Dr. John McConnell was commissioned by the Oregon Health Fund Board to evaluate the impact of net income to Oregon’s hospitals if a 4 percent investment via provider taxes were adopted. Released in February, his findings displayed the following:

* Hospitals in Oregon would lose an estimated $60 million in net income if the current provider tax expires and a new revenue source is not found to fund coverage for low income Oregonians.

* All of the 32 small and rural hospitals would come out ahead under any provider tax scenario, with net benefits totaling almost $9 million a year;

* Of the 25 larger hospitals that would pay the tax, eight would get back more than they pay in taxes from increased revenue from new paying patients and reduced uncompensated care;

* The majority of the remaining hospitals would recover more than 70% of the taxes they pay from increased patient revenue

by Ariel Brantley-Dalglish

Health care advocates livened up the halls of the Anne Basker Auditorium in Grants Pass last Monday as they welcomed the House Health Care Committee in hosting their hearing hours south of its normal location in Salem. Members of Oregon Action gathered to sing their creatively retooled versions of such songs as John Lennon’s “Give Peace a Chance”. A rarity to have the committee meet in rural Southern Oregon, the event drew a crowd of over 75 people, the great majority of them there to testify in support of HB 2009 and to ask legislators to “give health a chance”.

Accessing health care has always been a challenge for rural communities like Grants Pass. However, as the statewide unemployment rate taunts the 10 percent mark, these communities are feeling even more of the strain. Last December, the unemployment rate in Josephine County clocked in at 11.7 % while in neighboring Douglas County, the rate was approaching 13%. In our current system, access to health care is most often dependent on employment.

Angelica Ruppe, finance director of a low income community health clinic in Jackson County, testifies that clinics in southern Oregon are seeing a sharp rise in the number of newly uninsured patients seeking services. Some of the clinics she reported are now seeing 90% uninsured patients. Ms. Ruppe expressed her strong support of expanding access through a provider tax. Without this investment, Medicaid revenue received by her network's six sites would be reduced by 20%, the equivalent of $100,000 or 2 full time providers. An additional 3,000 patients would be turned away annually, likely landing in the emergency room.

Other local health networks would benefit from an increased investment via the provider tax. According to a study released last month by Dr. John McConnell, Three Rivers Community Hospital in Grants Pass like nearly all rural hospitals, would benefit greatly from an investment in expanding access and an increase in the Medicare reimbursement rate to 88%. In the case of Three Rivers, with the federal matching dollars that the hospital investment would draw down, they could expect an increase of a little over 2 million dollars in net income to flow through their doors.

Roy Vinyard, President and CEO of Asante Health Systems, which Three Rivers is a part, also addressed the committee. Asante is one of the largest employers in Southern Oregon, home to a trauma referral hospital for 9 counties and the only provider of inpatient mental health services in the area. Mr. Vinyard sought assurance that any increased investment would prove sustainable for Asante's vital network. He ultimately supported the provider tax with the understanding that increased Medicaid reimbursement and reduced uncompensated care would balance any effect increased taxes might have on Asante’s bottom line.

Other supporters for HB 2009 testified in favor of guaranteeing the inclusion of a public plan option, expanding prevention and education programs, and reigning in costs to make health care more accessible to individuals and small businesses.

by Ariel Brantley-Dalglish

Last Friday, state economist Tom Potiowsky released a grim fiscal forecast for the 2009-11 biennium. Many options for cutting costs were explored as the Oregon legislature struggles to balance the state’s most unwieldy deficit since 2002. While painful cuts will likely be unavoidable, the legislature must also work to ensure that our tax dollars are used wisely.

The current crisis is particularly relevant in light of the fact that health care costs have been spiraling out of control for years. Premium costs alone rose 4.7 times faster than average family incomes from 2000 to 2007. A study conducted by Families USA found that in that period, Oregon premiums rose by 85.2 percent, while earnings rose by only 18 percent. With more Oregonians losing their jobs and wages stagnant, Oregon families and small businesses cannot continue to throw their money away into a wasteful system.

One of several proposed cost cutting mechanisms recommended by the Oregon health fund board and included in HB 2009 makes the insurance market place more transparent and accountable to consumers by lowering premium costs through the unified purchasing power of an “Insurance Exchange”. Separate from the “public employers health cooperative” which would allow state and local governments to use fortified purchasing power to save taxpayer dollars, the Health Insurance Exchange would give individuals and potentially small businesses the power to negotiate lower rates and better coverage.

A purchasing pool like this one would help small business owners like Becky Jarvis afford quality health care for her family and her employees. Right now, the computer service and repair business that Becky and her husband run out of their home in Aloha is too small of a company for them to qualify for group insurance. The premium costs for Becky and her husband to cover themselves and their son rose 46 % last year to a hefty $495 a month. Both she and her husband have $2500 deductibles, while their son’s plan has a $500 deductible. They are unable to afford the cost of health care for their one part time employee.

Without health reform, a recent OSPIRG study found that the average family insurance premium will more than double by 2016, to over $27,000 per year. Similarly, the Oregon health plan will be faced with unsustainable cost increases. In the face of such dire economic times, Oregonians are in no position to meet the exorbitant costs of rising insurance premiums. We must use our ingenuity and combined power to combat these costs and secure quality, affordable health care for us all.

In the last recession, we saw tens of thousands of Oregonians lose their health care coverage. With the number of uninsured already ballooning rapidly due to job loss and the unattainable cost of premiums, we must reverse course this time around. We have at hand a funding mechanism that ensures more Oregonians access to health care. The proposed provider tax would generate a steady stream of federal dollars used to insure more than 100,000 more Oregonians.

It is important to remember that the provider tax is not a new idea. Oregon’s 25 largest hospitals and Medicaid managed care organizations have been paying these taxes since 2004. The proposal of a new provider tax stems from the fact that the current tax, which currently funds the Oregon Health Plan is in peril. The state’s provider tax law expires October 1, 2009. At the same time, the federal government is ready to enforce new rules that will deny matching funds for provider taxes like the ones paid by Medicaid managed care organizations. If we do not renew and restructure our provider taxes, we stand to lose vital federal matching dollars that would guarantee coverage to Oregon’s children and low-income adults. In this economy, we cannot afford to leave our federal tax dollars back in Washington D.C.

Let's step back and look at what it would mean for our state if hospitals were asked to provide the dollars needed for Oregon to match the federal dollars available to cover low income Oregonians. Over $1 billion in new federal dollars would flow into our state and our economy and we could provide health coverage to 100,000 low income Oregonians. The majority of hospitals will experience net revenue increases after the new federal dollars are included, so that the bottom line costs to hospitals in the aggregate is estimated to be about $50 per person for each of those 100,000 Oregonians who would now have access to health care.

Oregon hospitals have the chance to boost the economy across the state, by creating new jobs and improving health through primary care and prevention. This is a heroic investment by Oregon's hospitals to boost Oregon's economy and health.