Hospital sales tax discussion heats up

Robert Smith
Pawhuska Journal-Capital

Osage County Sheriff Eddie Virden said late last week that an information meeting might be held on Wednesday of this week in regard to a Jan. 12 Pawhuska sales tax referendum.

Municipal voters are being asked to approve or reject a 1-cent sales tax increase for 20 years to help support the Pawhuska Hospital.

Virden, who said his interest in the meeting is seeing that Pawhuska residents are educated about their options, said he understood that the CEO of First Physicians Capital Group, the company that manages the Fairfax Community Hospital, might make a presentation at the meeting.

Virden did not yet have a time and place for the meeting when he spoke with the Journal-Capital on Thursday, Dec. 31, and again on Friday, Jan. 1. On Sunday, he said the time and place remained officially undetermined but he was shooting for around noon Wednesday, Jan. 6, at the fairgrounds.

“I think we’ve been struggling the way it is,” Virden said of the local economy.

He clarified that he thinks people are willing to pay to make sure there is a hospital in Pawhuska, but said he thinks it is important for people to know if there is a way for them to have the same service without increasing taxation.

District 1 Commissioner Randall Jones said he is interested, as a Pawhuska resident, in attending such a meeting.

“And we need to listen to everything,” Jones said.

Jeff Hill, CEO of First Physicians Capital Group, spoke by telephone Friday, Jan. 1, with the newspaper and indicated that he anticipated making a presentation at a meeting in Pawhuska. Hill said First Physicians will take a neutral stance about how Pawhuska residents should vote in the 1-cent sales tax referendum.

“That’s the citizens’ decision that they will have to make on their own,” he said.

Hill said his presentation would consist of describing the business and service model of First Physicians, and talking about how the company has helped other hospitals.

“We look for a long-term relationship with a hospital,” Hill said, noting that First Physicians makes capital investments in hospitals, keeps local hospital boards in place, seeks to provide a high level of service, tries to be a good steward of financial resources and maintains a community focus.

Hill said First Physicians does not seek tax revenues from communities it serves.

“I think our work speaks for itself,” Hill said, explaining that First Physicians has made investments in the Fairfax community.

In other commentary about the upcoming tax referendum, Pawhuska lawyer and political activist Steve Holcombe recently distributed to people who are subscribers to his electronic mailing list a document in which he provided commentary, as well as a list of questions, and then recommended voting “no” on the proposed tax.

Holcombe urged Pawhuska voters to reject the hospital sales tax “at this time” and possibly revisit it after voting for what he described as “a functional City Council that ‘buys-in’ to finding and hiring a strong city manager before it concerns itself with tax increases."

Holcombe also commented on the subject of community buy-in to the stability of the hospital.

"The buy-in that the hospital is asking for would cover a very small part of its annual operating budget," Holcombe said. "And, by the way, Pawhuska has significantly 'bought-in' to supporting the hospital in the past and continues to do so even to this day.

"The hospital sits on land owned by the city and does so under a generous long-term lease," Holcombe added. "The city also recently deeded (actually, donated) part of that land to the hospital to support the building of the Pawhuska Family Medical Clinic located next to the hospital. So any ask for 'buy-in' should recognize that the city has a long history of making significant contributions toward land or capital expenditures."

Holcombe also discussed in his document what he described as an annual, built-in shortfall in Pawhuska city revenues and questioned why city government would ask for tax support for the hospital, rather than first addressing its own shortfall situation.

Beth Reed, chair of the Pawhuska Hospital board, said that several of the issues Holcombe raised do not relate directly to the ballot measure or to the needs of Pawhuska Hospital. 

"He doesn't understand. He's putting bad information out there," she said.

Reed said she and Dr. Cameron Rumsey, the hospital's chief of staff, had reviewed concerns that Holcombe expressed. Reed said that persons with whom Holcombe has shared his document about the referendum should know that Medicaid Expansion in Oklahoma will mean only an estimated economic benefit to Pawhuska Hospital of some $35,000 per year over five years. She also questioned the depth of Holcombe's understanding of regulatory and legal factors that affect Medicare reimbursements to the hospital.

Reed said there are numerous cost elements to understand. For instance, Pawhuska Hospital had in excess of $2.6 million of bad debt for care in 2019-20, she said.

"I just want people to understand how important our hospital is," Reed said.

She said the health care system with which Pawhuska hospital deals is both complex and sometimes problematic.