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LAFCO directs staff to study nonprofit hospital community benefits after legal briefing
Summary
After a legal overview of state requirements under SB 697 and OSHPD rules, LAFCO voted to continue the item and directed staff to begin preliminary data collection and outreach to hospitals and state agencies to assess compliance and possible local responses.
Teresa Stricker, LAFCO general counsel, told commissioners on April 20 that state law requires nonprofit hospitals to conduct community health needs assessments every three years, produce community benefit plans with community input, and file annual reports with the Office of Statewide Health Planning and Development. "State law requires non profit hospitals in California to provide community benefits that serve the public interest in exchange for their tax exempt status," Stricker said, and she listed typical qualifying activities including disease prevention, medical education and charity care.
Stricker told the commission that forming a hospital healthcare district would not directly solve the oversight question because the district formation purposes are limited to operating facilities, ambulance services, or certain health programs; LAFCO could, however, conduct a special study to identify compliance gaps and recommend options. She said that if a hospital receives city funding there may be contractual levers to condition future funding on compliance; for hospitals receiving no city dollars, local authority is limited and state action or public pressure may be required.
Chelsea Bullard, a legislative staffer, summarized state statute SB 697 (1994) and explained that OSHPD acts largely as a clearinghouse and does not perform robust enforcement or deep analysis of hospital community benefit plans. Bullard also noted a 2014 Greenlining Institute report with recommendations that mostly require action at the state level, but that some local actions and transparency measures could be pursued.
Commissioners and public commenters debated local options and limits. Commissioner Haley Ronan and others argued a comparative study of how much hospitals spend on community benefits relative to the tax advantages they receive could be useful. Public commenter Eric Brooks urged stronger local action, including exploring development controls or taxation, citing concerns about hospital closures and service shifts.
Action: the commission voted to continue the item to the call of the chair and directed staff to begin preliminary work: collect hospital information, contact the hospital council and OSHPD, and prepare a comparative dataset if feasible. Chair Sandra Lee Feuer and Interim Administrative Officer Angela Calvillo agreed staff could begin preliminary outreach while reserving deeper analysis for the new executive officer.
