FREQUENTLY ASKED QUESTIONS

Q: Who owns the hospital?

No one, and everyone. CMH is a 501(c)3 private non-profit organization. When the hospital was established in 1958, former editor of the Marysville Advocate Byron Guise stated it best when he said, "No doubt there will be trying times, but if every person remains loyal to our hospital, it will serve as one of the greatest needs this community ever has had and always will need. Let us resolve now to ever work for the best interests of the hospital, because it belongs to everyone."

Q: What does that mean?

A non-profit's ultimate goal is to break even each year, and to provide a needed service to a community. As a private organization, CMH is governed by an elected board of directors who represent different segments of the local community.

Q: Tell me more about the Board of Directors:

Corporate members (see below) nominate 12 board members from four quadrants of the area who each serve a 3-year term. Board members receive no compensation, and must attend intensive training on healthcare policies and finances. Additionally, the medical chief of staff sits as the 13th board member. Board meetings are moderated by the chief executive officer, with other chief executives present (director of nursing, director of quality, and chief financial officer). Board members often have a background either in finance, nursing, business, or the medical field.

Q: What is a corporate member, and how do I become one?

Corporate members were established during the original capital fundraising campaign in the 1950s. Any donor who contributed $100 or more (a large sum in the 1950s, as the whole hospital was constructed for about $300,000) earned a lifetime membership, allowing them to vote on board members and bylaw changes. It continues in this manner to this day - any person is welcome to become a lifetime corporate member with a $100 "membership fee" (donation). Corporate members are invited to the annual corporate meeting in April, where board member elections and needed bylaw changes can be voted on, and an annual financial report is given by our auditors from BKD in Kansas City. You do not have to be a corporate member to be a board member, although many board members who have not been a corporate member often become one after being nominated to the board. There are currently about 250 living lifetime corporate members. To become a corporate member, please email pkharrison@cmhcare.com, or call 785-562-2311.

Q: Why a county-wide sales tax?

CMH is tasked with providing care to the Marshall County and surrounding areas. While we recognize some people who live in communities on the edge of the county may seek care from other providers, we do provide care daily to the entire county and also to a number of people from surrounding communities who work or do business in Marshall County.
The Board of Directors feels that an additional tax on Marshall County property owners would not be a fair tax, and that a small tax on retail purchases made within the county is a more equitable way to spread the tax burden and lessen the impact on a single person. The decision to pursue a county-wide retailer sales tax is pursuant to Kansas Statute 12-187 (5) where state law indicates a healthcare provider may request county commissioners to allow a public vote for collection of sales tax for health care services.

Q: How much sales tax will be collected?

The sales tax generated between $1.1 million and $1.2 million annually since it first went into effect April 1, 2020. The tax would sunset, or cease, after 2029, unless voted on again by the public.

Q: If the sales tax passes again, what is this going to cost me?

Nothing more than what you're currently paying in tax at a Marshall County business! The sales tax level would stay the same.

A half-percent tax amounts to $0.50 on every $100 spent at any business in the county; if you spend $800 on average each month on local purchases, it would be a total of $4 per month.

Q: What will the money be used for? Are there any capital improvements planned?

Funds raised through the sales tax will go towards "the delivery of healthcare services provided by CMH". To keep up with medical advancements, it's critical to stay current in treatments, equipment, technology, and training, plus the regular cost of operations. No additional building capital improvement projects are planned at this time. Additionally, we are not seeking to add any particular service line at this time, but we do hope in the future we can continue to meet additional healthcare needs. The Board of Directors is always seeking to provide the kind of care needed in our community, if it can be achieved to our standards of care at a reasonable cost.
Asking for sales tax support is simply to help sustain the delivery of excellent healthcare in Marshall County, instead of trending downward long-term, like many other rural hospitals have without receiving public support.

Q: I heard that CMH wasn't willing to share its books or financial information. Is that true or false?

False. CMH has published annual reports including financial statistics, patient statistics, board information, Foundation information, and community benefit information on our website under "Annual Reports" for the past ten years. Annual reports are available from 2014.

Our auditors (FORVIS, Kansas City) also give an annual financial report in person at the corporate meeting each April (see above).

Lastly, as a 501(c)3 non-profit, we are required by law to file a Form 990 with the Internal Revenue Service that is public record. It is to the best interest of CMH to be as transparent as possible.

Q: Wait, why does CMH need our tax money vs. any other private business?

Because CMH is a critical access (25-bed, rural hospital), a non-profit organization, and a participant in the Medicare and Medicaid programs, we must abide by certain mandates. This includes not turning away any patient in need of care regardless of ability to pay, and meeting certain national guidelines for equipment and certifications. In addition to these mandates, we are also subject to receiving payment for our services from insurance companies, and the state and federal government. When government programs are cut, or insurance companies change their reimbursement schedules or group plans, that directly impacts the hospital at a local level, however unintended. This leaves local funding as a last resort to bolster what is lacking from a state and federal level. Using local funding allows us to keep local control of the services and quality we have come to expect.

Q: Can't you just make some cuts? Get rid of XYZ?

The CMH board of directors has spent considerable time and effort analyzing our operation to better understand how we compare to like-size hospitals. A regional accounting firm reported CMH was in the top 25 percentile when comparing personnel expenses and volumes. Additionally, when CMH was compared to other members of the Heartland Health Alliance, a group of 50-plus rural hospitals in our region, CMH had the lowest direct cost per inpatient case. Community Memorial Healthcare has also been nationally recognized as one of the "Top 100 Critical Access Hospitals" for fiscal years 2016, 2017 and 2018, which is awarded based on efficiency and quality of services. Only a few Kansas hospitals have received this recognition.

Serving Medicare beneficiaries comprises more than 55% of CMH's total revenue. Due to the federal sequester (see below), we now receive only 99% of our allowable costs, meaning no matter how much we consolidate, no matter how much we reduce our expenses, personnel and/or services, we still are paid less than our actual costs to provide care to those patients. Any cuts we make, Medicare simply says, "thank you very much, here's that much less repayment." So there is essentially no way to make any cuts (which in healthcare, a cut = cut jobs) impact the bottom line.

Q: Does CMH really need fancy specialist doctors?

CMH offers our patients 16 specialty clinics, with 37 physicians to best serve our patients. While some of the physicians in our Outpatient Clinic offer procedures locally that we incur costs from (and therefore, income), the majority of our outpatient physician groups simply rent space from our facility to provide a more convenient location to see their local patients. This costs us nothing, allows us to offer better service to our patients, and provides a revenue stream through use of our clinic spaces.

Q: What is the federal sequester?

In 2012, the US congress could not agree on an increase to the federal debt ceiling. As a result, the fallback decision was to cut all federal program budgets by 2% - this is called a "sequester." While most of us would think 2% is not that big of a deal, when one takes into consideration that rural critical access hospitals, such as CMH, are paid on a cost-basis from Medicare, it becomes apparent this was an unintended consequence of the sequester. Previously, Medicare providers were paid 101% of their cost (or a 1% profit margin - what private business would choose to operate on that margin?), but since 2013, we now receive only 99% of the cost of each service provided to Medicare patients.

Q: If you're receiving tax dollars, will the name or ownership of the hospital be changed? Will salaries for all employees and line-item expenses be published? Where is the public oversight of our tax dollars?

No, the name or ownership will not change, as this is a sales tax, not a property tax. CMH will remain an independent entity. Sales tax funding does not indicate a need for county-run public oversight (see KS Statute 12-187(5)). However, the Board of Directors is elected from the local public to provide this oversight, and serve in a volunteer capacity as a liaison to their community (see above for more information about the role of the Board of Directors). For additional public oversight, annual reports are published each year, news releases are constantly sent to area press about improvements, health programs, and more, and our IRS tax forms are public record, as always.

Q: Is this a temporary or long-term solution?

This is a temporary solution, in hopes that the federal and state governments will make changes that positively affect rural healthcare in the next five years. If those changes are not made, it would be up to the public whether or not continue to support CMH in this manner again. If the sales tax question passes in 2024, this will be the first renewal, or second period of five years since voted on at the end of 2019.

Q: What happens if the sales tax does not pass?

CMH's governing board has seen alarming trends in rural healthcare. Since 2010, 113 rural hospitals have closed in our nation, with five of those hospitals in Kansas. Currently, there are 15 Kansas rural hospitals identified at high risk for closure. While CMH is not in extreme financial distress today, we are certainly not immune from the trends. Asking for this sales tax now prudently allows us to plan for and protect the future. If the sales tax does not pass, depending on the outcome, the board may consider asking the community for their support again sometime in the future, or start considering what service lines we should no longer offer locally.