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Hospital seeks 1-cent sales tax referendum

Robert Smith
Pawhuska Journal-Capital

Representatives of Pawhuska Hospital last Thursday explained to the City Council why they would like the council to place a 1 cent sales tax on the ballot to support the hospital.

The council's role is to decide whether to put the proposal on the ballot, so the public can vote in favor of it, or in opposition.

Beth Reed, chair of the hospital board, appeared before the council along with hospital administrator Jason McBride, and hospital board members Ben West and Dr. Cameron Rumsey. Rumsey also is chief of the medical staff.

Hospital representatives clarified there was no immediate threat to the continued operation of the 25-bed, critical-access hospital, but said the not-for-profit institution needs both greater financial flexibility than its business model currently allows, and greater community support in order to help ensure its survival in the long run.

The council gathered information Oct. 22 with a view toward possibly voting to place on the ballot a measure that would call for a 1 cent sales tax to help pay for health care operations, for maintenance and for capital improvements.

Following the discussion, City Attorney John Heskett explained that revisions needed to be made to the proposal documentation, and the council rescheduled a possible vote for Tuesday, Oct. 27.

West said the hospital currently has more than 100 employees and an annual payroll of about $6.5 million. Payments for contract labor come to another $1.3 million annually, he said.

McBride said the hospital's annual revenue is roughly $22 million, with about 95 percent of that coming from Medicare.

Rumsey told the council that the hospital's Medicare reimbursements cover slightly less than 100 percent of the costs they address -- about 1% less.

Reed and other hospital representatives explained to the council how they have fought for the past eight years or so to provide more services to patients in Pawhuska, rather than sending patients elsewhere. Employment at the hospital has increased, the daily patient census has significantly increased, a new clinic has been opened, and the hospital's outreach to the population of the city and surrounding areas is continuing to grow, they said.

Hospital representatives acknowledged there has been discussion of the possibility of constructing a new hospital building at some point, but clarified that the 1 cent sales tax being discussed would not be earmarked for a new hospital building.

Instead, they indicated that the tax would demonstrate community buy-in to the long-term financial stability of the hospital. That community buy-in is one of the elements that prevented any earlier discussions of a major hospital building project from going forward.

Reed said the quality of patient care now provided at Pawhuska Hospital is high, and that the continued viability of the hospital is an economic and social strength that helps to make the community more competitive for new businesses and new residents.

"We are a model hospital for critical access," Reed said. "We're doing a fantastic job with taking care of patients."

The hospital does, however, need additional community support, Reed said, if it is to survive over the longer term.

"If we don't get some community support, the hospital will eventually close," she said.

The language of the draft version of the tax referendum documentation said that revenues from the tax, if approved by the public, would go into an earmarked account.