New law gives hospitals more investment options
A bill to help state- and county-owned hospitals, including Douglas County Hospital, was signed into law Thursday.
Gov. Mark Dayton Mark Dayton approved legislation that will reduce current restrictions on public hospitals, allowing them to invest funds in securities to generate more capital for operations and improvements for their facilities.
The bill was authored by Sen. Bill Ingebrigtsen, R-Alexandria, and Rep. Mary Franson, R-Alexandria.
"This piece of legislation is common sense reform that will allow 26 publicly owned hospitals, like Douglas County Hospital, to level the playing field with nonprofit hospitals so that they have the option to invest funds for future expenses," said Ingebrigtsen in a previous news release. "Changes to rules will not only make it easier for public hospitals to operate, but also have the potential to increase the quality of care and facilities for future patients."
The legislation rolls back some stringent investment restrictions that had previously prohibited publicly owned hospitals from making securities investments.
Under the new law, public hospitals now have the choice to adopt written investment policies that would provide them more flexibility to invest hospital revenue funds in securities that are recommended to them by investment advisors, banks or trust companies.
Leaders at the Douglas County Hospital are very familiar with the legislation; they invited local legislators to a strategic planning session last fall and encouraged them to pursue the bill.
Last year, the Douglas County Hospital considered changing from a county-owned hospital to a private, nonprofit 501(c)(3) organization. The investment restrictions on the hospital were a key reason why it considered the change, according to CEO Carl Vaagenes, although it ultimately decided to remain county owned.