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Hospital Officials Discuss Reasons For Proposed Tax Increase

September 07, 2018

In the recent public hearing held to facilitate comments from the community about Wilbarger County Hospital District’s proposed tax rate for tax year 2018, a number of individuals requested clarity about the necessity of the increase. Hospital leaders said the increase is directly linked to three key areas.

“This year, Wilbarger General Hospital experienced both an increase in operating expenses, primarily related to the cost associated with establishing an employed provider network, and a decrease in reimbursement,” Melanie Milner, Chairman of the WGH Board of Directors said. “In addition, there has been an escalation in bad debts and charity care which have negatively impacted the hospital’s financial performance.”

These three key areas are outlined and quantified below:

-- At one time, WGH was supported by community medical providers who were independent and not employed by the hospital. Over time, this model changed as physicians and providers sought to focus their medical practices on specific niche areas of medicine that emphasized out- patient services.

In order to remain competitive and to provide the broadest scope of services possible to members of our community, it became necessary for us to employ medical providers, knowing that we would do so at a substantial increase in cost. In fact, our contracted medical providers and employed medical providers accounted for $3.3 Million of WGH’s expense last year.

-- Declines in reimbursement are not new in the healthcare industry and last year, WGH experienced a significant reduction in reimbursement under the new State employee Blue Cross insurance plan. In fact, the reduction in payment from this plan alone has accounted for decrease in reimbursement of $1 Million.

-- Finally, as insurance plans now incorporate high deductibles, as the need to provide care for indigent members of our society increases, and as government programs like Medicare and Medicaid reduce payments to hospitals, the burden of uncompensated care increases. Thus, just this year to date, our burden of uncompensated care is $2.3 Million higher than it was this same time last year.

“While no one wants higher taxes, it is important to note that it has been many years since WGH has requested an increase in the tax rate,” Milner added. “WGH simply cannot remain viable in the coming years without supplemental funding and greater support from the citizens of our community.

“Wilbarger County needs a strong hospital for the benefit of each of us. In this spirit, we hope to all work together toward a more sustainable future,” Milner said.