation real property, equipment, and other fixed assets, current assets, and cash, relating to the operation of the district’s healthcare facilities to one or more nonprofit corporations to operate and maintain the assets.

.....

(r) To establish, maintain, operate, participate in, or manage capitated healthcare plans, health maintenance organizations, preferred provider organizations, and other managed healthcare systems and programs properly licensed by the Department of Insurance or the Department of Corporations, at any location within or without the district of residents of communities served by the district.....

Section 32121.3. Physician Recruitment and Guarantee of minimum income and necessary equipment purchases; Reduced rental rates for office space; Other incentives

(a) Notwithstanding any other provision of law, a hospital district, or any affiliated nonprofit corporation upon a finding by the board of directors of the district that it will be in the best interests of the public health of the communities served by the district and in order to obtain a licensed physician and surgeon to practice in the communities served by the district, may do any of the following:

(1) Guarantee to a physician or surgeon a minimum income for a period of no more than three years from the opening of the physician and surgeon’s practice.

(2) Guarantee purchases of necessary equipment by the physician and surgeon.

(3) Provide reduced rental rates of office space in any building owned or leased by the district or any of its affiliated entities, or subsidize rental payments for office space in any other buildings, for a term or no more than three years.

(4) Provide other incentives to a physician and surgeon in exchange for consideration and upon terms and conditions the hospital district’s board of directors deems reasonable and appropriate.....

Section 32126. Operation and maintenance of hospital through tenants; Lease agreement; Maximum term

(a) The board of directors may provide for the operation and maintenance through tenants of the whole or any part of any hospital acquired or constructed by it pursuant to this division, and for that purpose may enter into any lease agreement that it believes will best serve the interest of the district. A lease entered into with one or more nonprofit corporations for the operation of 50 percent or more of the district’s hospital, or that is part of or contingent upon a transfer of 50 percent or more of the district’s assets, in sum or by increment, as described in subdivision (p) of Section 32121 shall be subject to the requirements of subdivision (p) of Section 32121. Any lease for the operation of any hospital shall require the tenant or lessee to conform to and abide by Section 32128. No lease for the operation of an entire hospital shall run for a term in excess of 30 years. No lease for the operation of less than an entire hospital shall run for a term in excess of 10 years.

.....

Section 32126.5. Powers for provision of adequate health services; Limitations

(a) The board of directors of a hospital district or any affiliated nonprofit corporation may do any of the following when it determines that the action is necessary for the provision of adequate health services to communities served by the district:

(1) Enter into contracts with health provider groups, community service groups, independent physicians and surgeons, and independent podiatrists, for the provision of health services.

(2) Provide assistance or make grants to nonprofit provider groups and clinics already functioning in the community.

(3) Finance experiments with new methods of providing adequate health care.....

Section 32129. Contracts for professional health services

Notwithstanding the provisions of the medical Practice Act, the board of directors of a hospital district or any affiliated nonprofit corporation may contract with physicians and surgeons, podiatrists, healthcare provider groups, and nonprofit corporations for the rendering of professional health services on a basis as does not result in any profit or gain to the district from the services so rendered and as allows the board to ensure that fees and charges, if any, are reasonable, fair, and consistent with the basic commitment of the district to provide adequate health care to all residents within its boundaries.

[Emphasis in above text added]

The Attorney General of California has on a number of occasions formerly rendered opinions of the breadth of healthcare district authority and has remarked about the wide scope of powers unique among California special districts. In reviewing the above list of Legislative grants of authority, the Attorney General stated:

“...It is difficult to conceive of a way in which the Legislature could have granted a broader discretion to the District as to its properties.” (22 Ops. Cal. Atty. Gen. 53.)

The fact that the District’s Mission and Legislative Mandate remains unaltered by the failure of the hospital supports the District’s decision to move beyond mere implementation of the Bankruptcy Plan and Health Center oversight. The next step in development of a Strategic Plan is to place the District’s Mission and Legislative Mandate in the context of the healthcare environment present in the City of Pittsburg, Bay Point, an environs.