Tax credits offer hope for rural hospital turnaround
Published 4:15 pm Friday, December 2, 2016
From Staff Reports
Georgia’s rural healthcare system is in crisis. This is not just a rural problem or a medical problem; it is a problem for all Georgians.
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Emanuel Medical Center closed its labor and delivery unit a year ago as it was no longer financially viable. Now, pregnant women in Swainsboro have to drive to the next closest hospital – Meadows Regional Medical Center in Vidalia. If it is a normal birth, that drive may not be a cause of alarm unless you are an anxious parent. If it’s a high risk pregnancy, this long trip down country roads becomes truly life threatening for both baby and mother. The financial peril of rural hospitals in Georgia is forcing administrators to make tough decisions on which services they can continue to offer their patients, sometimes triggering these life threatening scenarios.
As many hospitals are forced to make cuts, others face a worse prognosis. Rural hospitals can’t compete for doctors who are drawn to the larger salaries of our metro areas. These hospitals likewise often rely on older equipment and lack the funds to upgrade. Most rural hospitals have no resources to purchase advanced analytic technology that could help provide the most efficient medical care to the neediest patients. Making matters worse, federal guidelines recently required hospitals to adopt electronic recordkeeping systems at a cost of $1 million or more. The end result of all these factors – five rural hospitals have closed since 2013 and nearly 50 of Georgia’s 184 hospitals are currently in financial distress. Here in Decatur County, Memorial Hospital of Bainbridge is at risk, as has been discussed in these pages.
A reduction in the access to quality healthcare can create a vicious cycle jeopardizing the overall financial status of a county. Rural hospitals are one of the county’s largest employers. If that hospital closes, the county’s unemployment rate surges. Recruiting new industry becomes nearly impossible when prospective job creators realize there is no healthcare facility in the area. No access to healthcare, no new businesses. The downward cycle begins.
In 2016, the Georgia General Assembly passed Senate Bill 258 to provide $180 million in tax credits over three years for individuals and corporations that donate to the most vulnerable rural hospitals in Georgia. We are hopeful that this influx of funds will help stabilize these needed institutions as we work towards long-term solutions.
The Rural Healthcare Tax Credit, which begins in January 2017, allows individuals and corporations to donate to hospitals deemed Georgia’s most vulnerable by the Department of Community Health. Total donations allowed under the tax credit in 2017 are $50 million. In 2018, that jumps to $60 million in tax credits. In 2019, $70 million in tax credits will be available. Every person or company that donates can see up to 70 percent of that money returned as a tax credit.
The most attractive part of this program is the reliance on individuals and corporations. This is an opportunity for private citizens to invest in vital institutions that provide critical access to healthcare in their region. Ultimately this will determine the overall health of their communities and local economies.
To push the new tax credit program, Lt. Gov. Casey Cagle has partnered with industry leaders across the state to form a new task force called “Rural Healthcare 180.” I am joining with him and my fellow legislators to help this public/private partnership promote the tax credits through aggressive marketing plans. Next, the task force will create a think tank to develop “best practices” and offer hospitals the help they need to ensure success. Finally, Rural Healthcare 180 will be tasked with the development and recommendations of long-term, sustainable financial models to assist rural hospitals in providing rural Georgians with quality sustainable healthcare.
Please consider offering financial support to Georgia’s rural hospitals, or ask your employer to contribute. While the tax credit itself is enticing, I know Georgians are always willing to help when we see a critical need in our communities. The outpouring of support for those in danger during our recent Hurricane Matthew is just one example of big hearted Georgians who respond to those in need.