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5 February 2024
NORTON, Kan. (KSNW) — Like many smaller Kansas hospitals, Norton County Hospital is dealing with financial issues, and leaders think a countywide sales tax hike could help. It recently sent a letter to the Norton Area Chamber of Commerce asking the Chamber to support a one-cent tax hike.
The letter is from Norton County Hospital CEO Kevin Faughnder, Interim CEO Kellen Jacobs, and CFO ReChelle Horinek.
They say the hospital’s average operating margin in 2021, 2022, and 2023 ranged from minus 15 to minus 20%. They say the typical operating margin for many Kansas Critical Access Hospitals is minus 11%.
Norton County Hospital is dealing with lower insurance reimbursement rates, higher costs of goods and services, and inflation.
They say county tax support for NCH in 2021, 2022, and 2023 was 1.1 to 1.4%, while other Kansas Critical Access Hospitals averaged 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,” the letter said. “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 to the Chamber points out how NCH helps the community by producing outside jobs.
“For every one person we employ, we create 0.33 jobs in Norton County outside of the hospital,” the letter said. “We are also a dollar multiplier, meaning for every dollar that we pay out, more than 50% is spent in Norton County.”
The CEO, interim CEO, and CFO say the hospital pays competitive wages, and the employees live and spend that money in the community.
They say neighboring counties have issued tax increases to support their hospitals. They specifically mentioned Trego, Graham, and Sheridan.
“We evaluated other options and concluded that a sales tax resolution is a more equitable form of raising money without burdening land and property owners exclusively,” the letter said. “This method also allows us to get support from travelers as they pass through Norton County.”
The hospital leaders say they are focused on three financial tenants:
Focusing on core operations that best support the community
Vigorously pursuing all revenue opportunities with health plans and government payers
Being responsible stewards of the money
KSN News tried to contact the hospital and the Norton Area Chamber of Commerce. We have not heard back yet.