Sales tax proceeds allow debt retirement

Robert Smith
Pawhuska Journal-Capital

It has been almost a year since a fourth penny of city sales tax began to be collected in Pawhuska, to provide additional funding for the local hospital, and city government had passed along to the hospital slightly more than $588,000 by March 2022, records show.

Hospital officials say the new source of support has allowed them to pay off a significant amount of old debt, and they say that the 25-bed critical access facility's service capacity is expanding.

The city sales tax rate in Pawhuska increased from 3 cents to 4 cents in April 2021. The overall sales tax levied on goods and services in the city (with the city, county and state components added together) increased to 9.75 cents on the dollar.

That includes 4.5 cents for the state, 1.25 cents for Osage County and 4 cents for the city.

Pawhuska voters approved the additional penny in a referendum in January 2021, by a vote of 253 to 119, and the increase took effect in April of that year. Voters had been told the hospital was not in danger of immediate closure, but that additional financial support was needed from the community to help assure its longer-term viability.

Cohesive Healthcare Management and Consulting, based in Shawnee, manages Pawhuska Hospital. Cohesive said that a five-person oversight board for the sales tax proceeds had approved a distribution of $361,000 to pay off government debt that was accruing at "over a 10 percent interest rate." This was not loan debt, but debt that accumulated through the process by which the federal government handles financing for critical access hospitals.

"By extinguishing the government debt with its high interest rate, the hospital was able to focus on expanding certain services," Cohesive Healthcare said in a statement. "Physical therapy services had already outgrown available space in the hospital and, with COVID limitations, there is an abundance of outpatient physical therapy needs going unmet. The hospital has now leased space, purchased new equipment, and will hire new staff to help meet the physical therapy needs of the community."

Beth Reed, chair of the Pawhuska Hospital board, said the hospital has leased space at Tri County Tech's Pawhuska location to expand physical therapy services.

"Outgrowing space is a common problem with services at the hospital," Cohesive Healthcare said. "As an example, the health clinic was opened in October of 2018 and has already grown to over 8,000 annualized visits. The average daily census at the hospital was 5 in 2016; today it is over 14. This reveals there have been large unmet healthcare needs around the Pawhuska area. It also reveals that the hospital, its providers and its staff are offering a high quality of care. Addressing when and how to expand needed services will be an ongoing challenge."

Dr. M. Cameron Rumsey, chief of staff at the hospital, said that physical therapy services had been “backed up for a while” due to space considerations. He estimated that Pawhuska Hospital may see its physical therapy work almost double in the next six months to a year.

Rumsey said he thinks the hospital is improving its overall capacity.

”We’re kind of getting in a really good position at the hospital to begin doing a lot of really great things,” he said.

Rumsey added that the telemedicine program for school districts now serves five districts — Pawhuska, Hominy, Barnsdall, Shidler and McCord. He indicated that he anticipates more expansion of that program by the fall of this year.