OREGON HOSPITALS

SPECIAL REPORT

THE IMPACTS OF PROPOSED HOSPITAL TAX

A report by the Oregon Association of Hospitals and Health Systems  



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 $620M provider tax on hospitals serving primary urban areas. 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.

JOBS AND ECONOMIC IMPACT

LOSSES IN JOBS, STATE AND LOCAL TAXES

An estimated 11,753 hospital jobs will be lost

HOSPITALS ARE THE 5th LARGEST SOURCE OF JOBS

State and local tax revenues will decrease by $55.3M

10% OF TOTAL CONTRIBUTIONS FROM THE SECTOR

Approximately 10% 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.

$71k
Median salary in hospital sector
Jobs Lost by Region (OR Tax $620M) 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-3) Share
9
729
1,449
2,170
2,890
3,611
REDUCTION IN ECONOMIC ACTIVITY GREATEST IN N. EAST OREGON

With total reduction in gross state product projected at more than $900 million, the loss in economic activity will be felt inside and outside the hospital sector

$960M
In Gross State Product reduced
Projected GSP Reduction by County (OR Tax) Share

IMPACT ON HEALTHCARE SERVICES

DISPROPORTIONATE IMPACTS ON THE NEEDY
8
Hospitals currently operating in the negative
18
Hospitals will operate at negative margins after tax
-8.9%
Average operating margin after tax

OPERATING IN THE RED MEANS REDUCTION IN CARE


As is, under the proposed tax, nearly two-thirds (18) of Oregon hospitals will operate with negative margins. This will severely impact the ability of these institutions to maintain current care standards as well as utterly eliminate the option to expand operations or improve care through new investments either in the physical plant or personnel.

Hospital Margins Before and After (OR Tax $620M) Share

Under the proposed provider tax hospitals will have to reduce $1.3bn in services

PENALIZING HOSPITALS SERVING THE NEEDY

The proposed tax will have the biggest impact on hospitals serving needier populations that simply cannot make as much money as other institutions. Mission-oriented hospitals would similarly suffer due to their inability to recover costs.

LOSSES IN SERVICES TO CHILDREN



From specialty care to family medicine, healthcare for children will be impacted.

IMPACTING MORTALITY, CHILD OBESITY, TRAUMA AND MORE.

LOSSES IN MATERNITY CARE



Expectant mothers will find more crowded birthing centers and fewer staff.

HEALTH OUTCOMES FOR PREGNANT WOMEN AND INFANTS WILL BE IMPACTED

LOSSES IN CARE FOR RETIREES



Retirees will see reductions in service levels for Medicare.

FEWER CAREGIVERS WILL MEAN LESS ACCESS AND LOWER QUALITY




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.