Matt Ready

A bureaucracy worships the rule of bureaucracy. A bureaucrat uses the bureaucracy to get what they want for their personal agendas.

A public hospital commission is a government entity of elected leaders. The leaders swear to uphold the constitutions of the USA and Wa state. A bureaucrat who claims that elected leaders have sworn to abide and comply with the “policies” chosen by the majority of the board of elected leaders, wants to remove the ability of an elected leader to have any dissent to the actions of the board majority. This is a method of destroying the basic concept of democracy- where each elected leader is elected to voice their opinion and do and say things they believe are in the interests of the greater good.

Forcing elected public hospital commissioners to oversee a public hospital district – but do so as members of a non profit board overseeing the public hospital district – is a way to force those leaders to obey corporate policies – which will be used to limit public oversight, accountability, transparency, and the ability of your elected commissioners to do anything about it.

A public hospital district is a municipal corporation. What does that mean?

A Public Hospital District in Washington State is a governmental entity created by voters within a specific geographic area to provide publicly funded healthcare services. These districts are municipal corporations, similar to cities and counties, and operate under Chapter 70.44 RCW of Washington State law.

Key Features of a Public Hospital District in Washington:

1. Publicly Owned & Governed – Managed by an elected Board of Commissioners, typically five members, who oversee operations and finances.
2. Taxing Authority – Can levy property taxes to support healthcare services.
3. Healthcare Services – Operate hospitals, clinics, nursing homes, ambulance services, and wellness programs depending on community needs.
4. Local Control – Voters within the district determine leadership and financial support through elections.
5. Broad Service Scope – Can provide not just hospital care, but also preventative care, mental health services, and emergency medical services (EMS).
6. Nonprofit-Like Function – Although government-run, they often collaborate with private healthcare providers to improve services.

Example:

Jefferson Healthcare in Port Townsend is a public hospital district (Jefferson County Public Hospital District No. 2) that operates a critical access hospital and various clinics, serving the local population.

Financial & Legal Structure of Public Hospital Districts in Washington State

1. Legal Structure

• Public hospital districts are municipal corporations established under RCW 70.44, similar to cities and counties.
• They are political subdivisions of the state, meaning they are subject to public records laws, open meetings laws (RCW 42.30), and public bidding requirements.
• Governed by a Board of Commissioners (usually five members) elected by district residents for six-year staggered terms.

2. Financial Structure

Revenue Sources

Public hospital districts operate as nonprofit-like entities but have multiple funding sources:

1. Property Taxes
   • Can levy up to 75 cents per $1,000 of assessed property value without voter approval.
   • Can seek additional levies (e.g., EMS levies) with voter approval.
2. Patient Service Revenue
   • Most revenue comes from Medicare, Medicaid, private insurance, and direct patient payments.
   • Some services (e.g., critical access hospitals) receive cost-based reimbursements from Medicare.
3. Bonds & Loans
   • Can issue general obligation bonds (subject to voter approval) for capital projects.
   • Can take out loans for equipment, facility expansions, or infrastructure improvements.
4. Government Grants & Subsidies
   • Eligible for federal and state grants (e.g., rural healthcare funding, emergency response grants).
   • Some districts receive special state funding for essential healthcare services.
5. Partnerships & Contracts
   • May enter into agreements with private healthcare providers, universities, or nonprofits.
   • Some districts contract out services such as ambulance services, mental health programs, or specialty care.

Financial Accountability

• Must submit annual financial reports to the Washington State Auditor’s Office.
• Subject to public budgeting and auditing requirements under RCW 43.09.
• Required to hold public meetings for major financial decisions, ensuring transparency.

Example of Financial Operations

A typical public hospital district might:

• Collect $2 million from property taxes.
• Earn $50 million in patient service revenue.
• Receive $3 million in grants.
• Secure $10 million in bonds for hospital expansion.

IF YOU GIVE CONTROL OF YOUR PUBLIC HOSPITAL DISTRICT TO A NON PROFIT CORPORATION, YOU LOSE PUBLIC CONTROL AND ACCOUNTABILITY SAFEGUARDS. Just a theoretical comment irrelevant to anything except… is it?

But why would you even think about giving control of your public hospital district to a non profit corporation? Maybe healthcare has changed and a big restructuring would be good for the community in some way. Is the best thing to do, to abandon the safeguards of a publicly controlled municipal corporation governed by democratically elected commissioners in favor of a non profit corporation that could at any time vote to changes its governing structure and transparency to whatever it wants whenever it wants? Is this type of radical restructuring the only type worth considering?

Analysis

If two or more Washington public hospital districts want to radically restructure, there are several possible models besides forming a nonprofit corporation to oversee them. Below is a comparison of potential restructuring options.

1. Nonprofit Corporation Oversight Model

• Description: The hospital districts create a new nonprofit corporation to oversee operations, governance, and potentially financial management.
• Pros:
  • Increased operational flexibility (nonprofits can operate outside some government constraints).
  • Can raise private funds and enter into partnerships more easily.
  • Unified leadership without dissolving individual districts.
• Cons:
  • May reduce public oversight as a nonprofit board isn’t publicly elected.
  • Could lead to conflicts over accountability between the elected commissioners and the nonprofit board.
  • Potential for mission drift if nonprofit governance does not align with public interest.

2. Full Merger Into a Single Public Hospital District

• Description: The two or more hospital districts merge into one larger district with a single elected Board of Commissioners.
• Pros:
  • Unified budget and governance streamline decision-making.
  • Eliminates redundant administrative costs.
  • More tax revenue pooling, allowing better investment in healthcare infrastructure.
• Cons:
  • Requires voter approval.
  • Risk of local communities losing influence in decision-making.
  • Could be disruptive to existing labor agreements and management structures.

3. Interlocal Agreement for Shared Governance

• Description: The districts remain independent but sign an interlocal agreement (ILA) to share administration, facilities, or specific services.
• Pros:
  • Retains separate identities while allowing cost-sharing.
  • No need for voter approval.
  • Can focus collaboration on specific departments (e.g., emergency services, IT, or billing).
• Cons:
  • Coordination challenges if leadership has conflicting priorities.
  • Not as strong as a full merger in terms of financial and operational integration.
  • Potential for unequal benefit distribution if one district has greater financial need.

4. Creation of a Joint Operating Authority (JOA)

• Description: The hospital districts form a separate public entity under RCW 39.34, which has independent taxing authority and management.
• Pros:
  • Maintains public ownership and control but allows joint decision-making.
  • Can issue bonds and levy taxes to support regional healthcare.
  • Clear legal framework under Washington law.
• Cons:
  • Complex governance structure may slow decision-making.
  • Requires voter approval and legal agreements.
  • Can create bureaucratic layers, adding to costs.

5. Public-Private Partnership (PPP)

• Description: The hospital districts enter into a contract with a private company to manage operations while retaining public ownership.
• Pros:
  • Private expertise can improve efficiency.
  • Possible cost savings through operational streamlining.
  • Avoids the political difficulties of a full merger.
• Cons:
  • Less direct public control over healthcare decisions.
  • Risk of profit-driven priorities conflicting with community needs.
  • Potential staffing changes and wage adjustments.

Comparison Table

Conclusion

• If efficiency and flexibility are the priority, the nonprofit oversight model makes sense.
• If strong public control and accountability are key, a merger or Joint Operating Authority is better.
• If they want minimal disruption, an Interlocal Agreement might be the best option.
• If they need private sector expertise, a Public-Private Partnership could work.