Officials with the Jefferson Hospital are concerned that it might not be able to make payroll in September if the county doesn’t get additional revenue it is seeking from a proposed new tax.
The Jefferson Hospital Authority is asking county commissioners to levy 3 mills to support the hospital’s operation. The new tax would bring in about $1.2 million.
In the Hospital Authority’s resolution to request the tax, Chairman Raymond E. Davis said the funds requested “are needed to stabilize the hospital’s finances.”
“As you know, nearly all rural hospitals are operating at or near deficit levels,” Davis said. “Federal and state payments for rural patients’ care have been reduced and appear to be continuing in that direction next year, too. Jefferson Hospital is undertaking new initiatives to attract additional revenue to this hospital to offset these declining payments.”
The authority severed ties Monday with the hospital’s management company, Pioneer Health Services, in a cost-cutting move to help bring revenues back toward the black.
The authority voted to send Pioneer a six-month notice to cancel the contract, but Davis said negotiations could result in the contract being cancelled or adjusted sooner. Jefferson Hospital officials said that as of last week they have already suspended the $30,000 monthly management payments.
Hospital Administrator Steve Widener told commissioners that Pioneer, which the hospital authority hired three years ago to manage operations and keep it in the black, filed for bankruptcy two months ago but has not been visible locally for some time.
“We will save $50,000 to $60,000 a month just breaking the contract,” Widener said. “We think we can break even by this time next year and not have to have any additional money.”
In addition to the $30,000 a month the hospital has been paying Pioneer in administrative costs, Pioneer has also been handling collections for the hospital and collecting 4.25 percent of what they collect.
Widener told commissioners that he believed that the tax money being requested would be temporary assistance and would not be needed after the current fiscal year.
“You’re talking to a health care system that is just totally broken in America,” he said. “There’s not a rural hospital I know of in Georgia that is making money. Over half of all the hospitals in Georgia are losing money. And our auditors tell us our losses are smaller than most hospitals and our debt, at a little over a $1 million, is not like $10 million like most small hospitals in Georgia. … We’ve run the hospital wisely, paying what needs to be paid, and not accumulating debt. We’re in better shape than most.”
The additional 3 mils on a $100,000 home would come to a $120 property tax increase, according to County Administrator Adam Mestres.
The county commission could address the tax at its meeting Tuesday.