Community Ownership Of Health Care Assets


Communities have a perfect right to own specialized assets and know how to finance them. Unlike recreation centres or cultural complexes, however, health care assets sometimes trip people up. They forget that their capital investment is only as good - or safe from "appropriation" - as their plan for covering the costs of operation.

"Say the leaders of hypothetical Community A choose to fund and own a new health care asset. The community has defined the need for a new hospice backed by a solid plan and a clear forecast of need. The capital budget is estimated at $950,000 for construction and equipment. The community forms a co-operative with a co-op friendly lawyer who knows the ropes. The co-op has a board and the board arranges to raise the funds from the community.

"That - the capital budget - was the easy part. The challenging part for Community A is now to source the hospice's operating budget. The capital budget is used to fund the acquisition of the asset. The operating budget pays for running it: the technicians' salaries, new parts, repair bills, power, and the like. Anyone who has ever purchased a shiny new computer and then had to hire a geek to make it perform, knows how meaningless a capital budget is without an operating budget. The first has all the shine, but it's the second that delivers the gold."

Rupert, Ray
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