A Proposition for Better Health Care

Community-owned, local hospital districts often are the only source of health-care services in rural parts of California. Their function is unique, but the pinch of rising costs and increased competition is not.

So local hospital districts are seeking new ways to bring a wider range of cost-effective health-care services to their patients. They would like to invest in health-care-related businesses, which in turn would help them expand their hospital services.

But the state Constitution generally prohibits state and local governments from owning stock in corporations. Proposition 124, a constitutional amendment, would provide a narrow exemption for local hospital districts. Their investments would be limited to health-care businesses as defined by the Legislature.

This would enable the 57 hospital districts, which derive less than 3% of their operating budgets from tax revenues, some innovative ways to serve areas where they are typically the only health-care provider. For example, under Proposition 124, physicians and hospitals could join together to operate a prepaid health plan. This would help the hospitals cut costs and attract doctors and patients.

Skyrocketing health-care costs, increasing competition and restrictive payments from insurance companies have resulted in changes in how all hospitals do business. Local hospital districts have to meet these challenges, too. Proposition 124 was overwhelmingly passed by the Legislature and it will have no fiscal effect on the state. We urge a yes vote.