A 1.25-percent "franchise fee" proposed for Ohio hospitals by Gov. Ted Strickland will cost Columbiana County's two hospitals more than $1 million each in operating revenue over the next two years and could result in the loss of jobs at both institutions.
The hospital tax, or franchise fee based on the amount hospitals spend, is being proposed by Strickland as part of his 2010-2011 state budget plan currently being debated by legislators. According to the Ohio Hospital Association, the state's hospitals would pay $598 million, which would be partially offset by a 5 percent increase in the reimbursement rate for Medicaid patients, the first in four years.
Salem Community Hospital would lose $1.6 million over the next two years, and East Liverpool City Hospital estimated its net loss would be $1.1 million. The net loss to hospitals throughout the state would be $411 million. Officials at both hospitals say they already are looking for ways to make up the revenue loss, and both predicted job cuts would be necessary. The 199-bed Salem hospital with 1,067 workers is the county's largest employer, and ELCH, with the equivalent of 600 full-time jobs, is listed among the top 10 county employers.
With the county's unemployment rate topping 13 percent in February, we can ill afford to lose any more jobs. Especially since hospital employment typically pays more than the minimum wage jobs offered by fast food restaurants and department stores.
Hospital officials statewide also have predicted a reluctance to accept charity cases if the fee is imposed. The more free medical care the hospitals provide, the more they would have to pay the state. With the increased unemployment rate hospitals are seeing more patients who have lost their jobs and thus have no health insurance.
Does it make sense, with the jobless rate soaring, to impose a tax that would cost jobs and make it more difficult for poor people to receive medical attention? We think not.
The governor and legislators need to go back to the drawing board and find better ways to create revenue, rather than as one Ohio medical official said, resorting to "balancing the state budget on the backs of hospitals."