“Lord, save us from old age and broken health and a hope tree that has lost the faculty of putting out blossoms” – Mark Twain
Measure B, the Sonoma Valley Healthcare District’s five-year renewal of a $250-per year parcel tax, comes before voters next month.
And the question posed in the election this March 7 isn’t whether Sonoma Valley supports its hospital – it’s whether two-thirds of Sonoma Valley supports its hospital at an additional $55 per year. That’s what’s needed to pass Measure B, which would raise $3.85 million a year through 2022 for the budget-squeezed SVH.
This latest renewal of the hospital parcel tax first approved in 2002 is asking for 28 percent more per year than the $195 district residents have been paying since 2007, an uptick district officials say reflects the greater financial challenges community hospitals face today than they did a decade ago.
Chief among those challenges, the Measure B campaign points to, is the rising rate of hospital patients on Medicare and the falling rate of patients on commercial insurance. The percentage of claims for government reimbursement has risen from 70 to 73 percent since 2013, according to District officials – yet the government “has always reimbursed hospitals at a level that is below the cost of these services,” according to the Measure B campaign. It’s a problem faced by many community hospital districts, yet is exacerbated in a region like Sonoma Valley, whose demographic trends indicate an even higher increase in Medicare customers going forward – it’s an aging community, and the cost of healthcare continues to rise.
Sonoma Valley has a history of supporting the hospital parcel tax. The tax first passed in 2002 – that $130 per year for five years measure earned a whopping 84 percent of the vote. The next two renewals, in 2007 and 2012, bookending the bleakest years of the recession, both mustered more than 73 percent approval. When it comes to Sonoma Valley Hospital, district voters have thus far put their money where their open-up-and-say-ah mouth is.
And we think they should again in Measure B. With the ever-shifting health-care landscape, the parcel tax is the only way to ensure Sonoma Valley will retain its community hospital.
As in many local healthcare districts, the hospital operates at a loss. This is largely due to simple economics: while costs to operate the hospital have increased – wages, technology upgrades, the growing number of Medicare claims – new sources of revenue to counter those losses are increasingly hard to find.
To its credit, the district has had some success in narrowing the gap. Measure B proponents point out that the hospital’s operating margin, “although still negative, has improved in each of the last three years.” Those numbers have been helped by writing off the depreciation of district assets. According to healthcare district board member Bill Boerum, the depreciation is projected to stay the same in the next three years, while costs continue to rise. When all the numbers are crunched, according to Boerum – who, along with the rest of the district board members, supports the five-year renewal – the district is expected to be in the red slightly over $1 million per year in the next three years if the parcel tax doesn’t pass.
District board member Peter Hohorst acknowledges the challenges in keeping quality of care high, while staying economically competitive with other county hospitals. “The wages in this area are determined by Santa Rosa Memorial, Kaiser and Sutter,” he told the Index- Tribune last week, noting that the District tries to stay somewhere in the midpoint to ensure the consistency of staff needed to maintain a high-quality of care. Hohorst pointed out that last year the hospital received a four-star rating – out of a possible five – for quality and safety from the Center for Medicare and Medicaid Services.