THE IMPACTS OF PROPOSED HOSPITAL TAX

A report by the Oregon Association of Hospitals and Health Systems  |  May 2017



SUMMARY


A new tax being proposed on Oregon hospital revenues is intended to fill gaps in the State's Medicaid budget. This report is based on the current proposal of a 0.7% provider tax, along with elimination of the Hospital Transformation Performance Program (HTPP) and federally enacted Medicare and Medicaid cuts. The proposed tax will have a dramatic effect on the Oregon economy and hospital workers, as well as on healthcare for Oregonians. Given the nature of the care that hospitals provide, operating margins are traditionally thin compared to other industries, meaning there is little excess revenue that is not immediately used for vital needs. 

3 PARTS TO THE NEW PROPOSAL

TRUE HOSPITAL TAX

A true hospital provider tax of 0.7% means that there would be no repayment in the form of Medicaid payments. This eliminates $123M from hospitals providing care to Medicaid patients.

ELIMINATION OF HTPP

Elimination of the Hospital Transformation Performance Program (HTPP) would mean a cut of $176M in payments to hospitals and the end of a program that incentivizes patient safety.

MEDICARE & MEDICAID CUTS

The projected impact from federally enacted Medicare & Medicaid cuts totals $283M. This includes all legislative cuts, regulatory cuts, and quality program cuts which have already been enacted by Congress for 2018 & 2019.

JOBS AND ECONOMIC IMPACT

LOSSES IN JOBS, STATE AND LOCAL TAXES

An estimated 5,054 hospital jobs will be lost

HOSPITALS ARE THE 5th LARGEST SOURCE OF JOBS

State and local tax revenues will decrease by $23.8M

10% OF TOTAL CONTRIBUTIONS FROM THE SECTOR

Approximately 4.3% of hospital staff will be cut

RESULTING IN CUTS IN SERVICE AND CARE PROVIDED
LOSING LOCAL, LIVING-WAGE JOBS

Hospitals create local jobs that are especially critical in regions with weak local economies. 

The chart to the right shows the Portland Metro Area will lose the most jobs.

Job Losses by Region (OR Tax 0.7%, HTPP, MM) Share
JOB LOSSES ARE CONCENTRATED IN PORTLAND METRO REGION

The map at the right shows the jobs losses projected in each county of Oregon. Jobs lost in rural areas will be particularly damaging to local economies, where hospitals are a principal job creator. 


1 in 20
Jobs in Oregon are associated with hospital operations.
Jobs Lost by County (OR Tax-4) Share
4
313
623
933
1,243
1,553



SOURCES AND NOTES


Sources of data include the Bureau of Labor Statistics, the Bureau of Economic Analysis, and Apprise Health Insights. 
For more information on data sources click here.