Recently, the city of Watonga announced its intent to ask for a one percent sales tax to fund a water treatment plant and sewer plant.
That proposition, should it pass, would take effect July 1. Two other one percent taxes, used to support Mercy Hospital, are set to expire that same day, July 1. However, Mercy has announced it will ask for those two taxes to be renewed.
Mercy began operating the hospital in 2012 and since that time, according to its own numbers, the corporation has invested more than $4 million into the facility but has only recouped $1 million to the endeavor.
Residents have wondered what would happen to the hospital if the taxes aren’t renewed.
In its Nov. 29 statement, Mercy spokesperson Meredith Huggins wrote, “ Losing the tax incentive would be detrimental and financially unfeasible for Mercy to continue to operate a 25-bed hospital that requires around the clock staffing in Watonga. Mercy is asking Watonga taxpayers to re-approve the two, one cent sales tax incentives on the ballot next year so Mercy can continue to provide high-quality, low-cost health care to the Watonga community. During the past 10 years, Mercy has had no rate increases. Re-approving the sales tax incentive will only maintain the same rate that has been in place for a decade.
“The cost of health care continues to rise as inflation has increased around 9% across the nation in the last year alone. According to publicly available data, Mercy consistently delivers some of the highest-quality care to patients across Oklahoma at the lowest cost and we want to be able to continue doing that for the Watonga community,” Huggins concluded.
Figures from the American Hospital Directory shows that although the Mercy group in its entirety had a 2021 revenue – not profit - of $5.5 billion, the Watonga facility only had a 2021 net income of $921,708. By contrast, both Okeene’s and Fairview’s hospitals, similar in size to Watonga, operated in the red in 2021. Okeene has had an ear- an earmark in place for its hospital for years, said Rep. Mike Dobrinski. Dobrinksi is from Okeene and represents District 59. That hospital is an outreach of St. Anthony’s.
The indigent care rate for Mercy Watonga was $448,000 for 2022 thus far. There were also $501,000 in unreimbursed Medicaid treatments.
When a treatment is performed, no matter the amount charged, there are limits placed on reimbursement from Medicaid. For example, a breathing treatment for an asthma patient might be billed at $500 but Medicaid only allows payment of $300. That means the difference is left unpaid, whether the costs to the medical facility are covered. Many residents and officials feel a hospital is necessary to the growth of the town, or even to just maintain the population as it is.
Maintaining the hospital, said Dobrinksi, is of utmost importance to a town.
“It is essential for the wellbeing of a community,” he said. If the hospital requires the financial backing of the town to keep the doors open, he said, “I would think the community would be supportive of that.