'We don't make this decision lightly': Idaho hospital district considers nonprofit transition

The board of directors for Kootenai Health met Dec. 6 to discuss transitioning the hospital district from a government-owned entity to a nonprofit, according to the Coeur d'Alene/Post Falls Press.

Trustees analyzed a Kootenai white paper, which details the pros, cons and considerations of transitioning to a nonprofit 501(c)3. The Idaho Legislature voted almost unanimously to pass House Bill 603, which updates a statute to allow public district hospitals to transition to nonprofits. The bill went into effect July 1.

If Coeur d'Alene, Idaho-based Kootenai — which has been a hospital district since 1956 — converted to a nonprofit, it would relinquish its taxing authority, sovereign immunity and power of eminent domain, according to the report. Kootenai has not exercised its taxing authority since 1995, but the amount of tax revenue that it could take in would be insignificant compared to today's costs, CEO Jon Ness told the Press

Some board members have called for a public vote on the potential conversion. However the law only provides for such a vote if a hospital district is being sold to a private entity, according to the report. Only a hospital district district's board – who are elected by county residents — can make the decision to convert to a nonprofit. 

"We don't make this decision lightly," Liz Godbehere, RN, a trustee and registered nurse who began working at Kootenai 21 years ago, told the Press

Another key consideration for Kootenai is that converting to a nonprofit would open it up to compliance with the National Labor Relations Act, which guarantees the right of private-sector employees to organize into trade unions, engage in collective bargaining and take collective action, such as strikes, according to the report. 

Across the country, there are about 20 large hospitals with more than 300 beds that are hospital districts, according to the report. Two of those are in the Pacific Northwest: Kootenai Health and Kirkland, Wash.-based Evergreen Health, which generates about $28 million in tax revenue.

Having public meetings in exchange for tax revenue works for some rural hospitals, but it no longer does for Kootenai, which operates in a competitive area and is affected by open meeting and public disclosure requirements, according to Robert Colvin, an appointed trustee who told the Press that the nonprofit model "is the only one that fits this community going forward."

A moderated session open to the public will review the white paper on the potential conversion on Dec. 8. 

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Whitepapers

Featured Webinars