Ashland has $4 million to spend after Asante ended inpatient care at the city’s hospital. Now, city leaders must decide what to do with the money.
The City Council heard proposals Monday from community groups seeking a share of the money. Among the ideas are creating a local health district, partnering with healthcare providers or Southern Oregon University, and setting the money aside while the city pursues other funding.
The money stems from Asante's 2013 takeover of Ashland Community Hospital. As part of the agreement, Asante committed to operating the hospital through 2028 or paying the city $4 million.
Asante ended inpatient services at the hospital in May and converted it into a satellite campus of Rogue Regional Medical Center. The emergency department and some outpatient services remain open.
Ashland Community Hospital had been operated by the city from 1923 to 1996, when it was turned over to a nonprofit that later expanded operations into Talent and Medford. Competition from larger hospitals in Medford contributed to financial problems at the Ashland hospital, leading to the merger with Asante in 2013.
Fernando Gapasin of the Save Our Ashland Community Hospital coalition urged the city to create a health district.
“We're going to go against the grain, and we're going to maintain rural healthcare," he said.
Gapasin and the coalition have spent months exploring what a health district could look like in Ashland.
A health district operates similarly to a fire or library district, using property taxes to support a hospital or clinic. There are about two dozen health districts in Oregon, but none are along the Interstate 5 corridor.
The majority of revenue for the health districts comes from hospital operations. Property taxes make up a small portion of their budgets.
The Southern Coos Hospital and Health Center reported receiving about $860,000 from property tax revenue last year, compared with $25 million in patient revenue.
But high operating costs can still leave rural hospitals struggling financially, and property tax revenue can help keep them open.
Other proposals discussed Monday included potential collaborations with Southern Oregon University and La Clinica, bringing an Oregon Health and Science University medical school program to Ashland, and setting aside the $4 million and instead seeking federal rural healthcare dollars.
Some council members, including Dylan Bloom, said the city should consider using part of the money to address the city's financial woes.
“We've had conversations around here about how we need to build up our reserve fund, how it has been depleted," said Bloom. "How we need to fund our facilities fund so that we can repair City Hall. We can repair a lot of deferred maintenance in the city that serves the community as well.”
The city’s financial policy calls for half of any unexpected revenue to be used for capital projects, future liabilities or reserves. Bloom said the city could follow that policy while using the rest of the money to support community healthcare projects.
The council was divided on whether to keep the money together or split it among different city funds.
"It is no more a windfall than anything else that's specified in a contract," Councilor Bob Kaplan said. "We have the flexibility to reserve the full amount, the $4 million, for some period of time until some future date that the council decides what to do with it."
The council will need to decide how to use the money by October, when staff begin work on the budget. That gives community groups more time to develop their proposals.
