Olympic Medical Center set to propose tax levy

Later this year, Sequim taxpayers will be asked to approve an Olympic Medical Center tax levy increase of 33 cents per $1,000 valuation and the hospital is trying to figure out how to make this particular pill an easier one to swallow.

The tax levy is now 11 cents per $1,000 valuation. The increase would bring the levy up to 44 cents.

The proposed levy was unveiled at a May 14 board of director’s meeting. The board must approve the plan by May 27 in order for it to be put to the voters on the Aug. 19 primary election ballot. The board is expected to approve the levy at its May 21 meeting.

The levy is one of eight strategies the hospital is

employing to cut costs and gain revenue. Others include improving efficiency, focusing on revenue-generating services such as cardiology, seeking more grant opportunities and decreasing physician turnover.

“If we do all eight of them, I’m sure we can have a very good future,” Olympic Medical Center’s CEO Eric Lewis said. In 2007 OMC reported a minus 0.7-percent operating margin. Basically, while the hospital’s costs keep rising, there’s not enough revenue coming in.

“I don’t think we have a massive financial crisis,” Lewis said, but he added that the tax levy would avert a crisis and would help — in conjunction with the hospital’s action plan — to see the hospital through another five to 10 years.

If adopted, the money generated by the tax levy increase would go toward improving the hospital’s emergency room, inpatient services’ physician access, programs on wellness and chronic disease management.

The hospital serves about 8,000 uninsured people annually. Often these patients wait until a preventable or chronic disease or ailment becomes an emergency, come to the hospital’s emergency room and end up as inpatients. Under the law, public hospitals can’t turn these patients away.

By emphasizing preventive medicine and chronic disease management, OMC hopes to cut the number of patients receiving emergency care.

But perhaps the largest causes for OMC’s financial woes are Medicare and Medicaid. Seventy percent of OMC patients are covered by one of the two federal insurance programs and, according to Lewis, each is notorious for delaying reimbursements or never paying hospitals at all. In 2007, for example, OMC charged $70,442,057 to Medicare but only $37,225,883 was paid.

“It’s a big challenge and Medicare is simply not paying its fair share,” Lewis said. According to Lewis, OMC continually advocates and lobbies for adequate Medicare and Medicaid funding.

Under the current tax levy, OMC receives $836,060, 0.7 percent of the hospital’s overall budget. If the proposed increase were to be adopted, funding is estimated to become $3,344,241, making up 2.8 percent of the OMC budget.

What does this mean for taxpayers? A house with an assessed valuation of $250,000 — the average value of a home within OMC’s district — would pay $9.17 per month under the new tax levy, or $110 a year.

“This is a lot of money, but we think there would be benefits,” Lewis said, adding that the hospital doesn’t have very many capital projects in its future and this should help aid OMC financially.

The May 14 meeting was mostly attended by hospital staff and supporters such as Austin Lee, who said he views the hospital levy as another form of insurance. But what about those district taxpayers who don’t see the proposed increase as an investment so much as a burden. As resident Mike Blackwell put it, “They’re taxing us out of our socks already.”

Many present at the meeting suggested personalizing the tax levy and putting the proposal in terms residents can understand. In other words, what would be lost in the way of hospital services?

Once the board approves the proposal, a committee will be set up to campaign for the levy. Although board members can voice their support, hospital staff must remain neutral on the proposal during working hours and not one cent of OMC’s budget can be used for campaigning.

“It’s challenging at times, but it’s good,” Lewis said of the hospital. “I just want the public to know you own this property.”
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