Mayor Reed Opens Public Discussion on Proposed Health Care Authority of Montgomery

Mayor Steven L. Reed on Tuesday presented the Montgomery City Council and the public with a proposal to establish the Health Care Authority of Montgomery, beginning a broader discussion about creating a long-term public structure to protect healthcare access, strengthen accountability for public investment and support healthcare stability across the region.

The proposal follows Jackson Hospital's emergence from Chapter 11 bankruptcy last month. Reed said the hospital's exit from bankruptcy represented an important milestone but not the end of the community's healthcare challenges.

"This is just the very start of this conversation. It is not the conclusion of this conversation," Reed told the Council. "We just wanted to bring it before the Council, bring it before the public for discussion, so that we can have a contingency plan in place moving forward."

Reed emphasized that the proposed Authority would not represent a City purchase or takeover of Jackson Hospital.

"We don't want to be in the hospital business," Reed said.

Instead, the proposed Authority would create a public structure through which the City and potentially Montgomery County could oversee public healthcare investments while maintaining legal separation between municipal government and private hospital operations.

The proposal comes as the State of Alabama has authorized up to $40 million in bond proceeds for hospital infrastructure. Reed said Montgomery needs an accountable public vehicle capable of receiving, overseeing and deploying capital funding while protecting taxpayers and the City's General Fund from Jackson Hospital's operating debt, pension obligations and malpractice liabilities.

"Public investment requires public accountability," Reed said.

As outlined by Reed Tuesday, the proposed framework would include:

• Independent annual CPA audits of the Authority.
• Restrictions requiring public funds to be used for defined healthcare and capital priorities rather than unrestricted hospital operations.
• Enforceable provisions allowing public funds to be recaptured if performance, reporting or healthcare-access requirements are not met.
• Continued financial reporting and operational requirements governing any remaining City commitments to Jackson Hospital.
• A proposed seven-member voting board consisting of three City appointments, three County appointments and one jointly appointed healthcare-finance expert, with ADECA and the Alabama Department of Public Health serving in non-voting advisory roles.

Reed said the proposal is intended to address healthcare access beyond a single institution. Jackson Hospital serves patients throughout Central Alabama, while Montgomery's broader healthcare system does not have the capacity to absorb a significant reduction in local hospital services.

"We know that we need a standing, accountable public structure that can help protect healthcare access for the long term, not just at Jackson Hospital, but at Baptist, as well as other medical providers in our community," Reed said.

The Mayor pointed to healthcare-authority models used elsewhere in Alabama as examples Montgomery can examine while developing its own approach.

Montgomery County officials have received a briefing on the proposal. Reed said discussions with the City Council, County, healthcare community and other potential partners will continue before decisions about the Authority are finalized.

"At the end of the day, this is about moving beyond stopgap solutions and making sure that we have a comprehensive plan," Reed said. "We have to think as a governing body for the City of Montgomery how we move forward. What we have been doing has not been one that was sustainable for the long term, and hence why we're here today."

For additional information, frequently asked questions, and the latest updates regarding Jackson Hospital and the City's ongoing work to protect healthcare access, visit our Jackson Hospital information page.