Rural Health Care in Oklahoma Faces Bleak Future
By State Rep. David Perryman

OKLAHOMA CITY (25 April 2017) — Some people think rural health care is one of those things we don’t need until we really need it. However, the truth is that rural health care is not only essential for the individual and collective health of rural residents, it also is essential for all people who visit or travel through rural areas of our state, and one of the most overlooked benefits of a strong hospital and a strong medical community is the tremendous economic benefit it provides to non-metropolitan communities.

It goes without saying that a community without an adequate water supply, good streets or a well-equipped fire department stands scant chance of recruiting businesses that provide good jobs. The same can be said of a community that does not provide its citizens with access to health care at a level commensurate to the needs of the community.

Oklahoma’s rural hospitals are facing a bleak future. Nine rural hospitals have filed bankruptcy and three more have closed over the past six years. The crisis exists because they are required to treat uninsured people and as a result have millions of dollars of uncollectable receivables. Their plight is compounded by the fact that Medicaid reimbursement rates have been cut to the point that costs and overhead are barely covered by the amounts paid on behalf of Medicaid patients.

Because the State of Oklahoma has cut taxes like income taxes and the gross production tax on oil and gas companies, the state has no revenue to assist rural hospitals that are facing threats of an even greater decrease in reimbursement rates.

As a constant proponent of rural health care, including rural hospitals, I am alarmed at the direction the Legislature has taken in the neglect of rural hospitals and rural ambulance services
Because of the current revenue crisis, there is an attempt to increase the cigarette tax by $1.50 per pack. There is much rhetoric over the cigarette tax. Oklahoma hospitals are not in the shape they are in because cigarette taxes are not high enough. However, I am not opposed to increasing cigarette taxes so long as the tax increase is a part of a solution that will stop the annually recurring “crisis.” In fact, I would rather see a tobacco tax than a cigarette tax.

House Bill 1841 was filed before session and it appeared to go a long way toward taking care of the health care industry by creating a Health Care Revolving Fund that would perpetually use cigarette tax proceeds to leverage federal funds. Unfortunately, HB 1841 was amended before it was voted on in committee. The change provided that for the first year the funds were divided among a number of funds. The Health Care Authority Enhancement Fund got only 45% of the proceeds for the first year, and in subsequent years the proceeds went to an ambiguous fund that was not limited to leveraging federal funds and could have been appropriated by the Legislature for purposes other than the Health Care Authority.

In an attempt at bipartisan cooperation, House Democrats requested that the cigarette tax be included in a plan involving gross production tax and rolling back income tax cuts, which would provide an overall solution to Oklahoma’s budget problem. The plan is open for negotiation. Currently there are Democrats and Republicans who are willing to vote for a cigarette tax increase right now so long as an adequate amount of the tax would perpetually be earmarked for rural hospitals and health care and not dumped down a black hole that will continue to fund corporate welfare. I am a member of that group.

As of today, there is no pending cigarette tax bill on file. HB 1841 passed out of committee but the author did not seek a hearing on the floor and missed the deadline. I am anxiously waiting to see if a cigarette tax bill that may come out of the Appropriations and Budget Committee provides for dedicated proceeds to really help rural hospitals, or if it drops the money into a black hole after the first year.
Please write or call 405-557-7401 or [email protected]
(Representative Perryman is a Democrat from Chickasha.)