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Children’s Hospitals Again Cry For Help From Voters. But Are They Really Hurting?

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Back in 2004, California’s youngsters’s hospitals requested voters to approve a $750 million bond measure to assist fund development and new medical gear. In 2008, they requested for $980 million extra. Now they’re hoping voters will agree on Nov. 6 to cough up a further $1.5 billion.

The state’s 13 youngsters’s hospitals deal with California’s sickest youngsters — together with these with leukemia, sickle cell illness, uncommon cancers and cystic fibrosis — so approving their fund-raising requests is a straightforward “yes” for a lot of voters.

Despite the feel-good nature of the requests, some well being care consultants and election analysts query the hospitals’ a number of appeals for taxpayer cash — and are warning voters to assessment this 12 months’s proposal with a crucial eye.

“I think it’s a misuse of the initiative process for private groups to sponsor ballot measures that are intended to benefit them exclusively,” mentioned Elizabeth Ralston, a former president of the League of Women Voters of Los Angeles who analyzes state finance measures for the group. The league recommends a “no” vote on the measure.

Repeatedly asking taxpayers to pay for the development of state-of-the-art amenities isn’t commonplace apply, based on critics who imagine it raises questions on monetary accountability — and whether or not the hospitals really want among the tasks on their want lists.

This sample “could leave children’s hospitals with little incentive to control their costs,” mentioned Ge Bai, a professor on the Johns Hopkins University Carey Business School, who added that every hospital ought to maintain itself.

The initiative, Proposition four, wants a majority vote to go. The 2004 and 2008 youngsters’s hospital bond measures passed with 58.three p.c and 55.three p.c of the vote, respectively.

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The California Children’s Hospital Association mentioned its members can’t afford to pay for his or her constructing and know-how wants with out assist from the state’s taxpayers, who can be on the hook to repay $1.5 billion plus curiosity. The state Legislative Analyst’s Office estimates that might come to $2.9 billion — or about $80 million a 12 months over the subsequent 35 years.

Private donations typically aren’t the reply as a result of donors often specify how their cash must be used, mentioned Ann-Louise Kuhns, the affiliation’s CEO. The posh playrooms and gardens at a few of these hospitals, for instance, are utterly funded by personal donations, she mentioned.

“We do fund-raise, we ask donors to make contributions and we issue our own debt,” Kuhns mentioned. “But it’s hard to completely close that gap for what’s needed … without a little bit of assistance.”

The affiliation, which sponsored the initiative, mentioned the bond measure would assist pay for development, reworking, gear and seismic retrofitting on the state’s eight personal, nonprofit youngsters’s hospitals and the 5 which are a part of the University of California medical system.

The California Health Facilities Financing Authority must approve the hospitals’ use of the bond cash. The company weighs whether or not tasks would increase entry and enhance affected person care however doesn’t decide whether or not a undertaking is important or prudent.

That’s as much as the hospitals.

(Story continues beneath.)

California Children’s Hospitals

The state’s 13 youngsters’s hospitals — eight personal nonprofits and 5 which are a part of the University of California medical system — are asking voters to approve a $1.5 billion bond measure on the Nov. 6 poll to assist them pay for development and gear. If the measure passes, the personal hospitals will obtain about three-quarters of the proceeds, or about $135 million every, no matter their earnings or losses.

Source: Hospital information come from the final monetary report audited by the Office of Statewide Health Planning and Development — both 2016 or 2017. Income info for UC hospitals was not obtainable.

The marketing campaign in assist of the bond measure — funded by the nonprofit hospitals themselves — has raised practically $11 million this 12 months, based on the California secretary of state’s office.

In their final monetary experiences audited by the state, six of the eight personal, nonprofit hospitals reported annual earnings starting from $18 million to almost $176 million. The bond issuance would offer every with $135 million, no matter its earnings or losses.

Almost three-quarters of the bond proceeds would go to the nonprofits as a result of they’ve probably the most beds, however nonprofit hospitals already obtain sure perks, Bai defined. For occasion, they’re exempt from paying property taxes, in addition to state and federal revenue taxes.

Eighteen p.c can be allotted to the UC system hospitals. And the proposal would supply 10 p.c in aggressive grants for roughly 150 hospitals that aren’t labeled as pediatric hospitals, however deal with youngsters nonetheless.

The hospitals argue they should increase as a result of they’re going through larger demand for companies, as common and group hospitals more and more switch their sufferers to them for specialised pediatric care.

Children’s hospitals additionally rely closely on Medi-Cal, the state’s insurance coverage program for low-income folks, Kuhns mentioned. Medi-Cal pays hospitals lower than personal insurance coverage.

Nancy Kane, a professor within the division of well being coverage and administration on the Harvard T.H. Chan School of Public Health, identified that nationwide “many children’s hospitals have the same payer mix, but manage to do this anyway without the government paying for their capital.”

Kuhns mentioned that California hospitals additionally face deadlines to fulfill seismic security mandates. By 2020, they should be prepared to resist a significant earthquake, and by 2030, they should be deemed protected sufficient to proceed working after a quake.

About 28 p.c of the beds within the eight nonprofit youngsters’s hospitals don’t meet the 2030 seismic requirements, so vital investments should be made, she mentioned.

Tim Curley of Valley Children’s Healthcare in Madera mentioned the previous bond measures helped pay for a 60,000-square-foot growth of working rooms. If this 12 months’s bond measure is authorized, the hospital would take into account renovating its laboratories and pharmacy, he mentioned.

At the top of final 12 months, it had slightly below $28 million in funds remaining from the 2008 bond, a report by the financing authority mentioned.

Loma Linda University Children’s Hospital continues to be utilizing its share of the 2008 bond to assist with the development of a nine-story tower that can home most departments and labs.

The new tower, anticipated to be accomplished by 2021, will assist the youngsters’s hospital function independently of the remainder of the medical middle — which serves adults —  and meet the rising demand for house, mentioned Scott Perryman, a senior administrator.

But Ralston, with the League of Women Voters, mentioned Californians ought to take into account whether or not the cash may very well be higher used elsewhere.

“You’re committing state money,” she mentioned, “and that means that’s money not spent on something else” like reasonably priced housing or getting old roads.

Should voters nonetheless approve this third bond measure, Bai wonders if and when the requests for taxpayer cash will cease. “There are always new things to buy,” she mentioned.

Use Our Content This story could be republished without spending a dime (details).

This story was produced by Kaiser Health News, which publishes California Healthline, a service of the California Health Care Foundation.

Ana B. Ibarra: aibarra@kff.org”>aibarra@kff.org, @ab_ibarra

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