El Camino Hospital District Affirms Service Review Findings of Efficient, Effective Operations, Questions Recommendations to Limit Autonomy

The El Camino Hospital District (the District) has received and reviewed the Audit and Service Review of the El Camino Hospital District prepared for the Local Agency Formation Commission of Santa Clara County (LAFCo) by a third-party consultant.

May 25, 2012, Mountain View, CA--The El Camino Hospital District (the District) has received and reviewed the Audit and Service Review of the El Camino Hospital District prepared for the Local Agency Formation Commission of Santa Clara County (LAFCo) by a third-party consultant. The District respects the role of LAFCo and will carefully and thoroughly review the findings and recommendations provided in the report.

It is standard procedure for LAFCo to conduct a Service Review every five years, and as with all service reviews, it was intended to serve as a tool to help LAFCo, the public and other agencies better understand the public service structure and ensure that health services are being efficiently and effectively provided in the District. In addition, an audit was performed to answer specific questions related to the District governance structure, its financial relationship to the Hospital Corporation, the financial condition of the District and the Hospital Corporation, the source and use of funds for hospital operations and capital improvements, and the acquisition of the Los Gatos campus.

"This District is pleased the audit confirms that the District and Hospital Corporation are operating appropriately, effectively and efficiently, that it provides a vital health care service in the community and, most importantly, that the District has demonstrated an ability to contain costs and improve financial performance," said John Zoglin, chairman of the District Board of Directors. "The District is proud of its ability to efficiently deliver on its mission to provide medical facilities and health services for the benefit of the people it serves, and our efforts to be a good community partner are being recognized. Recently, the Board of Supervisors of Santa Clara County presented the District with a proclamation highlighting its collaboration with the Santa Clara Valley Medical Center, and praising the partnership for 'making the most cost-effective, direct use of its funds to benefit the health of our community'."

The District strongly disagrees with the report's recommendations to have the District residents give up control of the Mountain View Hospital and to begin actions towards dissolving the District if the recommended changes, that would limit how the District provides its health care services, are not implemented, especially given that the report acknowledges strong, positive results achieved under the current structure.

The report by LAFCo's consultant does not appear to value that the District, and ultimately the voters of the District, have control over the Mountain View Hospital; this is something the District values greatly. Also, the District has serious concerns that vital health care services currently provided by the District through the Community Benefits program would no longer be available to District residents if the District is dissolved.

"State law gives the District certain, autonomous rights over how it spends taxpayer dollars, which allows us, within the confines of that law, to provide quality health care services to the District, and the report acknowledges that we have done so appropriately and consistent with State law," continued Zoglin. "We don't believe it is within LAFCo's authority to ask us to limit our ability to make decisions that are in the best interest of the residents living in our District."

The District welcomes a constructive dialogue about how it can best serve the District and further increase transparency. Already it has taken steps to better inform the community about the relationship between the District and the Hospital Corporation, to enhance financial reporting and to increase outreach and education regarding the District. With respect to implementing governance best practices, the District is currently in the process of interviewing candidates who will be appointed to fill the three new seats on the Hospital Corporation Board, as well as up to 15 committee members to enhance subject matter expertise in the areas of governance, compliance, finance, investments, quality, and executive compensation.

"The District Board takes very seriously its obligation to deliver effective and efficient health care services to the community, and don't believe we should undertake any hasty actions, which could negatively impact thousands of District residents," concluded Zoglin. "We will continue to work closely with LAFCo staff to discuss solutions that will ultimately provide optimal delivery of health care services to our community."

About the El Camino Healthcare District

The El Camino Hospital District was established by voter approval in 1956 in accordance with California Local Hospital District Law. The purpose of the District is to establish, maintain and operate or provide assistance in the operation of health facilities and other health care services provider, groups and organizations that are necessary for the maintenance of good physical and mental health in the communities served by the District. The District, now known as El Camino Healthcare District, encompasses most of Mountain View, Los Altos, Los Altos Hills; a large portion of Sunnyvale, and small sections of Cupertino, Santa Clara, and Palo Alto. The publicly elected El Camino Healthcare District Board of Directors approves tax dollar expenditures, including expenditures for the award winning Community Benefit program. Community Benefit funds are granted each year to local nonprofits, schools and government programs that provide critical health services to the underserved. All District Board meetings are publicly noticed, open to the public, and available for viewing on the District website.