The board of Broadlawns Medical Center is poised to request a reduction in its property tax levy, and the institution is now working with a taxpayers' group to determine whether the annual levy could be further reduced.
Jody Jenner, CEO of Broadlawns, said he believes this is the first time in the county hospital's 90-year history that it has been able to budget for a reduction in the tax rate.
The move is significant for the hospital, which in the past dozen years has whittled its charity care cases down from 51 percent of its patients in 2004 to about 6 percent of patients currently.
For years, Broadlawns struggled to carry out its mission as a safety net hospital, nearly always using all of its property tax levy just to break even. The hospital has transitioned, however, to a full-service, state-of-the-art medical center with clinics and medical specialties that attract a broad range of paying and non-paying patients.
On Wednesday morning, Jenner and Gretchen Tegeler, president of the Taxpayers Association of Central Iowa, will participate in a panel discussion hosted by the association to discuss the extent to which the levy may be reduced.
"We think it's a significant point in time," said Tegeler, whose organization has been working with Broadlawns to develop the proposal, tentatively a 14 percent rate reduction. The current assessment per $1,000 of property value is $3.21; the board has approved a tentative reduction to $2.77 per $1,000 of property value, or about $5.5 million less than currently received.
"The question now is, I think, just a level of confidence, now that we have a different financial landscape and have government-funded coverage covering what was once a population dependent on property taxes," Tegeler said. "It appears now there is a real opportunity."
Jenner said: "Obviously there has been quite a turnaround at Broadlawns; it's been a commitment to excellence in everything we've done. What really stands out is cost containment. The average cost per patient day in 2004 was about $2,900. Today, it's about half that -- $1,450. If you adjust it by inflation, it's 40 percent higher than that. That's been a big part of that bottom line."
Attracting specialty physicians to Broadlawns in the past couple of years has created a dramatic increase in revenues for the hospital, Jenner said. "That really contributed to that bottom line and saw it accelerate."
Although the volume of safety net patients has remained about the same, the numbers of insured patients who were brought to Broadlawns with those private practices has made a significant difference, he said.
For the fiscal year that ended June 30, 2015, property taxpayers paid about $60 million to support Broadlawns. For the typical taxpayer, the Broadlawns assessment represents about 7 to 8 percent of the total property tax bill.
In the past decade, the tax receipts had largely gone toward paying the hospital's operating deficit, but in the past fiscal year, a majority of the tax receipts -- about $45 million -- represented a net surplus for the hospital.
Broadlawns has already accumulated a year's worth of cash, about $130 million, and has the support of the taxpayers association to reinvest about $60 million of that money into a variety of capital improvements, among them a new four-story clinic building, new east-side and Dallas Center clinics and new psychiatric residency facilities.
"So we're catching up on a lot of those needs right now," Jenner said. "And we're getting our cash position in a healthy position."
"Going forward, it's just a matter of deciding, what's appropriate here?" he said. "We tend to be very conservative here. It's like those early years were growing up in the Depression; you become very conservative."