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Are Health Care Districts Hoarding Money that Could Help the Uninsured?

Are Health Care Districts Hoarding Money that Could Help the Uninsured?

Picture of Barbara Feder Ostrov

A scandalous situation involving a health care district in one of California's most affluent regions raises the question: how are these taxpayer-supported agencies spending their money?

Or are they hoarding it?

Earlier this month, the Bay Citizen reported that the Peninsula Health Care District was sitting on $43 million in reserves even as it refused a request by a local county government to dip into its reserves to help finance health care for 6,000 uninsured people. Digging deeper, reporters Jennifer Gollan and Katharine Mieszkowski found it wasn't the only district hoarding cash while local governments struggled to care for poor and uninsured residents.

The Peninsula Health Care District is one of about 30 such health care districts, out of 74 statewide, that no longer run hospitals - a departure from their original mission when, 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.

An examination by The Bay Citizen has found that many of these 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.

"The outrage factor is we have public agencies that are collecting money that is not being used for the purposes for which the agencies were originally established," said Judy Nadler, a senior fellow in government ethics at Santa Clara University's Markkula Center for Applied Ethics and a former mayor of the city of Santa Clara. "For a public agency to hold on to that money with the thought that it may be used at some point for some project defies explanation."

At a time when states are slashing Medicaid benefits and cities and counties are scaling back on health care for the uninsured, this is a pretty appalling state of affairs.

The question is, is it happening in your community?

Health care districts, known in some cases as hospital districts, can be found in California and around the nation. They're quasi-governmental bodies originally set up decades ago to run public hospitals when cities or counties couldn't or wouldn't do the job, and they're largely not accountable to counties that are responsible for caring for the poor. (This report from the California Health Care Foundation traces their history in the state and this California Healthline analysis examines whether health care districts that no longer run hospitals should be dismantled and highlights legislative attempts to better monitor and regulate their activities).

It's worth checking out the budget, programs and financial reserves of your local health care district and asking whether there are any attempts at the state or local level to tighten up regulations and monitoring of district activities.

District officials, for their part, argue that the districts' money is better spent on preventive health programs, such as health education and child obesity efforts, rather than on direct services for the uninsured.

That's a worthy argument, but would taxpayers agree it's the best use of their money?

Related Content:

San Mateo County's top medical chief rips Peninsula health district for ignoring uninsured adults – Bay Area News Group

List of California Health Districts – Wikipedia

As the Uninsured Go Without Care, Health Districts Hold Reserves of Money – Bay Citizen

Should California Reconsider Health Care Districts? – California Healthline

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