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The Deterioration of a Vision

THE DETERIORATION OF A VISION

GREENVILLE, MS – The vision to bring the health status of Mississippians from the 50th worst rating in the USA to a position which encompasses less obesity, less heart disease, less hypertension, less diabetes, etc., is facing a setback from which recovery may never be accomplished.  The improved health status vision that many Mississippi leaders have labored long and hard to achieve is being thrown to the wind by the current strategy, philosophy and plans of Mississippi’s top leadership team.. a philosphy that is systematically diminishing the healthcare resources of the state’s poorest citizens.  The latest example of the many steps being taken to further decrease the quality of life of these Mississippians is the plan to tax Mississippi’s hospitals.

Hospitals in Mississippi’s most impoverished rural areas now face the realistic possibility of having to pay a tax that could change the way these health care facilities conduct business and provide for the public‘s health needs. The proposed $90 million dollar hospital tax, on top of the many recent and numerous Medicaid cuts, will require the state’s hospitals to collectively share this tax burden.  A key fact not widely known is that HALF of Mississippi’s hospitals*1 operate with profit margins of less than one percent and most of this grouping struggle with negative bottom lines.

Many of the hospitals in this “lower financial health” category serve a large number of uninsured, indigent patients. For example, Greenville’s already stressed safety net health care system, anchored by Delta Regional Medical Center (DRMC), provides $40 million per year in uncompensated medical care for people in one of the nation’s poorest economies and a population with the nation’s greatest health disparities.  Additionally, Mississippi hospitals have for some time been required to pay an annual “bed tax”.  For DRMC, this bed tax which is applied to all beds, occupied or not, amounts to $401,000 per year.  If we examine the amount of uncompensated care and the per bed tax for facilities in poorer communities in Mississippi, it appears that hospitals already paying more than their fair share of the state’s tax burden.

Exacerbating the financial burden incurred by these facilities defies logic and common concern for citizens and begs several questions:

• What’s the purpose of further confounding the healthcare status of Mississippi’s poorest citizens?
• What rationale exists for pushing unprofitable distressed hospitals further into the red?
• Where is the compassion for those who need medical treatment more than others?
• Why has there been adamant opposition to a cigarette tax yet a continuing fervent pursuit of a hospital tax to address the state budget shortfall?

If the hospital tax does become a reality, some say it will be simply resolved by hospitals passing the tax through to patients by raising their charges.  While this strategy will surely be used by many of those hospitals who have patients who can pay such increased charges (or taxes), those hospitals serving patients who don’t have that ability to pay will be faced with a different set of circumstances.  These struggling hospitals will find no alternative but to further reduce their operating costs.  This is universally done through the reduction of healthcare services, through cutting salaries, by eliminating jobs, or a combination of all these approaches.  If this hospital tax plan is approved by the legislature, Delta Regional’s share of the $90 million tax would be a hard to digest total of $1,700,000. Those lost dollars, which are in addition to $401,000 already being paid in the form of a bed tax, will significantly impair DRMC’s ability to continue meeting the exceedingly great demands of providing healthcare at acceptable levels.

To justify their support of the hospital tax plan, many in the State Senate are being asked to believe highly erroneous propaganda such as, “Hospitals will get a 6 to 1 matching return by paying this tax.” One must ask just how many Mississippians actually believe that hospitals, or anyone for that matter, would vehemently oppose a plan, as most hospitals are, that would multiply any tax, any assessment, or any investment by 600%?  If this plan actually involved such a massive return on their dollars, why aren’t Mississippi’s hospital officials screaming for the passage of such a bill rather than vigorously opposing the current plan?  The hard, cold, simple truth of the matter is that this tax plan will produce a $90 million dead expense for hospitals with no return whatsoever.

Logical solutions do exist.  Why can’t a portion of the $800 plus million stimulus fund package awarded to Mississippi for the Medicaid program be used?  Why can’t funds from the recent $40 million lawsuit settlement with Microsoft be used?  Why can’t the $5 million tax revenue being obtained from the nonparticipating cigarette manufacturers be applied to the Medicaid budget?  Why not allocate some of the $5 to $10 million being generated from the sale of contraband cigarettes be considered? Why can’t Arkansas’s innovative tax on fructose syrup*2 approach for their Medicaid program be considered?  If you haven’t heard, that neighboring state applied a 2 cent (a high caloric sweetener concoction used in carbonated soft drinks which contribute heavily to obesity problems) and annually produces $40 million for the Arkansas Medicaid program.  Many options exist as opposed to taxing distressed hospitals.

What can be done at this point regarding this hospital tax that directly affects the healthcare options and outcomes of citizens throughout the state, especially those in the economically challenged areas?  Will sending an earnest appeal, a sincere request, a strong message to the Governor, the Lieutenant Governor, and to the Senate make a difference?  That is the least that can be asked of those who have quality of life concerns for Mississippians.  Please make this call, write this letter, speak to neighbors and ask them to immediately make contacts and express their views about the high risk involved with the plan that will harm healthcare in Mississippi.

The reduction and loss of hospital services frequently translates into life and death issues.  Concerned citizens must push for more logical solutions than a $90 million tax that will further deteriorate struggling Mississippi hospitals.  Remember, as stated earlier, we are talking about half of the state’s 108 hospitals. There is no justifiable defensible reason that Mississippi’s weakest should shoulder such a huge part of this burden nor that the noble vision to improve the health of Mississippians be shelved.


L. Ray Humphreys
CEO
Delta Regional Medical Center
Greenville, MS

*1 Mississippi Hospital Association Survey

*2 Jacobson, M.F. & K.D. Brownell. (2000).
Small Taxes on Soft Drinks and Snack Foods
to Promote Health. American Journal of
Public Health, 90(6), 854-857.
http://www.cspinet.org-reports-jacobson.pdf

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