New Opp sales tax to help offset healthcare losses

Mizell Memorial Hospital CEO Jana Wyatt on Monday expressed her appreciation to the Opp City Council for passing a new sales tax that will help the hospital in a letter released Monday.

The council approved the sales tax ordinance on Thursday, after unanimously voting to suspend the rules to pass it on the same night it was introduced. Mayor Becky Bracke estimated the tax will generate $540,000 annually when it is implemented Aug. 1. She said the council has not yet determined how much of that will go to the hospital.

Wyatt said the hospital is dealing with many challenges, specifically:

• Approximately 10 percent of its patients are uninsured and have no ability to pay for care, which roughly $1.3 million annually.
• Approximately 75 percent of its patients are insured by Medicare or Medicaid, which provide low reimbursement rates in Alabama.
• The next largest provider is Blue Cross Blue Shield of Alabama. “Due to their limited competition in the state, there is little to no profit realized in caring for Blue Cross patients.”

Wyatt said the hospital also have challenges related to its fixed costs, including the staffing levels needed for specific services, and the need to have those services 24/7.

“None of the things mentioned above are new problems or challenges,” Wyatt said. “Reimbursement keeps tightening and costs keep going up. We have struggled with the same reality for years and have responded by closing programs such as OB that could not be sustained and opening new programs such as our Senior Behavioral Care Unit that has provided a positive contribution margin.”

Wyatt said the hospital is Opp’s largest employer, with 227 employees.

Wyatt also did not immediately answer questions about how much of the new tax will go to the hospital, nor how the hospital has dealt with deficits in the past.

Wyatt’s letter of thanks is available in its entirety here.

At present, Opp residents pay 9 percent tax on retail purchases – 4 percent for the state; 1 percent for the county; and 4 percent for the city. Beginning in August, the total sales tax percentage will be 10 percent.

Opp last increased its sales tax in 2007, when it added a 1 percent tax to fund the new elementary school.

Mizell Memorial Hospital is currently licensed for 99 beds with an operating capacity of 54 beds, according to its web site.