The Governor was apparently upset by an opinion-editorial piece that ran the previous Friday in the Columbus Dispatch, written by OHA President Jim Castle. In particular, the Governor didn't appreciate use of the words “tax" or “Governor Stickland." You can read the op-ed here… it seems innocuous enough to me. Hey, if it looks like ketchup and tastes like ketchup, it is probably …
In addition, it was shared with us that the Governor didn't make the decision to “fee" all Ohio hospitals, but rather that decision was made by his staff. Here's the thing, any leadership training I have received (not to mention real-life experience) has taught me that it is always your fault when things go wrong and never because of you when things go well. With all due respect to the Governor, I don't think he gets a pass on this, and neither do our State Senators and Representatives that voted for a State budget that includes this “fee."
You may be wondering… what is this guy talking about? As most folks know, the State of Ohio had a significant budget deficit last year as it tried to finalize the biennial 2010-2011 State Budget. So, the State assessed Ohio hospitals more than $728 million, and used that money to receive Federal Matching Funds (read stimulus dollars) in the amount of an additional $1.7 billion. They then gave us a 5% Medicaid rate increase (our hospital, like most, loses money on Medicaid patients and still does after the 5% increase). After all of this, at the end of the day, Ohio hospitals annually are losing approximately $150 million due to this new “fee." At Memorial Hospital, this “fee" will cost us approximately $760,000 in year one of the budget, and even more in year two.
Now here's the kicker… We are not being taxed on profits, but on our expenses. If a person from North Dakota is driving through Marysville on their motorcycle, meets the business end of a car, and ends up in our Emergency Room without medical insurance, we may spend thousands of dollars making them well or stabilizing them for transfer. Then, as a reward for our altruistic behavior, we are taxed 1.61% of the money we spent. We're taxed on donations we make to community organizations like the Y, events like the Relay for Life, indigent patients that cannot pay us… the list goes on and on. You've heard of sin taxes… taxes on booze, cigarettes, gasoline, etc… now we're being taxed for our virtue. How dare we give back to our local communities or take care of people who otherwise cannot take care of themselves with an assumption that we won't be taxed on doing so.
Never mind the fact that hospitals are some of the largest employers in the State. In fact, Ohio hospitals employ 330,000 Ohioans. That does not count the physicians, the people that work for our physicians, our vendors, suppliers, and more. As you may have witnessed, the State of Ohio is notoriously incompetent at economic development. So what does the State do? Attack one of the few remaining strong industries we have left. Here in Union County, Memorial is the second largest employer in Marysville and the third largest in Union County. If we were located in most other rural Ohio counties (most other rural counties don't have a Honda and a Scotts Miracle-Gro), we would be the largest employer in those counties. Besides that, we generally pay pretty well, have good benefits, and offer a great retirement plan. Isn't that what the State should want… to have as many good employers as possible?
This is what you call a "jobs-killer." $760,000 a year is a lot of money, and without it, something has to give. All of our money goes to salaries, benefits, services, equipment and buildings. Which one goes first? Speaker Budish, in a conversation I was part of, compared us to the libraries and mental health. Those industries are on the wrong end of this deal too, but with one critical difference. The State cut its own funding for mental health and libraries. In our case, Ohio didn't cut our funding; we don't receive funding from the State. They taxed us and took money that wasn't theirs. They took money (by feeing/taxing us) that belonged to Memorial Hospital… more specifically Union County… to solve their problems while leaving the local communities to clean up their mess.
This tax will cause harm to Memorial Hospital and every other hospital in the State of Ohio. It will cause layoffs, service reductions, and the delay or cancellation of many projects. Our employees are our most important asset, and always will be. We will do all that we can to protect them, and we have been successful so far in doing so. That said, $760,000 per year is a lot of money, even to the largest of organizations, and its impact on us is significant. This tax will put some community hospitals, but not ours, on the endangered species list.
The hospital industry has proposed a solution to our elected leaders that will reduce the hospital tax by $150 million:
- Subtract the cost of Medicare from the tax base because Medicare cases are currently reimbursed at a level that does not cover our costs.
- Subtract uncompensated care from the tax base as this penalizes hospitals for providing heathcare to the uninsured.
- Reduce the tax rate from 1.61% of costs to 1.5% to reduce the tax burden on our Ohio hospitals.
Of course, we would not propose a solution that does not have a funding source. The funding of our solutions would come from the following:
- Medicare Part-D Clawback Refund (the refund received for premiums paid to the federal government for the dual eligible (Medicare/Medicaid) population)…saves $151 million
- Current Medicaid Under-Spending (total under-spending in the state Medicaid program as of March 2010 as compared to budgeted amounts)… $332 million
- Enhanced Federal Medical Assistance Percentage (eFMAP) (extension of the eFMAP by Congress would leave state lawmakers with sufficient funds to implement the short-term)… $720-$900 million
You can help us by logging onto www.nohospitaltax.com and using their templates to send letters to Governor Strickland and our other elected officials, voicing your support for our proposal and your opposition to them taxing your local, independent, self-sufficient community hospital. To date, hospital employees and other friends of Memorial Hospital have already sent more than 400 letters on our behalf. We thank them wholeheartedly for their support. Locally, State Representative David Burke and Senator Karen Gilmore have both met with us on this topic and have been strong allies with their support.
Our opponents in the legislature will state that many groups suffered reimbursement cuts during the last budget, while hospitals received a 5% Medicaid update. Don't drink their Kool-Aid. Those same groups were spared a new tax and did not bring additional funds to Ohio. Ohio hospitals are paying for their own 5% Medicaid update and are still $150 million short. Our opponents will also say that, given the economic situation of the State of Ohio, it could have been much worse. They fail to mention that Ohio hospitals already filled $1.7 billion dollars of the State's budget hole. The State of Ohio has over $330 million in Medicaid under-spending to help fund implementation of a hospital tax relief solution. Ohio also has more than enough unallocated funds to provide $150 million in relief to Ohio hospitals.
Please join us in making our voice heard at the Statehouse. We would certainly appreciate any support you can provide.
