Roughly 30 taxpayer-funded health care districts in California no longer run hospitals, in a departure from their original mission, and some have amassed large surpluses even as the health care needs in their communities go unmet.
Health care districts were created after World War II, when the state allowed communities to levy taxes to build hospitals in rural and low-income areas. But many have taken on very different roles over time. The Legislative Analyst's Office notes in a new report that there are 73 health care districts in California – 43 that currently operate hospitals, and 30 that do not (including some that have never operated a hospital).
Most health care districts receive a share of local property taxes, the legislative analyst notes, and some levy parcel taxes.
Beach Cities Health District in Redondo Beach doesn't run a hospital, but operates two fitness centers – gyms that are used by less than 2 percent of the district's residents. The district gives about 30 free gym memberships to local police officers, firefighters and lifeguards. The district spent $6.3 million of its $10 million budget on salaries and professional fees in the 2010-11 fiscal year. Just $1.4 million went to health grants, even though the district has a reserve of $40 million.
Mt. Diablo Health Care District in Concord, which has not run a hospital since 1996, spent just 17 percent of its $3.2 million in revenue on community grants between 2000 and 2011, public records show. In March, the district was stripped of its powers by a regional watchdog commission, and it now will be managed by the city of Concord.
The Peninsula Health Care District in San Mateo County no longer operates a hospital, and has a $43 million reserve. The district spent just $1.8 million, or 3.3 percent of its total assets, on the community in the 2010-11 fiscal year. (Sources: Legislative Analyst's Office report, "Overview of Health Care Districts," April 11; The Bay Citizen, April 11.)