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State health care organizers urge passage of cigarette tax

Heide Brandes / Red Dirt Report
Chuck Spicer, CEO of OU Medical System, urging legislators to pass a $1.50 cigarette tax to help save health care in the state.
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Leaders say Oklahoma’s health care system is on ‘verge of collapse’

OKLAHOMA CITY – Oklahoma health care professionals and hospital leaders from across Oklahoma say if the proposed $1.50 per pack cigarette tax does not pass, then Oklahoma could potentially face a health care disaster.

During her State of the State address earlier this year, Oklahoma Gov. Mary Fallin asked lawmakers to raise the cigarette tax in an effort to raise the tax from $1.03 a pack to more than $2.50. Fallin said the tax would raise almost $258 million for health care.

House Bill 1841, which passed House Appropriations and Budget Committee in February, would also support various healthcare funds from Sept. 1, 2017 to June 30, 2018.

The bill was headed to the full House of Representatives for consideration, but no additional action has been taken.

On Tuesday, various representatives of health systems in Oklahoma met with legislators to encourage the passage of the bill, saying that the state would face even more hospital and skilled nursing center closures without it.

“The Oklahoma health care system is still on the verge of collapse,” said Craig Jones, president of the Oklahoma Hospital Association. “And the state’s budget remains in crisis, and the time for action is now. I and over 100 of my colleagues from hospitals across the state are here to ask legislators to pass the most viable revenue generating measure this session – the increase of the tobacco tax by $1.50 a pack dedicated to health care.”

Jones said 74 percent of Oklahomans surveyed supported a tax increase on cigarettes. He added that if the tax did not pass this year, the Oklahoma Health Care Authority – the state’s Medicaid agency – would face a possible 14.5 percent reduction in funding from the state.

“They tell us that eventually calculates to 24.6 percent in cuts to the reimbursement rates to health care providers under the Medicaid program,” Jones said.

“Such a cut of almost 25 percent means that over a dozen hospitals across the state would have to close, on top of the four that closed last year. Nine out of 10 nursing homes would have to shut their doors.”

Rick Wagner, director of medical professionals for Eide Bailly, said of Oklahoma’s 65 rural hospitals, 53 are operating at a loss, 37 have less than 14 days of cash on hand and seven operate payroll to payroll.

“If they miss one Medicaid payment, they can’t make payroll,” Wagner said.

Chuck Spicer, CEO of the OU Medical System, said closures of rural hospitals would jeopardize trauma care for the entire state. A lack of prenatal care in rural areas would mean more high-risk pregnancies, more babies in the neonatal intensive care unit (NICU) and more acute cases at OU Medical.

“When rural patients who could have been treated easily come to OU Medical, it means fewer beds available for Level 1 trauma cases and other complex conditions,” Spicer said. OU Medical offers the only Level 1 trauma service in the state.

Nico Gomez, CEO of the Oklahoma Association of Health Care Providers, said $93 million in state and federal funding cuts since 2010 have already forced more than one-quarter of nursing homes in the state to close.

“Over 10 years ago, we had 417 skilled nursing facilities in the state; today there are around 300,” Gomez said. “One reason they have closed is because Oklahoma has one of the lowest Medicaid rate in the nation for nursing facilities. That’s a huge problem when you consider that 70 percent of all residents at our skilled nursing facilities rely on Medicaid.”

More than 800,000 Oklahomans depend on Medicaid and roughly 75 percent of Oklahoma’s nursing home residents depend on Medicaid to provide shelter, medical care and more.

Most of Oklahoma’s nursing homes are already suffering financially, Gomez said, and cutting the rate of reimbursement by even 10 percent would force more than half of the remaining 300 nursing homes to close.

Even if the state does not issue a reimbursement rate cut, 30 percent of nursing homes still face closure, he said.

“If we see a 25 percent cut, we will not have skilled nursing facilities in Oklahoma,” he said.

In February, the Oklahoma Board of Equalization declared a revenue failure for the current fiscal year, which led to appropriations cuts to state agencies.

State agencies were told they would receive across the board cuts of 0.7 percent between March and June of this year, including $4.65 million to the Oklahoma Health Care Authority and $2.1 million the Department of Mental Health and Substance Abuse.

Earlier this month, Doerflinger told the Oklahoma Health Care Authority to prepare for a possible 15 percent reduction in state appropriations.

Centers providing services to Medicaid patients might not be fully reimbursed by the government if the cuts are approved.

Last year, after state agencies made drastic cuts to cover a $1.3 billion budget shortfall, state leaders said $140 million did not need to be cut, and the Oklahoma Health Care Authority got $23.5 million back to its agency while the Department of Mental Health received $8.4 million back after $22.7 million in cuts.

The speakers urged Oklahomans to sign up at and to call legislators.

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Heide Brandes

Heide Brandes is an award-winning journalist and editor with more than 18 years of experience....

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About Red Dirt Report

Red Dirt Report was launched July 4, 2007 as an independent news website covering all manner of news, culture, entertainment and lifestyle stories that affect and interest Oklahoma readers and readers outside of our state. Our mission is to educate, promote civic engagement and discourse on public policy, government and politics. Our experienced journalists provided balanced in-depth coverage of news stories that affect Oklahomans. Our opinion/editorial stories come from a wide range of political view points. We carry out our mission by reporting, writing, and posting news and information. read more

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