AB918: ‘Good Initiative, Bad Judgment’

A good friend use to say “Good Initiative, bad judgment” when referring to well-intentioned effort that has gone bad. Sometimes we start out with the best of intentions, but fall short in the executed plan. It is my sincere hope that the good initiative of Assemblymember Eduardo Garcia’s AB918 bill will not result in bad judgements by all stakeholders.

This bill creates a single healthcare district for Imperial County. Most believe this is the right thing to do. Due to the economic realities of providing healthcare today, the cost to provide services far exceeds funding availability including revenue from the government and health insurance reimbursement. This is most acutely felt in rural communities all over the US.

Imperial County is no exception. It is abundantly clear that this economic condition cannot sustain both ECRMC and PMHD as inpatient care facilities. The creation of a single healthcare district appears to provide a pathway forward, merging both hospitals and Heffernan Memorial under one district. This would reduce cost, duplication of service, increase revenues, and stabilize the hospital workforce. The goal is good but the challenge is actually making it happen.

The strength of AB918 is the initiation of a basic framework for the creation of a single health care district, the dissolution of PMHD and Heffernan, an application to create the district through LAFCO including a feasibility study and identification of funding sources. The bill also creates the need for a county wide ballot initiative, and formation of a new governing board to be elected from seven districts similar to Imperial Valley College.

In my and others opinion the weaknesses of the bill are found in the order of how the process is initiated and omissions of process. The dissolution of the districts, financial feasibility and funding analysis come after the ballot initiative. The next weaknesses are found in the omissions referencing a tax base. A single healthcare district will require the support of all county residents through property tax assessments. The bill is silent on that. The new district cannot survive without tax revenue leaving it dependent on billable revenues. The bill does not provide a methodology for the inclusion of ECRMC as an independently city owned hospital. Creating a new district without the inclusion of ECRMC would render the entire effort pointless. Legal authority combining independent hospitals under California law are not referenced in the bill.

Now for the “elephant in the room”. Both hospitals carry bond debt.

ECRMC completed a seismic retrofit funded by $125 million bond and PMHD’s bond debt is currently $14 million and will need to do a seismic retro fit by 2035 based on current law.

Amendments to AB918 are needed prior to final passage of the bill and full transparency is needed so everyone knows what they are voting for.

1. The dissolution of the current hospital districts should only take place after voter approval.
2. The financial feasibility and tax base analysis should be completed and made public prior to the ballot initiative.
3. ECRMC, PMHD, and Heffernan shall provide all financial data to assist in the financial feasibility studies.
4. Upon voter approval of the measure, ECRMC should make an affirmative step, i.e. Letter of Intent to be absorbed into the new district.
5. Segregate bond debt from the inclusion in the new hospital district allowing each community to continue servicing the bond debt without burdening the new district.
6. Reference the existing law under Title 11 as a guideline for the integration

None us want create a new district only to lose it all because we didn’t take proper steps to do it right. My dad used to say “if you’re going to do something, do it right the first time”. Let’s do this right.