LAFCO & HEALTHCARE DISTRICTS PREPARING FOR THE SILVER TSUNAMI - - PowerPoint PPT Presentation

CALAFCO Annual Conference – San Diego October 26, 2017

LAFCO & HEALTHCARE DISTRICTS

PREPARING FOR THE SILVER TSUNAMI

LAFCOS & HEALTHCARE DISTRICTS

• Topics to be covered in the session:
• The relationship between LAFCOs and Healthcare Districts
• Healthcare District preparation for the anticipated increase in the older

population (65-85+) and their associated needs for healthcare services (The Silver Tsunami)

• Case studies of local LAFCOs and Healthcare Districts

(Alameda/Sonoma)

• Ongoing and future State Legislative efforts to address Healthcare

Districts and LAFCOs (CALAFCO/ACHD)

LAFCOS & HEALTHCARE DISTRICTS

• LAFCO-HDs

Michael Colantuono

• Grossmont HD

Barry Jantz

• LAFCO-HD case studies

Sblend Sblendorio / Mark Bramfitt

• CALAFCO-HD legislation

Amber King / Martha Poyatos

CALAFCO Annual Conference – San Diego October 26, 2017

LAFCO & HEALTHCARE DISTRICTS

PREPARING FOR THE SILVER TSUNAMI

CALAFCO Annual Conference San Diego, CA October 26, 2017 Michael G. Colantuono Colantuono, Highsmith & Whatley, PC

420 Sierra College Drive, Ste. 140 Grass Valley, CA 95945-5091 (530) 432-7357 MColantuono@chwlaw.us Twitter @MColantuono

(C) 2012 Colantuono & Levin, PC 8

 Express power to act outside District (HSC 32121):

• Operate a health plan (r)
• Provide health care facilities & services (j)
• Own or lease property (c)
• Ambulance service (l)
• Other powers impliedly limited to District territory, but

how significant are these?

• This is a contested issue.

(C) 2012 Colantuono & Levin, PC 9

 Need not be contiguous (HSC 32001)  Must exclude territory not benefited (i.e., uninhabited)  Annexing territory excluded during formation process due to

lack of benefit requires findings (GC 58106)

 May be multi-county (HSC 32001)  No overlapping districts w/o consent of the first district

unless principal act says otherwise (GC 56119)

(C) 2012 Colantuono & Levin, PC 10

 Subject to zoning power of city or county

• 55 Ops. CA AG 375 (1972)

 Medical operations subject to regulation by a variety of

state health care agencies, such as OSHPD, Department of Insurance, etc.

(C) 2012 Colantuono & Levin, PC 11

 HSC 32137 allows a Health Care District to change its name

by a resolution filed with the County Clerk

 Other laws require all government agencies to register with

the Secretary of State

 Continued receipt of property taxes requires submission of

BOE Form 400-TA

(C) 2012 Colantuono & Levin, PC 12

 Property taxes (HSC 32200 ff.)  Special taxes: 2/3-voter approval

(HSC 32240; GC 53730.5 ff)

 Bonded debt

• Capital facilities & coinsurance plans (HSC 32300)
• Revenue bonds (HSC 32315)
• State bonds (HSC 32350)

 Appear to lack assessment authority  Substantial revenues from fees for service, health plans, third-

party payments, etc.

(C) 2012 Colantuono & Levin, PC 13

 Governed by principal act (HSC 32200)

• In re Valley Health System, 429 B.R. 692 (Bkcy CD Cal. 2010)

 But CKH can fill gaps in the principal act (id.)  If LAFCo receives application to form or reorganize a HCD, it

must give notice to state health agencies (GC 56131.5)

 Dissolution requires voter approval

(GC 57103) as does transfer of > ½ an HCD’s assets (HSC 32121(p))

(C) 2012 Colantuono & Levin, PC 14

 Principal Act refers to the District Organization Law

• HSC 32002 & GC 58030 ff.

 Formation process

• Petition (GC 58030)
• Bd of Sups of largest county (by district territory) is “supervising

authority” (GC 58004(d)

• Election (GC 58130 ff.)
• Uniform District Election Law applies (HSC 32002)
• LAFCo provides impartial analysis (HSC 32002.31)

(C) 2012 Colantuono & Levin, PC 15

 Is a HCD subject to LAFCo’s power to approve out-of-district

service under GC 56133?

• Broad express powers to act outside district may make this a rare

question

• Where principal act impliedly limits power to within district, the power

may be entirely lacking, with or without LAFCo’s approval

• SD LAFCo took the position that it does have this power and affected

HCD acquiesced in its position

 This is a hotly contested issue. Clearly HCDs were intended to

compete with private actors, but with each other?

(C) 2012 Colantuono & Levin, PC 16

 Are HCDs subject to LAFCO’s power to activate and deactivate

latent powers under GC 56824.10 et seq.?

 Technically, yes.  Practically, it may be difficult to show that what an HCD

proposes constitutes a “new or different function of class of service”

(C) 2012 Colantuono & Levin, PC 17

 Mammoth’s hospital invited to provide orthopedic services in

Bishop when Bishop lost its local bone docs

 Years later, a new CEO at Bishop hospital ordered Mammoth

to leave town and persuaded LAFCO to order it, too

 Mammoth refused and litigation ensued

(C) 2012 Colantuono & Levin, PC 18

 Sacramento Superior Court concluded that extra-territorial

service required LAFCO approval notwithstanding principal act

 Also concluded that LAFCO and No. Inyo waited too long to

sue and that new facilities for the Mammoth Hospital’s

• rthopedists did not amount to a further expansion of service

 No. Inyo appealed and the appeal will take 18-24 months to

resolve

(C) 2012 Colantuono & Levin, PC 19

 Certainly has power and duty to approve MSR, SOI &

reorganizations.

 Does not control formation, but may be able to do so in

reorganization context.

 Dissolution or sale of most assets requires voter approval.  Difficult role in refereeing disputes between HCDs as to extra-

territorial activity

(C) 2012 Colantuono & Levin, PC 20

 LAFCo has a bully pulpit via MSR & SOIs  Some HCDs are attracting attention due to competition for

scare property tax dollars and are therefore vulnerable to criticism if LAFCo, grand jury or others conclude they are not serving the public interest.

 Like all CA governments, HCDs have a need to engage the

public they serve and LAFCo can help them do so.

(C) 2012 Colantuono & Levin, PC 21

 New Report on Special Districts has chapter focused on HCDs

which no longer operate hospitals (37 of 79)

 Three recommendations

• Legislature should update the HCD law
• Legislature should not do end-runs around LAFCO as to HCDs or
• therwise
• Association of California Healthcare Districts should share and

promote best practices

 Assembly Local Government Committee had a March 2017

hearing on HCDs

(C) 2012 Colantuono & Levin, PC 22

(C) 2012 Colantuono & Levin, PC 23

CALAFCO Annual Conference – San Diego October 26, 2017

LAFCO & HEALTHCARE DISTRICTS

PREPARING FOR THE SILVER TSUNAMI

Grossmont Healthcare District

CALAFCO Annual Meeting San Diego – October 26, 2017 Barry Jantz, CEO – bjantz@grossmonthealthcare.org

As stewards of the public trust, your Grossmont Healthcare District will preserve and protect those resources entrusted to its care. To maintain and improve the physical and behavioral health of its constituents, we will:

 Partner with our hospital operator, Sharp HealthCare, to ensure access to

state-of-the-art medical services at Grossmont Hospital for all of the residents of Grossmont Healthcare District and beyond.

 Anticipate and recognize the unmet health care needs of the communities we

serve and support suitable services to the greatest extent possible consistent with available resources.

26

 1952 – Public Vote to form Grossmont Hospital District  1955 – Opening of Grossmont Hospital  1970/80s – Major Expansions Completed  1980s – Change in CA Law to Allow Hospital Leases  1991 – Lease of Hospital to Grossmont Hospital

Corporation

 1995 – Hospital District becomes a Healthcare District  2006 – Prop G passes with over 77% of the vote ($247 million)  2014 – Prop H Lease Extension passes – over 86%  2016-18 – Prop G Projects completed

27

28

“A district that leases or transfers its assets to a corporation…shall act as an advocate for the community to the operating corporation…and report to the community on the progress made in meeting the community’s health needs.” (Health and Safety Code)

• Lease, Transfer, Affiliation
• Governance Structure: Hospital Operating Board and Designees
• Limits for incurring debt and changes to hospital core services
• Monthly/Annual Reports from the Hospital to the HCD Board
• Annual Sharp Grossmont Community Benefits Report
• Quarterly Facilities Inspections / State of the Facilities
• Benefits of a Public/Private partnership

29

Existing Reality:

• Highest proportion of seniors in San Diego County
• Higher level of cardio cases, re-admissions, etc
• Symbiotic relationship between lone hospital and nearby nursing

homes

• Busiest Emergency Department in the County

Ongoing Efforts:

• Public/Private Partnership on new facilities, including Heart &

Vascular

• Grants program focused on direct patient care
• New Care Center to “decant” non-emergent ED visits
• “Seniors in Crisis” pilot project

• Robust, definable, documented Grants Policy and Process –

Adopted by Board

• Focus on direct patient care
• $2 million to $2.5 million per year
• $1 million Inter-Governmental Transfer (IGT) to benefit Sharp

Grossmont Hospital – Matched w/ $2 million going to Hospital

• Healthcare Career Pathways – $200,000
• Health Scholarships - $100,000
• Over $250K to Community Clinics
• Over $80K for Developmentally Disabled Services
• Over $100k for Senior Services – Alzheimer’s, ElderHelp, home

delivered meals

30

• Engage the public, legislators, local elected officials, other

stakeholders

• HCD Transparency and Access
• Advocate for adequate LAFCO resources and meaningful oversight,

MSRs – or suck up the alternative!

• Provide education and assistance to LAFCOs
• Engage in LAFCO boards and committees

31

• New ways of doing business?
• Engage the public, legislators, local elected officials, other

stakeholders (again!)

• HCD Transparency and Public Access (again!)
• Shared HCD best practices
• Community Needs: Increase in needs by non-profits and safety net

providers = Thoughtful, needs driven grants processes, including needs assessments.

• Specific to GHD: Help the public better understand the relationship

and benefits of partnership with Hospital operator.

32

Barry Jantz 619-825-5050 bjantz@grossmonthealthcare.org

CALAFCO Annual Conference – San Diego October 26, 2017

LAFCO & HEALTHCARE DISTRICTS

PREPARING FOR THE SILVER TSUNAMI

CALAFCO Annual Conference – San Diego October 26, 2017

LAFCO & HEALTHCARE DISTRICTS

PREPARING FOR THE SILVER TSUNAMI

CALAFCO Annual Conference – San Diego October 26, 2017

LAFCO & HEALTHCARE DISTRICTS

PREPARING FOR THE SILVER TSUNAMI

Healthcare Districts 101

Overview of Healthcare Districts

• 79 Healthcare Districts in CA
• Healthcare Districts are in 38 Counties
• 38 Districts operate 40 hospitals
• 5 Own but do not operate their hospital
• 41 Provide other services:
• 21 provide direct health care services
• 20 mainly provide grants

Unique Nature of Districts

Services Provided:

• Adult day care and senior services
• Ambulance services
• Hospice care
• Hospital Care
• Laboratory and radiology services
• Maternal and childhood services
• Medical transportation
• Mental health and substance abuse

services

• Nutrition and fitness education
• Outpatient surgery
• Partnering with local governments to

create opportunities for healthy lifestyles

• Physician training
• Rural health clinics
• School-based health services
• Skilled nursing facilities

Legislative Challenges

2016

• AB 2471 (Quirk): Would have required a LAFCo to dissolve a

Healthcare District without an election in certain circumstances. (Held)

• AB 2737 (Bonta): Limits the administrative costs for Healthcare

Districts meeting certain criteria (Eden Township). (Chaptered)

• AB 2414 (Garcia): Expands the Desert Healthcare District
• utside of the normal LAFCo process. (Chaptered)

Legislative Challenges

2017

• Assembly Local Government Committee Oversight Hearing
• AB 1728 (Local Government Committee): Requires Healthcare

Districts to: maintain a website, annually adopt a budget, adopt grant policies.

• SB 448 (Wieckowski): Seeks to dissolve “inactive” special

districts.

• Little Hoover Commission Special District Study

Little Hoover Commission Update

“What Role for Healthcare Districts?”

• The Legislature should update the 1945 legislative “practice acts” that

enabled voters to create local Hospital Districts, renamed Healthcare Districts in the early 1990s.

• The Legislature, which has been increasingly inclined to override local

LAFCO process to press changes on healthcare districts, should defer these decisions to LAFCOs, which in statute already have that responsibility.

• The Association of California Healthcare Districts and its member districts

should step up efforts to define and share best practices among themselves.

ACHD Working Group

Key Strategic Goals

• 1. Enhance relationships with Local Area Formation Commissions
• 2. Increase transparency and effective governance of Healthcare

Districts through enhanced certification and educational programs

• 3. Educate policymakers, the public and other stakeholders about

the role Healthcare Districts already play in community health

• 4. Review & Modernize the Healthcare District Enabling Act

ACHD Working Group

Healthcare District Enabling Act Update

Guiding Principles:

1. Demonstrate District accountability and transparency to LAFCO (include various measures of accountability; a “menu of options”) 2. Create an inclusive definition of Healthcare Districts 3. Clarify Healthcare District services outside the boundaries of the District

Questions

Contact

Amber King amber.king@achd.org (916) 266-5207 www.achd.org