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Health care districts get slammed
March 26, 2012, 05:00 AM By Sue Lempert

"As the uninsured go without care, health districts hold reserves of money” was the headline in the Sunday March 11 issue of The New York Times. The article was a product of The Bay Citizen, a nonprofit investigative news organization, which covers the Bay Area for the Times.

The headline referred to our tax-supported Peninsula Health Care District which held a $43 million reserve and refused to provide San Mateo County with $4 million for the health needs of the uninsured. The Peninsula Health Care District is one of 30 such districts in the state that no longer run hospitals. That was their original mission and the reason they were allowed to collect taxes. According to The Times, after World War II, "the state Legislature allowed communities to levy taxes to support hospitals because the state’s rural and low income areas lacked access to basic hospital care.” The Bay Citizen found that many of these health care districts "stockpile vast reserves and divert money to administrative and operating expenses, including lawyers, election fees and board members who earn lifetime health benefits for part-time work.”

According to its website, the Peninsula Health Care District collected $4.2 million in taxes in 2010-11 to support community health programs. But last year, according to the Bay Citizen, it spent just 3.3 percent of its total assets on health related grants. "The rest of the district’s budget went mainly to administrative personnel, communications and lawyers-and into a reserve fund totaling tens of million dollars as of June 2011.”

Four grand juries have called for the dissolution of the Mount Diablo Health Care District based in Concord which has not run a hospital since 1996. There also have been grand jury investigations of the Los Medanos Community Healthcare District, based in Pittsburg.


The San Mateo Civil Grand Jury has also criticized the Peninsula Health Care and Sequoia Healthcare districts because they collect about $9 million annually in taxes and, while they do support a number of community health care programs, they do not contribute directly to fund indigent care for the county hospital or cover its operating shortfalls.

The two hospital districts were formed in the late 1940s to build Sequoia and Peninsula Hospital but they have long since outlived their mission. Any significant change would have to come from the state Legislature. Both hospitals are nonprofit which means they get a hefty tax exemption. That tax exemption is based on providing community health service which includes some level of assistance for charity patients. However, historically the county has provided more than 95 percent of charity care.

Don’t expect a quick fix there, either. That would have to come from a change in federal tax laws. And, of course lobbyists in both D.C. and Sacramento will make sure these lucrative policies remain on the books. Meanwhile, the county hospital is draining funds from the county’s operating budget. It’s a no-win for the county’s medical center and a win-win for the health care districts.


The San Mateo County Civil Grand Jury couldn’t do much with its concerns because the problem lies with state and federal laws. However, both health care districts have maintained they need reserves in case something happens to their newly built hospitals and they have to build another. Also, they provide grants to worthwhile nonprofits in the county. Many of these nonprofits depend on these grants. But there might be less need for some of their services if we were better able to take care of the uninsured. Many county residents without health insurance have to wait over a year to see a doctor. And in that wait, the costs of care escalates. It’s a vicious circle which needs correcting.


Is the Slocum snafu a big deal? That’s the fuss over Warren Slocum’s ballot statement for supervisor which county counsel and the courts, responding to complaints, have ordered changed. Slocum now has to say he was the former county clerk rather than indicating he still is. Slocum held the post for 25 years. Today, it might not be smart to advertise that you have been on the public payroll for most of your working life if you are running for office. As Jon Mays asked in his column last week, is it a concern that Slocum could collect a pension and a paycheck? Supervisor Don Horsley promised to give up his paycheck when he campaigned for supervisor because he is enjoying a healthy pension from his days as sheriff. Will Slocum follow suit?

Sue Lempert is the former mayor of San Mateo. Her column runs in the Monday edition. She can be reached at

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