A handful of residents gathered in the Somervell County Citizen’s Center Tuesday, Jan. 20, to hear about the proposed hospital district and to ask Gary Marks Glen Rose Medical Center (GRMC) CEO, a few questions.
Like the automotive, financial, real estate, dairy and many other industries, the health care industry has experienced a steep decline in revenue.
“The only way hospitals can generate more revenue is to generate more volume,” Marks said, pointing out that rural hospitals struggle due to smaller populations.
In 2003, the hospital switched from a profit making organization to a non-profit foundation. GRMC continued to earn good returns until fiscal year 2008, which recorded a loss of over $800,000.
Marks said the loss of a physician and his physician assistant, plus the opening of Lake Granbury Medical Center ultimately cost GRMC $8 million.
Patient days, or the number of days a patient stayed in the hospital, began to drop in March 2008.
They also suffered a $1.3 million increase in bad debt, from $2.5 million to $3.8 million.
“Sixty-five percent of our business is Medicare/Medicaid,” Marks said.
The two federally funded programs only reimburse 30 percent toward billed expenses.
Approximately 97 million Americans either have no insurance at all or are underinsured. With that information in hand, Marks said GRMC could budget in an allowance of $2 million in bad debt - or charity services, but the $3.8 million bill exceeded their allowable limit.
Marks said the hospital has looked into financial subsidies to help increase revenue, but GRMC failed to qualify for nearly all of the programs. One reason being other hospitals are within 15 miles.
However, Marks said 55 percent of GRMC’s business comes from outside of the county, with three and half percent in indigent care from Hood County residents and nearly four percent in indigent care for Somervell County residents.
But, Marks said even with other hospitals nearby, Glen Rose needed to keep the hospital’s doors open.
Marks added GRMC boosts several benefits such as being “nurse friendly”; employing a helicopter base with a pilot, paramedic and nurse available 24 hours a day; and achieving Level Trauma 4 certification.
“We’re part of a regulated trauma center based out of Dallas,” Marks said.
GRMC also has a huge financial footprint in the community, pumping approximately $52.3 million a year into the local economy.
The hospital pays about $9 million a year in wages to 250 employees. Plus, there are a number of healthcare related businesses in town that co-exist with the hospital.
With basic information laid out, the discussion moved to what the creation of a hospital district meant to county residents, the expansion of GRMC and the upcoming election.
GRMC leases the land and the building used for the hospital and nursing home through the foundation from Somervell County. If county voters approve the formation of a hospital district, then the district would take over the lease.
A new district would mean a new tax.
“We’re really looking at seven cents; it could go up to eight cents,” Marks said.
The petition that was signed by more than 100 registered voters includes a tax rate cap at 10 cents. Marks said the actual rate would be set in August after the elected board members are put in place.
Once the rate is set, it cannot be raised by more than eight percent without a rollback election. By law, the rate can never exceed 75 cents per $100 in property value.
The county’s tax roll currently sits at approximately $3 billion in appraised property value, with 85 percent coming from Comanche Peak.
The county already levies a 3.5 cent tax to fund indigent care. The district would take over that tax, meaning property owners would most likely only see a 3.5 cent increase to equal the full seven cents.
If a home is worth $100,000, then the increase would total $35 a year.
Property owners may still be eligible to file for the Homestead Exemption under the district. Also, an over 65 years old tax exemption will be recommended as well as a tax freeze at the county limit of $50,000 for people over 65 years old.
Only residents living within Somervell County would pay the tax.
The hospital started expansion projects about two and a half years ago when they had a very different financial outlook, Marks said.
The hospital needed 17,000 square feet of new space to accommodate new services and increased patient traffic in radiology, the emergency room and the laboratory.
A clinic in Granbury was also added to the roster and talks over acquiring Meridian Manor in Bosque County have continued.
“We are staffing a clinic in Meridian to bring business into this county,” Marks said.
He added that the revenue generated “far exceeds” the cost associated with running a clinic outside of the county, adding they did not buy Meridian Manor.
One resident at the meeting questioned the difference between a corporate hospital and a non-profit organization, noting that the hospitals in Granbury, Cleburne, and Stephenville are members of for-profit systems.
Foundation Board Member Nancy Willis said the hospital used to be associated with Harris and the cost far outweighed the benefit.
“Harris was charging the county more than $100,000 a month,” Willis said. “If we lose control of our hospital, we’re going to pay for it.”
She also said a big corporation would mean the loss of available services.
A special election has been set for Saturday, Feb. 14 at the County Clerk’s office.
Early voting will run from Jan.28 through Feb.10.
If voters pass the petition and approve the creation of a district, five Foundation Board Members will be named to a temporary board. Permanent board members would be elected during the May general election.