CA system's contract measures OK'd, bond charges dropped

Recently, a San Diego-area publicly-owned integrated delivery system known as the Palomar Pomerado Health District was accused of  misusing bond funds. The accusation was related to the air of secrecy around its contract with Kaiser Permanente, a posture that allegedly violated state public disclosure requirements. Now, however, after 10 months of investigation, a grand jury has concluded that Palomar Pomerado had done nothing to justify the accusation.

Thanks to a local ballot initiative, Palomar was the beneficiary of a 2004 bond issue providing funds of up to $496 million for capital improvements to its facilities. More recently, when it released Kaiser contract documents that included redacted details--including how much money was involved--critics charged that it was involved in something shady that compromised its receipt of the bond money. They suggested that it should have revealed the contract when the bond issue vote was pending.

Palomar executives, for their part, contended that the contract details were trade secrets, and that releasing them would put the system at a competitive disadvantage relative to other hospital systems in the region.

The grand jury agreed, saying that the system was "following prudent business practices," and even seemed a bit surprised by the entire mess. "The grand jury found nothing to suggest there was anything out of the ordinary about the Kaiser Permanente contract," said grand jury report, which actually praised the system's operations.

To learn more about the issue:
- read this San Diego Union-Tribune piece
- read the grand jury report (.pdf)

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