The healthcare industry is being called upon to absorb the looming budget hole faced by Oregon lawmakers when they gather in Salem next month.
That comes on top of a proposed tax on hospitals that would generate $379.1 million and another tax on the state’s 16 coordinated care organizations and health insurers that’s expected to bring in $151 million. These projections were included in Governor Kate Brown’s budget last month.
But with a potential $882 million shortfall in the Medicaid budget, the Oregon Center for Public Policy is suggesting the Legislature go one step further and impose taxes on healthcare practitioners, according to Janet Bauer, policy analyst. The Center conducts in-depth research and analysis on budget, tax, and economic issues.
“Other providers are important players in the healthcare system and should be considered to contribute to solve the budget shortfall,” Bauer told The Lund Report. “The hospitals and other providers have benefited from the health reform expansion.”
Oregon wouldn’t be the first to impose such taxes, Bauer said.
Several other states have taken the lead and assessed taxes on practitioners (including physicians, nurses, dentists, psychologists and chiropractors), emergency ambulance services, ambulatory surgical centers and laboratory and X-ray services. Bauer pointed to a report from the Government Accounting Office that shows the share of program’s costs paid from provider taxes and the amounts in 2012.
She also suggested that the Legislature consider hiking the hospital assessment as long as it can be done within federal guidelines.
When asked for the hospitals’ position on the Medicaid shortfall, Andy Davidson, president and CEO of the Oregon Association of Hospitals and Health Systems, told The Lund Report.
“Hospitals have always been part of the solution in helping to solve our state’s Medicaid budget gaps, back to inception of the original hospital tax program in 2003, which was created in partnership with the late Sen. Alan Bates and his colleagues. More recently, we have been a part of a larger problem-solving coalition through the Oregon Health Leadership Council.
“Oregon’s hospitals have a long history of working collaboratively with our legislative leaders in Salem to seek fair and sustainable solutions that ensure access to care for as many Oregonians as possible. This coming biennium will be no different. There are no easy answers to these issues but hospitals will stick with our principles of collaboration and ensuring a common vision of a sustainable health care system for Oregon’s most vulnerable citizens.”
Net patient revenues have steadily increased since enactment of the Affordable Care Act, reaching 7.6 percent and 8.1 percent in 2014 and 2015, Bauer said. During the two years prior to the ACA, that revenue stood at 2 percent or less.
Meanwhile, charity care levels have dropped overall to their lowest percentage – roughly 1 percent – according to a financial analysis of hospitals statewide.
The Lund Report also analyzed more in-depth hospital financial reports recently released by the Oregon Health Authority.
The majority of hospitals in Oregon are non-profit and do not pay business income taxes or property taxes “even as their revenue has climbed and charity care has shrunk,” Bauer said. “Oregon hospitals have benefitted handsomely from federal health reform. Accordingly the Legislature should raise a significant portion of the Medicaid budget goal by increasing the state’s tax on hospitals.”
Bauer realizes that whatever taxes are raised to help offset the Medicaid budget, there won’t be enough money to solve the $1.7 billion budget next biennium. “Certainly, with the defeat of Ballot Measure 97, as many people are suggesting, the businesses and corporations should be part of solving this problem,” she said.
Diane can be reached at [email protected]
