Two things were apparent at the hospital board’s Truth in Taxation hearing held on Thursday, December 23. The public in attendance wanted the board to know that it didn’t appreciate the levy imposed by the hospital board, and the board wanted the public to know that it wasn’t entirely their fault.
The board ultimately voted for an $800,000 levy on all Cook County property owners, including seasonal property owners. The levy will go into effect, 2011.
Originally, the board proposed a $1.2 million levy, but the county agreed to release $376,000 from “old” 1 percent sales tax fund reserves and the hospital decided to use $362,056 in hospital capital reserves to come up with the funds it needs to balance the budget in 2011.
All told, without the levy and the extra “found” money, the projected shortfall for 2011 was $1,538,056.
Figured into the budget is the amount it takes to operate the hospital and care center, ambulance service, home health, emergency room, lab and radiology departments. Wages, benefits and pensions total $7.8 million of the budget.
Hospital Director Kimber Wraalstad presented operating figures to the 25 – 30 people crowded into the meeting room.
Total revenues, including donations, added up to $13,386,746. There was a $2,516,708 deduction from the revenue side, however, because of “payments not received from the government, insurances and others unwilling or unable to pay,” said Wraalstad.
Revenues are down, said Wraalstad, “We think people are delaying services. They’re putting off having that mammogram or physical. When you have a reduction in volume, it impacts your revenue.”
Use of fund balance urged
One sticking point came when Judy Motschenbacher asked, “Is it true you have a fund balance? That you have money in the bank? I’ve heard a figure of five million dollars, but I’m not sure that’s tied to the hospital or to the county.”
Yvonne Gennrich, the hospital’s financial officer replied, “We have about $6 million in the bank.”
Motschenbacher said that is a lot of money to be sitting on, and expecting the public to come up with even more during a recession is asking too much.
But, said Wraalstad, the fund balance could be higher—and maybe should be higher—because of potential unexpected problems the hospital might have to pay for in a pinch.
“Have you spelled out how much money you are going to collect on $100,000 valuations of property like the school did with its levy?” Motschenbacher asked.
“No,” said Wraalstad.
“It would be good to know that figure,” said Motschenbacher.
Close it down?
Another man who said he was a seasonal resident asserted, “I don’t collect these services from the hospital. I’m drawing a line in the sand. Money doesn’t grow on trees.
“This is a band-aid station. If you have any real problems they send you down to Duluth. I don’t find this reasonable. If you can’t sustain business, maybe you should close down,” he declared.
That elicited a response from Hospital Board Member Tom Spence, “To say we serve no purpose in this community is absurd. If we closed down the nearest services would be in Two Harbors or in Duluth. I’m not sure how many people would want to live here or visit here if we didn’t have the facilities we have here.”
When asked if the hospital and care center were separated in the budget, Wraalstad answered no. “Because they share so many services, we haven’t broken that up for comparison,” she replied.
But, when pressed, Wraalstad said the care center was losing money. How much, she didn’t know, but the care center was in the red. “We could look at closing it,” said Wraalstad.
“That’s a typical response from a bureaucrat when the public is asking them to look at their budget. ‘We’ll cut the police, we’ll cut the fire department, close the hospital.’ We’re not asking you to close anything. All we’re asking is that you tighten your belt like the rest of us do when money is in short supply,” said a property owner who identified himself by saying he had worked in the military for 35 years.
Hospital Board Member Howard Abrahamson said the community made it known loud and clear in a meeting about four years ago that “they want the care center. Theywant to be able to take care of their aging population.”
He said a problem is that not only have Medicaid rates not gone up since 2002, “they have gone down 14 percent.”
A lively discussion ensued about what could be done to increase Medicaid rates to reflect 2011 costs. Spence told the audience to contact their legislators, Tom Bakk and David Dill. “I’m not saying they have been doing a bad job for us. They’ve worked hard for us. But they need to know how this affects a small facility like ours.”
Wraalstad said she worked with legislators in North Dakota when she lived there and would be more than willing to go to St. Paul and talk with Bakk and Dill. Motschenbacher and several members of the audience said that they would write Bakk and Dill and ask them to support measures to correct Medicaid funding for care center facilities.
Another levy increase next
year?
When asked if the board would come back next year and ask for another levy on property owners if the revenues didn’t go up, Wraalstad replied, “If we don’t see an increase in revenues, then yes. If we see an increase in revenues, then no, we won’t ask the community for more money.”
Wraalstad said projections for next year indicate a decrease in reimbursements while the amount of people using the facilities remains about the same. “I hope I’m wrong about a decrease in reimbursements,” Wraalstad said.
Another man told the board to look at “real solutions,” and not “punt the problem down the road until next year.” He suggested the board tell the legislature what it wants and needs, and not have the legislature tell the board what the hospital and care center will receive.
“Fundamentally, in our constitution, people are supposed to tell the government what to do. Now it’s gotten out of whack and they tell us what to do. We need to take some real action here. I’m hearing rationalization, not solutions. We need solutions. My social security hasn’t gone up in two years. I can’t keep paying more and more. A lot of us can’t,” he said.
Undo unfunded mandates
He also suggested the hospital and care center staff not carry out unfunded mandates, especially ones that don’t apply to Cook County’s facilities. “Thecounty and the school are telling us the same thing. That they have to pay for unfunded mandates. What are you doing to reduce these mandates?” he asked.
“We have to follow the mandates or they [regulatory oversight] will pull our license,” Wraalstad answered.
Part of the problem for management and staff are the ever-changing rules and regulations. Don Strange, president and CEO of St. Luke’s hospital, said Medicaid and Medicare rules and regulations are now only found online because they are 110,000 and 130,000 pages long. “Thenew health care bill’s rulebook will go over 200,000 pages long when it is completed,” he said.
“The trouble with a lot of this stuff is that people who have never worked in a hospital, or on an ambulance or in an emergency room are making these rules up for us and we have to follow them,” said Wraalstad.
Motschenbacher asked if the board had looked at privatizing the care center, and noted the Chris Jensen Health & Rehabilitation Center in Duluth had undergone a successful transition from a public to a private operation.
“Here’s the story in the Duluth paper. I brought it along if you want to read it,” said Motschenbacher.
“I read that article. Did you see that the wages for the workers had fallen 40 percent?” asked Abrahamson.
“Yes, but people are still choosing to work there,” said Motschenbacher, who added that she has seen about a 35 percent reduction in her income over the last year.
“I will have to leave this community if I get a 40 percent pay cut,” said Kelly Swearingen, an employee at the hospital.
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