The Hiawatha Community Hospital is seeking voter support for a countywide half-cent sales tax that would sunset in 10 years.
Voters can go to the polls on Tuesday, Nov. 5, or contact the Brown County Clerk’s office for information on advance voting. If passed, the sales tax in Brown County will be 9.5 percent, not considering any other special tax votes.
This same sales tax was defeated in a special election in May by just 29 votes. At that time, the hospital had pledged 20 percent of the earnings from each year’s sales tax – approximately a total of $750,000 annually – to the Community of Horton to help with healthcare in that community. Eighty percent of the sales tax earnings would go to Hiawatha Community Hospital.
HCH CEO John Broberg said following the closure of the Horton Community Hospital last spring, Hiawatha Community Hospital has seen an increase of patients served in the clinic, hospital and ER that come from South Brown County.
In a recent visit with Broberg, he told the Hiawatha World that the hospital had not had the funds to put toward capital improvements at the hospital in recent years, so were behind on maintenance and equipment upgrades. He said, recently, they had some equipment in the radiology department go down causing a disruption in patient care. This equipment failure is in direct relation to not having funds available to replace it proactively.
“In 2019, we have had more equipment failures than in the past several years,” he said.”We are seeing equipment failures that are impacting care.”
In fact, he said, the needs for the next several years are about $1.5 million a year to bring the hospital capital needs up to date, so additional funds will have to be obtained through fundraising and the HCH Foundation.
Broberg said they are providing information through the hospital’s Facebook and website and are encouraging residents to contact them with questions. He said there will not be any Town Halls scheduled this time around.
Broberg has stated that if the sales tax initiative does not pass in the November election, that the hospital will be asking for the county’s support through a mill levy – which is assessed to property taxes of county residents.
During the interview with Broberg, he shared several FAQ questions on the issue. He encouraged residents with additional questions to contact the hospital or visit HCH-KS.org/focus-on-the-future.
FAQ: Q — Has the hospital been busier with more revenue coming in?
A — Yes, I am sure that is due in part to the closing of Horton Hospital. Prior to Horton Hospital closing, 12 percent of our ER patients were from Horton. Since their hospital closed, about 24 percent of our ER patients come from Horton.
Q — How is the hospital’s cash flow and have you been able to catch up on payments on a line of credit taken out in October 2018. And if the hospital is doing better, is there a need for the sales tax revenue?
A — The hospital has been busier when compared to last year at this time. The hospital is also seeing improved collections. The margin is (1.0%) compared to 2018 which was (3.0%). Our budget for 2019 that was shared with the commissions is (1.1%). We are at budget, but still operating in the red. Our cash flow is not enough to fund the capital needs of the hospital. Excellent patient care is directly affected by the equipment available to our team. Cash flow issues have prevented a manageable maintenance schedule and aging equipment is becoming obsolete.This tax support can provide approximately 50-70 percent of necessary funding to ensure that our equipment meets current and future standards, giving us the ability to continually provide excellent care.
The hospital has made $1,200,000 in payments on the line of credit it obtained for short cash needs for operational purposes, helping with the ebb and flows of cash coming into the hospital. Those payments were: $150,000 on June 20; $150,000 on July 29; $300,000 on Aug. 20; $300,000 on Sept. 12 and $300,000 on Oct. 4.
I shared with the Hiawatha City Commission that I thought we would have the line of credit paid off in two months...we made our fifth payment Monday, reducing our LOC to $200,000.
Q — The hospital deducted 2 percent from personnel salaries, in addition to reducing benefits. Have those been restored yet to all staff – including providers?
A — The 2-percent salary reduction was restored to all staff, except providers. They received a restoration of their on-call pay, which is still at a reduced rates. Some benefits have been returned, with retirement benefits being reinstated this month – which was included in the budget for this year. Currently, the hospital is working on the budget for 2020, which could include looking at the reinstatement of lost compensation and benefits that has not yet been addressed.
Q — Why not raise funds through a capital campaign, rather than ask for a tax? Holton Hospital has recently seen success with fundraising.
A — Fundraising isn’t usually done for on-going capital needs – it’s more targeted for renovation projects. We will do a capital campaign for renovations that we will need in the future, for several areas of the hospital that have not been addressed in recent years. Tax support focuses directly on patient care by providing equipment upgrades and facility repairs. Tax support provides broader access to funds for equipment and repairs that would be limited by a capital campaign. A capital campaign will more narrowly focus on the future to meet the major facility improvements that are needed to update our 1951 building to meet the patient care needs for inpatients, OB and the emergency room.
Q — During committee meetings prior to the previous election, city and county officials asked if a representative could be placed on the board for more engagement with the hospital, along with more transparency. Will that option still be offered?
A — We have two openings on the board and I plan to visit with the City of Hiawatha and Brown County Commission to see if they would have someone who would be interested in being on the board. We are still open to that. I have been providing monthly reports to both commissions on the status of the hospital’s finances to provide more transparency.
Q — The hospital has restructured its Family Practice Clinic hours and reduced the time for walk-in clinic. Will this cause additional patients in the ER, thus possibly creating more bad debt?
A — Morning and afternoon walk-in clinics were looked at and we decided to eliminate the afternoon time. However, we still save daily appointments during that block so patients can still get in for same-day appointments.
Q — Why 10 years instead of 5 years?
A — Ten years is a more efficient use of taxpayer dollars and shows long-term county commitment. Accordin to a recent economic development report, consumers spend about 22 percent of their household income in Brown County on items that are subject to sales tax. With an average household income in Brown County of $46,964 the annual impact of the sales tax would be $51.66 per year per household. The ability to refinance our current bond saves interest expense and allows immediate access to an additional 2 million dollars to replace aging equipment. There is a nationwide shortage of rural Family Practice physicians. A 10-year tax reassures potential new physician recruits that we are focused on the future of healthcare thriving in Brown County.