The California legislature created healthcare districts in 1946 with the mandate to improve healthcare in their communities. Elected at large, district directors are the elected officials whose sole mission is to promote the health and welfare of the residents of the communities served by the district.
37 of 79 no longer operate hospitals (2017 report)
Health Care Districts had their origins in the aftermath of World Word II. American soldiers returned from the war in need of extensive medical treatment and often hospitalization. California was in the grip of an acute hospital bed shortage. Significant portions of the state had no access to necessary healthcare services.
The Legislature responded to this hospital shortage by enacting the Local Hospital District Act. In 1994, they were renamed as “health care districts” reflecting that health care is increasingly being provided outside of the hospital setting. The Health Care District Act law authorized communities to form Special Districts to construct and operate hospitals and other health care facilities to meet local needs. Communities were authorized to impose property tax assessments, with voter approval, to help subsidize community hospital and health care services. The first Healthcare Districts were formed in 1946 and 1947. (The Association of California Healthcare Districts was originally organized in 1951 to foster the success of the Healthcare Districts by providing Trustee education and being an effective legislative advocate.)
As of 2019, there were 79 Healthcare Districts. 42 of those 79 Districts operated 47 hospitals within their District boundaries. Fifteen Healthcare Districts had either leased or sold their Hospital facilities to for-profit or not-for-profit Health Systems but still provided health related services to the people within their District boundaries.
Some HCDs are attracting attention due to competition for scarce property tax dollars and are therefore vulnerable to criticism if LAFCo (Local Area Formation Commission), grand jury or others conclude they are not serving the public interest. LAFCo is responsible for doing a municipal service review of districts every 5 years and the last one on MCHCD was in 2014.
Many of the hospitals owned and operated by the Health Care Districts are considered rural by the State of California. This represents almost 50% of the rural hospitals in the State. They are the chief source of inpatient, outpatient and emergency care to California’s rural residents and employees in the agriculture, fishing, mining and timber industries. They provide a substantial portion of healthcare related services to the underserved regions of the state, which includes minority populations, the under-insured and the uninsured. Some districts are “community-based health districts” and do not run hospitals.
In recent fiscal years, a significant majority of the District hospitals experienced financial losses ranging from a $100,000 to over $10,000,000.00. During the past six years, five Healthcare Districts have filed for public entity bankruptcy reorganization ("Chapter 9") and two hospitals have actually ceased to operate.
Districts had, and still have the power “to do any and all things that are necessary for, and to the advantage of” any type of health promoting service or health care facility. Specifically, districts can support the following: health care facilities, including substance abuse and mental health programs; outpatient service and free clinics, programs for seniors, including transportation; nurse training; physician recruitment; ambulance services; health education programs and a variety of wellness and rehabilitation activities. In short, the law allows for anything that is “necessary for the maintenance of good physical and mental health in the communities served by the districts”.
Mendocino Coast Health Care District was formed in the early 1970’s in order to build the hospital. Prior to that there were two hospitals operating in Fort Bragg (and four others in Willits and Ukiah). The Board of Directors is elected by the voters in the district. Healthcare Districts must submit annual financial reports to the California State Controller and obey all state laws governing public records, record keeping, elections, and public access to documents.
The district covers the same areas as the two coastal school districts – from Westport to Elk. Currently, MCHCD, with voter approval, has leased the hospital to Adventist Health. Information about the lease is available through the MCHCD website. The Affiliation with Adventist Health - Mendocino Coast Health Care District (specialdistrict.org)
