The Palomar Health board is set to meet to discuss potential revisions to their bylaws that would significantly increase the authority of Mesa Rock Healthcare Management, the private company overseeing the financially struggling healthcare district.
Palomar Health directors are expected to meet Monday evening to consider revising their bylaws — the document that governs all aspects of the public health care district’s operation. Adopting the changes would enshrine Mesa Rock Healthcare Management ’s role in the strategic operation of the financially troubled organization with hospitals in Escondido and Poway.In March, the board approved a 15-year contract with the private not-for-profit mutual benefit corporation.
Mesa Rock was expressly formed, under advice from lawyers hired by Palomar, to employ its top executives, including Diane Hansen, its chief executive officer. The agreement makes the elected board less involved with the strategic direction of Palomar Health, and directors said that it would give executives more leeway to broker agreements with private partners without those discussions being subject to public records law. The board also would no longer hire or fire its CEO directly. The board’s main lever to signal its dissatisfaction with the private company would be to sever the agreement, removing the entire management team. The agreement, believed to be unique in California, leaves ownership of all district property in the hands of the board, which also retains budget approval and continues to employ the vast bulk of Palomar’s employees. For Monday’s meeting, set to convene at 6:30 p.m. in the first-floor meeting room of Palomar Medical Center Escondido, revises a section of bylaws that defines the role of its CEO.The change would allow Mesa Rock to assume the powers of “overseeing and managing the day to day operations of the District, the District facilities, and implementing the strategic mission and vision of the District as directed by the board.” Proposed changes also allow a management services agreement, rather than the president and CEO, to select subordinate officers. A subsection that allows the board to review its CEO annually is deleted, to be replaced with the agreement, which “shall provide information reasonably requested by the board for the purpose of assisting the Board in discharging its duties.” Like most public entities governed by elected officials, Palomar has traditionally maintained a slate of standing committees to oversee specific areas of its operations, forwarding items to the full board for consideration at its monthly meetings. The audit and compliance, governance, and community relations committees would continue to operate. Palomar has faced friction since approving the management services agreement with Mesa Rock, most notably in the form of an anonymous complaint made to the California Fair Political Practices Commission. The complaint alleges that Hansen violated a rule against helping to create an agreement that benefits an individual who participated in its creation. As of Saturday afternoon, the FPPC’s complaint-tracking website indicated that the complaint is “opened.” Palomar has called the complaint frivolous.The board voted on Nov. 26 to allow Hansen to negotiate a forbearance agreement with Assured Guaranty Inc., the insurance company that underwrites its bonds, and it is unclear what sort of demands will be required of Palomar to keep bondholders from asking for immediate repayment. Financial results for the first quarter of fiscal 2025, covering July through September 2024, still have not been posted in “continuing disclosure” statements to bondholders
Palomar Health Bylaws Mesa Rock Healthcare Management Public Healthcare Financial Troubles CEO Board Of Directors California
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