OHH Keeps Tax Rate Steady as Costs Rise, Reimbursements Fall

Olney Hamilton Hospital directors voted Aug. 28 to keep the hospital district’s property tax rate unchanged at $0.445670 per $100 valuation, even as officials acknowledged that the hospital faces a significant financial challenge after posting a $1.6 million cumulative operating loss through the first five months of the fiscal year.

The board accepted the recommendation of its finance committee to maintain last year’s rate rather than seek additional revenue from taxpayers. Board member Ron Rogers said increasing the rate would generate relatively little additional revenue compared with the hospital’s overall financial needs.

A one-percent increase would bring in only about $30,000 more, board members said.

“We think in the interest of where we are in our building project and our capital campaign that it’s better just to stay where we are at our current rate,” Mr. Rogers said.

The decision comes as OHH officials work to reverse a difficult start to the fiscal year.

Mr. Rogers told directors the hospital posted a $977,000 operating loss for July. Charity care and bad debt have become particularly significant burdens, with charity and bad debt equaling 27.8 percent of operating expenses for the month, compared with a Texas median of 12.3 percent.

OHH recorded $4.88 million in gross patient revenue during the month, but more than 70 percent was deducted for charity care, Medicare and Medicaid adjustments and other contractual deductions. That left about $1.4 million in net patient revenue against roughly $2.2 million in operating expenses for the hospital itself.

For the first five months of the fiscal year, the hospital’s cumulative operating loss stood at $1.6 million, compared with a loss of about $188,000 at the same point last year.

The average deduction from gross revenue has risen to 70.1 percent this year from about 65 percent previously, Mr. Rogers said. At the same time, expenses have increased by double digits while net revenue after deductions is down about 2 percent.

“We just gotta figure out how to get paid for it,” Mr. Rogers said, noting that the hospital is seeing growth in several departments and continuing to serve more patients.

Admissions are up 6 percent for the year, and emergency room visits also have increased, Acting CEO Stasha Siegert told directors. But July brought several unusual expenses, including employee health claims that ran about $100,000 above average.

Charity care and bad debt write-offs totaled about $730,000 for the month, although officials said part of that reflected accumulated accounts being written off at once.

Mrs. Siegert said the hospital is attacking the problem on several fronts, including working to identify insurance coverage for patients listed as self-pay and more aggressively pursuing denied insurance claims.

Board Chairman Dale Lovett said hospital officials have identified the financial problem and are developing a strategy to address it.

“We’ve been there before,” Mr. Lovett said. “We can get out of it. It’s just gonna take a lot of work.”