Norton (Kan.) County Hospital leaders are seeking a 1% county sales tax increase for the 25-bed critical access hospital and the Norton Medical Clinic in a recent letter addressed to the Norton Area Chamber of Commerce.
In the letter, obtained by Becker's, Kevin Faughnder, CEO of Norton County Hospital; Kellen Jacobs, the hospital's interim CEO; and ReChelle Horinek, the hospital's CFO, address the financial challenges plaguing healthcare systems, including NCH.
"The primary financial challenges facing NCH are lower insurance reimbursement rates, higher costs of goods and services, and inflation. The impact of a critical access hospital closing is devastating on the community," the letter said.
Calling the hospital, which has 130 employees, an "employment multiplier" and a "dollar multiplier," the letter detailed how while NCH's competitive employee wages bring jobs and money to Norton County's economy, the hospital itself continues to struggle financially.
Over the last three years, NCH's average operating margin was between -15% and -20%, with a typical operating margin for most Kansas critical access hospitals coming in at -11%, the letter said. In that same time frame, NCH's county tax support was between 1.1% and 1.4%, with other Kansas critical access hospitals seeing 6%.
"According to the American Hospital Association, hospitals need a small profit margin to keep pace with life-sustaining advances in medicine, help support our workforce, and take care of our patients and community. Approving our request for a one percent sales tax increase moves us closer to that goal and keeps the doors to our hospital open for business," the letter said.
Should the county chamber approve a sales tax increase, the letter noted NCH's administrative team and board would ensure focus on core operations to best support the community; vigorous pursuit of revenue opportunities from health plans and government payers; and responsible handling of the additional money from the sales tax increase.
"The success of our hospital is a vital component to the overall success of Norton County," the letter said.
Along with financial challenges, NCH has also experienced leadership changes in recent months. Mr. Faughnder, the hospital's existing CEO, joined after Brian Kirk, the hospital's former CEO, was released from his role after initially being put on administrative leave and then reinstated.