California’s Quiet Proposition: $750M for Children’s Hospitals

SAN FRANCISCO — A little-known California measure to authorize $750 million of general-obligation bonds for children’s hospitals has a relatively narrow lead among voters, according to a Field Poll released yesterday.

Proposition 61, which will appear on the Nov. 2 ballot, had a 46% to 35% lead in the poll, which surveyed 549 likely voters in late September. That was down slightly from a 47% to 31% lead the measure held in August.

The poll was taken before Gov. Arnold Schwarzenegger’s announcement Monday that he opposed Proposition 61 and two other non-bond related health care ballot measures.

In an election with 16 statewide ballot initiatives, the children’s hospital bond had captured little attention.

Proposition 61 has been overshadowed by a $3 billion bond proposal to finance stem-cell research, as well as a referendum on a law requiring many businesses to provide health insurance to employees, and two proposing tax increases to fund specific health services.

Susan Maddox, president of the California Children’s Hospital Association, said the organization has not run ads for the bond measure yet, because it is saving its resources for an ad blitz starting next week.

The bond measure would divide the proceeds into two parts: 20% would be divided among five University of California hospitals for their children’s programs, and the remaining 80% would fund other children’s hospitals in the state. Eight hospitals qualify under the criteria for the remaining 80%, according to the Legislative Analyst’s Office.The eight children’s hospitals that would qualify are: Children’s Hospital and Health Center San Diego, Children’s Hospital Los Angeles, Children’s Hospital and Research Center at Oakland, Children’s Hospital of Orange County, Loma Linda University Children’s Hospital, Lucile Salter Packard Children’s Hospital at Stanford, Miller’s Children’s Hospital in Long Beach, and Children’s Hospital Central California.

The qualifying institutions are members of the Children’s Hospital Association, which have provided the entire $4 million raised so far for the pro-bond campaign this year, according to campaign finance documents. There is no organized opposition.

The language of the measure would limit each of the eight hospitals to $74 million from the bond measure, unless there is authorization remaining after 2014, at which point the limit would be removed.

To qualify for access to the bond funds the hospitals would have to meet criteria designed to prove that the projects funded would help improve health care for children, particularly needy children. The California Health Facilities Financing Authority, which operates under the state treasurer’s office, would enforce the criteria.

“There’ve been [state] budget issues, we understand that, but our need is greater than the time it’s going to take to wait that out,” Maddox said. “I know it’s a lot of bonds and a lot of debt for the state but this is one of those times where I think it’s justified.”

Children’s hospitals are squeezed, Maddox said, because a disproportionate number of their patients come from the Medi-Cal program, the state’s version of the Medicaid program for the needy.

Because their patients are children, unlike regular hospitals, they get no payments from the Medicare program for the elderly, which has much better reimbursement rates than Medi-Cal, Maddox said.

“With more and more managed care, more and more of the sicker children are coming to us,” she said. “We have to be ready to serve them."