COMMUNITY HEALTHCARE DISTRICT
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
(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.....
Physician Recruitment and Guarantee of minimum income and necessary
equipment purchases; Reduced rental rates for office space; Other
(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;
(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.
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.