In just more than two weeks, the votes will be counted and citizens will know the fate of Grays Harbor Community Hospital — whether it will be run by a public hospital district.
The outcome of the vote will have an overwhelming impact on the hospital’s day-to-day operations, explained Community Hospital CEO Tom Jensen. If the measure passes, Community could see an additional $3 million per year in Medicaid reimbursement, and there is the possibility that local property taxes would add more. If it fails, the hospital could see large cuts to both staff and programs.
“That would be $3 million a year that would go straight into our community,” Jensen said. “Whether it’s in the form of new buildings, salaries, labor, that money would be used to benefit the community.”
“I don’t know any other business in town that can bring in $3 million dollars just because the citizens voted yes,” he added.
The push for the creation of the new hospital district, Grays Harbor County Public Hospital District 2, began only months ago when legislators passed a bill designed to give higher Medicaid reimbursement rates to some rural hospitals, called Sole Community Hospitals, on the condition that they are governed as public hospital districts.
The original bill would have increased Medicaid reimbursement to these hospitals by 25 percent. However, the Senate Ways &Means committee later amended the bill to exclude all non-public hospitals, giving the legislation a better chance of passage in the House and Senate — and putting Community Hospital, a private non-profit business, in a bind.
In order to access this additional funding, the hospital would have to go public.
Another perk of becoming a public hospital, Jensen said, is Grays Harbor Community Hospital would be able to better interact with Elma-based Summit Pacific Medical Center — already a public hospital — and the Grays Harbor County Department of Health and Social Services.
“If we’re all municipalities, we’ll all be speaking the same language,” Jensen said. “It would be much easier for the different municipalities to work together and find cost saving measures.”
Being a public agency could also qualify the hospital for more sources of funding, such as grants, he said.
But as a public hospital, Community Hospital would have access to yet another revenue stream: taxes. According to state law, hospital commissioners could levy a property tax of 75 cents per $1,000 of assessed property value without a vote of the public. However, because of levy caps, it’s unlikely the hospital district would ever be able to collect that much.
In May, Grays Harbor County Assessor Rick Hole estimated that the proposed hospital district — with boundaries including all of Grays Harbor County except Oakville and the portion already included in Grays Harbor Public Hospital District No. 1 in the McCleary and Elma areas — could collect between $2.2 million and $2.5 million if residents are taxed 50 cents per $1,000 of assessed property value.
The estimate is based on 2013 assessed property values and could change considerably before the district is eligible to collect taxes — which would be 2016 at the earliest.
And that’s the hang-up for many voters, Jensen said. Many of the people he has heard from have said they won’t vote for the measure based on the tax issue alone.
But he argued that those voters are losing sight of the original issue: Hospital administrators aren’t after property taxpayers’ money, they’re after the increased Medicaid reimbursement.
“Our original intent was that we would be able to get increased reimbursement,” Jensen said. “The focus was never to tax the community.”
Furthermore, the decision to tax wouldn’t come from Jensen himself or the current board members — it would be made by the new commissioners who will be elected in August.
“This is not the hospital’s decision, this is the commissioners’ decision,” Jensen said. “They could decide to tax nothing at all. That will be up to them, and them alone.”
What if it fails?
But one thing is certain, Jensen said. Citizens can expect major changes to Community Hospital if the measure fails. He said its too soon to tell where the cuts would fall — that would be up to the bondholders. But he expects cuts would come to the less profitable programs, such as maternity care.
“We don’t know exactly what would happen,” Jensen said. “Unfortunately, there’s no way to know. But what we do know is that the bondholders are concerned with one thing, and that’s not serving a population that can’t pay for services.”
“I could speculate, but it could be completely different from what I’m picturing,” he added.
Jensen said he’s talked with current board members and discussed what could happen if the measure fails — but no one wants to make any decisions yet.
‘We’re hoping that the community cares about the hospital as much as the hospital cares about the community,” Jensen said. “We’re here to serve the community, and there’s no other purpose.”
Impacts to SPMC
Creation of the new public hospital district wouldn’t just impact citizens within the new district’s boundaries, it would also have an effect on neighboring Summit Pacific, served by Grays Harbor County Public Hospital District 1.
Board members and administrators for Summit Pacific have long had their eyes on the Montesano area, and a measure annexing the area will likely appear on the November ballot should the Grays Harbor Community Hospital measure fail, said Summit Pacific CEO Renee Jensen, who happens to be married to Community’s Tom Jensen.
“It’s always been part of our strategies plan, and the board members have decided to move forward and ask citizens to add Montesano,” Renee Jensen said.
The areas between Elma and Montesano would also be added, she said.
Tom Jensen said he doesn’t begrudge Summit Pacific administrators and board members for moving the measure forward, even though the Elma hospital’s measure complicates things for Community Hospital.
“They’ve got a board of public hospital commissioners who are doing what they think is right for their community,” Tom Jensen said.
The Summit Pacific Board of Directors is already moving through the process to add the measure to the ballot, deciding to take action at a May 22 meeting and hosting a meeting to hear from the public July 8. The filing deadline for the measure is Aug. 5 — too early for board members to know the fate of Grays Harbor Community Hospital.
Summit Pacific administrators estimate that the Montesano area should be served by three more primary care physicians than are currently available. And if the Summit Pacific measure is successful in November, the medical center will likely add at least three primary care physicians in that area, Renee Jensen said.
“It would give us the capacity to better serve our community,” Renee Jensen said.
But if the Grays Harbor Community Hospital measure is successful, Summit Pacific would be left with Oakville as the only other area that could be annexed.
“If we’re going to consider expanding into Oakville, that’s something we want to do independently so that they can have their own voice,” Jensen said. “There are certainly some people in that area who come here, but the majority go to Centralia.”