POCAHONTAS, AR (KAIT) - Petitioning is underway to get a half cent sales tax on the November ballot in Randolph County. That money would go to Five Rivers Medical Center, a hospital that has had financial issues for at least the last 15 years.
"All across the board you're seeing more and more rural hospitals go for sales tax assistance," Five Rivers Medical Center CEO Luther Lewis told Region 8 News. "We've now reached that point."
Five Rivers Medical Center generates about $2 million a year in charity care and bad debt and it's not a new problem.
Over the past three years, Lewis explained that the hospital has cut expenses, salaries, programs and about 40 full time positions to make up for their shortfalls.
Though FRMC has seen an increase in outpatients, the inpatient census has declined over the past seven to eight years.
"We're very glad that people are wanting to come here and receive their outpatient services but it just does not generate much revenues as inpatients," Lewis explained.
The city has owned the hospital since 2007 and shortly after that, a one cent sales tax was passed to help fund it. 97% of voters approved that sales tax but Lewis said there are misconceptions of where that money goes.
"I think voters back then though the tax was devoted 100 percent to the hospital and it wasn't."
The hospital, road department and economic development all benefit, but Lewis said no group receives a set amount each year, leaving uncertainties for FRMC.
"In recent years, they've had needs for improvements on streets, needs of the money in the street department for economic development."
Lewis said that equates to less money for FRMC, only covering about half of their shortfall.
"We're just trying to take some of the uncertainty out of that and at the same time, this way the city will have some assurances that they won't have to be giving the hospital additional monies if we have a significant shortfall and they can count on a certain portion of that tax just for streets and economic development," Lewis said.
Now, the hospital board has approved seeking a half cent sales tax to solely benefit the hospital and get them back in the black.
"Just to ensure that we have a hospital and adequate medical care for this community," Lewis said.
Though the hospital normally acquires $2 million in bad debt, Lewis said they do anticipate their debt to go down this year due to medicaid expansion and the private option.
He explained if the tax passes and they still receive a portion of the money from the sales tax passed in '07, they should be able to get out of the red.
They need 235 signatures by the end of July. Lewis says they're aiming to collect 400. Hospital staff and board members have volunteered to collect signatures.