The Oklahoma Legislature should consider borrowing an idea from Georgia that The Peach State enacted three years ago in an effort to preserve rural hospitals
In 2016 the Georgia General Assembly passed a measure which allows individuals and businesses to make donations to that state’s financially stressed rural hospitals in exchange for tax credits. Two years later the General Assembly expanded the program by increasing the tax credits to 100% of the donations. Each year through 2021, $60 million will be available in tax credits for donations to rural hospitals. Medical facilities eligible for the tax credits are selected and prioritized by the Department of Community Health according to financial need, and each hospital can receive up to $4 million in donations per year.
Six hospitals in our state have closed since 2016 and eight others have declared bankruptcy in the past four years, Oklahoma Hospital Association records reflect. Although several of those bankrupt facilities are still in operation, it’s not much of a stretch to think they could go belly-up again, given the current economic environment. The federal government has designated nearly 80% of rural America as “medically underserved.” That area has 20% of the nation’s population but less than 10% of its doctors, “and that ratio is worsening each year because of what health experts refer to as ‘the gray wave’,” The Washington Post reported.
Dr. Kayse Shrum, president of the Oklahoma State University Center for Health Sciences, said that more than half of Oklahoma’s rural primary care physicians are older than 55 and one-quarter of them are more than 65 years of age. Roughly two-thirds of this state’s population lives in the Oklahoma City and Tulsa metropolitan areas. Yet the majority of Oklahoma’s land mass is rural, and more than a million of its citizens reside there.
The days of family practitioner Marcus Welby, M.D., are long gone. When was the last time you know of a doctor who made a house call? Furthermore, the big bucks in medicine today are made in heavily populated urban areas, not in sparsely populated rural areas. Financial incentives are often successful in shaping public behavior. For example, consider the number of renovation projects undertaken because of historic tax credits and tax increment financing districts. That was the logic behind House Bill 2511 introduced in the Oklahoma Legislature earlier this year by House Speaker Charles McCall.
HB 2511 would allow any doctor practicing medicine or osteopathic medicine in a rural area to claim an income-tax exemption of up to $25,000 per year for up to five years. To qualify for the incentive, a medical doctor or osteopathic physician would have to be licensed in Oklahoma, be a graduate of an Oklahoma medical school, and live in the same county as the rural area where the compensation qualifying for the exemption was earned. According to the federal Health Resources and Services Administration, access to a primary care doctor is inadequate in all but one of Oklahoma’s 77 counties. Only Kingfisher County and parts of Oklahoma, Canadian, Carter and Rogers counties were not identified as shortage areas.
Data obtained from the State Board of Medical Licensure and Supervision indicated Oklahoma has 6,118 licensed and practicing medical doctors; of those, 808 practice in a rural area that has a population of fewer than 25,000 residents. According to the State Board of Osteopathic Examiner, approximately 2,458 licensed osteopathic physicians are practicing in Oklahoma; of that number, almost 690 practice in a qualifying rural area.
The health care industry is the largest employment sector in Oklahoma; it’s bigger than the Defense Department’s five military installations. Oklahoma hospitals, medical clinics, home health agencies, physicians’ groups, pharmacies, state veterans’ centers, nursing homes, and residential care facilities, ambulatory health care services, and state health care, mental health, developmental disabilities, and rehabilitation agencies, employ more than 184,000 Oklahomans.
HB 2511 breezed through the state House of Representatives but stalled in the Senate Appropriation Committee. The measure stipulates that the exemption would expire if the “cumulative total of taxes forgone due to” the incentive surpassed $1 million.
Meanwhile, Georgia has devised a road map of a financial model that potentially could keep many rural hospitals open and solvent. If Oklahoma’s leaders are truly committed to improving public health in this state, surely in an $8.3 billion state budget we could afford a tax concession of several million bucks for the largest employment sector in Oklahoma.