Montgomery officials are considering a new health care authority that would oversee public investments in local health care following Jackson Hospital’s emergence from Chapter 11 bankruptcy.
Mayor Steven Reed presented the proposed Health Care Authority of Montgomery to the City Council on Tuesday, beginning what he described as an initial public discussion rather than a finalized plan.
“This is just the very start of this conversation. It is not the conclusion of this conversation,” Reed told council members. “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.”
The proposal comes less than a month after Jackson Hospital officially emerged from Chapter 11 bankruptcy on Sept. 14. The hospital had filed for bankruptcy protection in February 2025 following years of financial strain.
Reed emphasized that creation of the authority would not amount to the city purchasing or taking over Jackson Hospital.
“We don’t want to be in the hospital business,” he said.
Instead, the proposed authority would serve as a legally separate public structure for receiving and overseeing public health care investments.
Under the framework presented Tuesday, a seven-member voting board would include three city appointees, three county appointees and one health care finance expert jointly selected by the city and county. The Alabama Department of Economic and Community Affairs and Alabama Department of Public Health would participate in non-voting advisory roles.
The authority would also be subject to annual independent audits and restrictions governing how public funds could be spent. Reed’s proposal calls for provisions allowing public money to be recaptured if performance, reporting or health care access requirements are not met.
Alabama law has allowed cities and counties to establish health care authorities as public corporations since passage of the Health Care Authorities Act of 1982.
The proposal also comes as substantial public funding is already committed to Jackson.
The City of Montgomery has committed $22.5 million to the hospital, while Montgomery County has committed $17.5 million. The state has separately authorized up to $40 million in bond funding for capital expenses following Jackson’s emergence from bankruptcy.
Reed said the proposed authority is intended to provide oversight of future public investments without exposing the city’s General Fund to Jackson Hospital’s operating debt, pension obligations or malpractice liabilities.
“Public investment requires public accountability,” Reed said.
He also said the discussion extends beyond Jackson Hospital, pointing to the importance of maintaining sufficient hospital capacity across Montgomery and Central Alabama.
Montgomery County officials have been briefed on the proposal. Reed said discussions with the City Council, county officials, health care providers and other potential partners will continue before any final structure is adopted.
“At the end of the day, this is about moving beyond stopgap solutions and making sure that we have a comprehensive plan,” Reed said.
Sawyer Knowles is a state and political reporter for Yellowhammer News. You may contact him at [email protected].
