June 12, 2017

We would like to thank the Mayor and City Council for passing the sales tax to help the hospital.  We know this was a tough decision and we appreciate the efforts that were made to get a grasp on the plight that all rural hospitals are facing.  Mayor Bracke talked with hospital administration several times since taking office and recently met with the entire hospital board to try and fully understand the challenges we are facing.  She also attended a rural legislative meeting hosted by the Alabama Hospital Association and the rural section of the Alabama legislature in April to try and get a better understanding of what all hospitals in the state are facing.

What are our challenges? First, about 10% of our patients are uninsured and have no ability to pay for their care.  This amounts to roughly $1.3 million per year of care we provide with no payment whatsoever.  Second, approximately 75% of our patients are insured by either Medicare or Medicaid.  Medicare payments to Alabama hospitals, especially rural hospitals, are the lowest in the nation. The Medicaid program in Alabama provides only bare bones coverage for its recipients and the reimbursement to hospitals only covers a portion of the cost. Third, the next largest payer for Mizell is Blue Cross Blue Shield of Alabama and due to their limited competition in the state, there is little to no profit realized in caring for Blue Cross patients.

The challenges listed above all have to do with reimbursement, but we also have several challenges related to costs. Many of our costs are fixed and difficult to adjust based on the number of patients we treat.  We have a minimum required staffing level to run each department.  Each department is staffed with licensed professionals such as RN’s, LPN’s, Lab Technicians, Respiratory Therapists, Physical Therapists, etc.  Departments such as Radiology have different modalities such as CT, XRay, MRI, Ultrasound and Mammography that each requires a different training  and license. Each separately skilled individual has to have at least one backup and most are required to have 24/7 availability. Speaking of 24/7 availability, our unreimbursed cost of providing a physician in the Emergency Room is $480,000 per year. Unreimbursed cost in this case means that our ER physician provider bills insurance companies and patients for their service and we pay the provider a stipend to make up for what they are unable to collect.

The costs listed above are all personnel related but there are several other areas with costs that are either fixed or difficult to control.  We pay approximately $655,000 in utility costs each year. We also have insurance, property taxes and licensing fees for almost every area we operate, totaling over $144,000 per year.  Each year, significant time and resources are expended to recruit new physicians to our area. Ironically, the insurances that do reimburse us based on our costs do not consider physician recruitment an allowable cost.

None of the things mentioned above are new problems or challenges.  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.  We have cut staff to the point that further cuts could jeopardize care.  Our employees have worked continuously and sacrificially for the hospital and its patients while raises have been minimal or non-existent. We have sacrificed updates to our plant to make sure we have adequate equipment and supplies to care for our patients.  And, for those who think differently, we do have more than adequate, and in some cases, newer and more up to date equipment than some of our neighboring hospitals.

A final point is that the City of Opp stepping up to help Mizell is what other cities and counties in Alabama have been doing for years.  Twenty nine counties in the state utilize a property tax millage to assist their hospitals. Southeast Alabama Medical Center in Dothan receives 2.5% millage from Houston County. The City of Troy passed a 1% sales tax many years ago when they were at risk of losing their hospital and the tax is still in place today. These are just a couple of examples, but many more exist, as almost half of all rural hospitals operate in the red. It should be kept in mind that between 2011 and 2014, 5 rural hospitals closed in Alabama. Two of those were within 25 miles of Opp. The citizens of Opp need to support our city and our hospital by shopping in Opp and utilizing our services when needed. They can also support us by making us aware of any issues and allowing us the opportunity to resolve them.

We are highly cognizant of the fact that Opp’s future, to a great degree, depends on the success of Mizell Memorial Hospital. With 227 employees, we are Opp’s largest employer. Further, potential businesses strongly consider the local school system and medical care facilities in making a decision to locate in a given area. We therefore pledge to be good stewards of the money we will receive from the city.

I know there is nothing  I can say that will convince all that this tax was the right thing to do.  But Mayor and Council, on behalf of myself, our Board of Directors and employees, I say thank you again.  Thank you not only for approving this tax, but thank you for challenging us to be accountable to you and to the citizens of Opp for this investment in us.

 

Sincerely,

Jana Wyatt, CEO