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Board Seeks Legal Fight to Block Initiative

Health care: County counsel says the ballot measure, which would divert tobacco funds to private providers, is unconstitutional.


Supervisors on Tuesday asked county attorneys to pursue legal action, including a court injunction, to block a ballot initiative that would strip Ventura County of more than $225 million in tobacco settlement funds and give the money to private health care providers.

The Board of Supervisors decided to fight after County Counsel Jim McBride told the board he believes the initiative improperly usurps its authority. "It's unconstitutional," he said, after a two-hour closed session on the issue.

The controversy over the tobacco settlement money surfaced last week, when the county hospital's chief competitor announced plans to put a measure on the November ballot that would hand over the funds to private health care providers. The money is to be paid out over 25 years, at $9 million a year.

County officials reacted angrily to the proposal by Community Memorial Hospital Executive Director Michael Bakst and began studying countermoves that culminated in Tuesday's declaration of open hostilities.

In the closed session, supervisors also authorized McBride to plan a "counter-initiative" for the November ballot, in case legal action fails to stop the Bakst initiative. Neither supervisors nor McBride would elaborate on what such an initiative would do. They also would not say how soon any legal action would be brought against the private health care providers' plan.

A spokesman for the hospital harshly criticized the supervisors' actions. "It's government by Politburo rather than democracy," said Mark Barnhill. "The will of the people prevails. I don't know what they could be thinking."

Barnhill said the hospital's legal experts think the initiative can survive any legal challenge, because California law gives voters the power to direct how taxpayer funds can be spent. If the voters want to give it to private hospitals, that should be their option, he said.

But the supervisors argued that it is Bakst--not government--that taxpayers need protection against.

Supervisors say Community Memorial wants to run Ventura County Medical Center out of business, because it's a source of competition. They say he's used the ballot box before to further that goal, pointing to a 1996 voter initiative that blocked the medical center's expansion efforts. Community Memorial spent $1.6 million on that campaign.

Bakst says county governments throughout California are wrongly trying to use tobacco settlement funds to pay off debt, settle lawsuits and build prisons, rather than pay for health care programs as citizens were led to believe the money would be used.

"The supervisors want to try to make the case it's their money, not the people's money," Barnhill said. "The point of the initiative is for people to say, 'We want the money spent on health care, not on fines.' "

This year, supervisors have earmarked $3.1 million of the tobacco money to help pay back the federal government for years of improper Medicare billing practices in the county's mental health system. While supervisors have pledged to dedicate future settlement dollars to health care programs, they've passed no ordinance to that effect and are not bound by law to honor their commitment.


Supervisors say the settlement was designed to reimburse government for costs already incurred in treating poor, sick smokers in the past. To take that reimbursement out of public coffers and give it to private organizations to improve their bottom lines is wrong, they say.

Bakst says taking the money from the county is fair, because the county already funds the medical center's treatment of indigent patients, but doesn't do the same for private hospitals, which have to absorb those costs.

Supervisor Judy Mikels balked at that assessment. Of the seven private hospitals in the county, six, including Community Memorial, are nonprofit. That means they receive millions of dollars in tax exemptions every year--which is government's way of repaying them to care for indigent patients, she said. The county hospital treats 83% of indigent patients countywide, according to a 1997 study. Community Memorial treats about 1%.

Mikels said she has asked Chief Administrative Officer Harry Hufford for an analysis of how much Community Memorial and the other nonprofit hospitals receive in tax exemptions each year, compared with how much money they lose providing indigent care.

"They're not driving this puppy anymore," she said of Community Memorial's campaign. "We're going to drive it."


Supervisor Frank Schillo said if private hospitals are having financial problems, they should have a round-table discussion with county officials rather than begin a divisive initiative process.

Meanwhile, Ventura County's lawyers have been in contact with the county counsel's office in Orange County, where a similar voter initiative drive is underway. Under that one, 80% of the county's settlement fund would be made available to private health care providers. Orange County does not have a public hospital, however, and most indigent care there is provided by the UC Irvine hospital and reimbursed by the county.

Orange County Counsel Laurence M. Watson said he believes the initiative attempts in both counties are unconstitutional.

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