What is
a Public Hospital District (PHD)?
Simply put, hospital districts are community supported governmental entities
charged with delivering health care to their communities. They fulfill
a vital role in Washington State's health care system because without
them, many people would be unable to receive health care in their own
communities. The Washington State legislature granted local communities
the ability to create their own hospital districts in 1945. Nearly half
of Washington's 98 hospitals are part of a public hospital district. Hospital
districts are authorized not only to operate a hospital, but to deliver
any service to help people stay healthy-physically, socially and mentally.
Because they're owned and governed by local citizens, hospital districts
tailor their services to meet the unique needs of their individual communities.
It is this community-based mission that defines and distinguishes hospital
districts from other health care entities.
Overview and Purpose
of Public Hospital Districts
Public hospital districts belong to the family of special purpose districts
and municipal corporations. Thus, they are governmental entities created
by statute and operating under all applicable statutory, constitutional
and regulatory provisions of the State of Washington and the United States.
Sources
of Public Hospital Districts' Power
Public hospital districts are organized and exist as a result of chapter
70.44 of the Revised Code of Washington (RCW). It is this statute that
created public hospital districts and fundamentally defines their purpose,
operations, powers and limitations.
Power
Versus Duties, Generally
Hospital district powers are those things which a public hospital district
may do, as expressly or implicitly granted by state law. Duties, on the
other hand, are those things which a district must do, as required by
state law. Of course, there are also things which a public hospital district
may not do, which then falls outside the range of both powers and duties.
This distinction may prove useful in thinking about a specific activity
of a public hospital district.
Locations
and Boundries
An up-to-date listing and map
of Washington public hospital districts is provided. The vast majority
of public hospital districts are located in areas considered to be "rural"
in character, emphasizing the importance of public hospital districts
in meeting the challenges facing rural health care.
Comparisons
and Differences From Non-Profit Hospitals
Public hospital districts operate approximately 40% of the entities licensed
as acute care hospitals in Washington. The vast majority of the other
hospitals are operated as not-for-profit corporations, with a handful
owned and operated by private corporations on a for-profit or proprietary
basis.
In many cases, public hospital district hospitals and not-for-profit
hospitals may appear very similar. Both may be focused on community service
with "profits" being applied not to rates of return for investors
but to enhanced community services, facility upgrading, or subsidized
care for persons unable to pay the full costs of service. The major difference
is that Washington state law reinforces the need for public hospital districts
to maintain this focus in a very precise way, for example through the
election of board members (not-for-profit members are normally appointed)
and strict legal restrictions on the use of funds for certain purposes.
Also, as a municipal corporation, many of the documents and proceedings
of a public hospital district are open to close public scrutiny through
Open Meetings and Public Records laws, while not-for-profit activities
are monitored in a much more general fashion through state and federal
review activities. As a last example, public hospital district commissioners,
as public officials, are prohibited from various conflicts of interests.
RCW 42.23.030 prohibits a municipal officer from being "beneficially
interested, directly or indirectly, in any contract which may be made,
through or under the supervision of such officer, in whole or in part,
or which may be made for the benefit of his office..."
In exchange for meeting these procedural barriers and requirements, which
may be viewed as the tools for assuring that a community truly desires
a public hospital district, hospital districts are able to access the
benefits associated with being such an entity, such as access to tax revenues,
low cost bonds, exclusions from payment of certain taxes, and the like.