The Morrow County Hospital currently operates under Revised Code Chapter 339 as a county hospital. I am advocating for a change in in the designation of the hospital from a county hospital to a stand-alone “nonprofit” hospital. The hospital would move from a Chapter 339 hospital to a Chapter 140 hospital and an IRS 501(c)(3) status.
78% of the hospitals in the United States are 501 (c)(3) nonprofit hospitals, rather than for-profit or governmental hospitals.
County Economic Development Director Mr. Ware has noted that only a few county hospitals remain in the state of Ohio. Most of these have converted to this type of nonprofit hospital, as have nearly all area hospitals.
The requirement for Ohio Public Employee Retirement System (OPERS) funding causes the hospital to divert funds into the state employee retirement system, which would be better used to increase hourly wages. Increased hourly wages are the preference of younger workers and conversion to a nonprofit would allow us to give our employees up to a 15% increase in hourly wage. This would significantly improve our ability to compete in the marketplace for scarce healthcare workers by offering higher wages.
Concerns would, of course, be raised regarding those currently within the OPERS system. The law provides for a method that would allow vested retirement plan employees to remain in that retirement system if they choose. Other employees may decide that leaving the plan is the better choice. No one is forced in or out. The hospital would then set up a 403b plan, which functions like a 401k plan. This defined contribution plan would allow employees to manage their own retirement plan and the hospital could decide whether, and how much, to match employee contributions. This is the mechanism for most retirement plans today. It is also the retirement plan for most hospitals.
When the hospital converts, the current hospital levy would be discontinued and would be seen as a real benefit by the county voters.
If financially necessary for continued operation of the hospital, at some point in the future, the tax levy could be put back on the ballot. With the hospital currently holding $20 million in cash and $5 million in collectible bills for services already rendered, there has never been a better time, financially, for considering this alternative.
This nonprofit alternative would “get the county out of the hospital business” as advocated by Commissioner Whiston and Development Director Mr. Ware and would relieve the commissioners of any future responsibility of running the hospital. That responsibility would fall totally on the shoulders of the hospital board. That board could then decide, with appropriate professional advice, what the best alternative for the continued operation of the hospital would be. This plan would also remove the political turmoil surrounding future commissioner elections and allow more time for the commissioners and the economic development director to concentrate on non-hospital related matters for meeting the needs of our growing county
The option of converting from a county hospital to the more modern nonprofit hospital arrangement under IRS code 501(c)(3) should be given equal treatment in the current RFP (Request for Proposal) process.
This conversion option was recommended in the minority opinion of the Healthcare Advisory Board last year and was specifically advocated for by Committee Member Lois Stauffer, a long-serving registered nurse and healthcare administrator, and one of only two committee members with healthcare experience on that board.
When the RFP responses are evaluated, it would be my desire that an analysis of the 501(c)(3) option be simultaneously presented, with its benefits and risks, and given equal consideration with the other RFP alternatives.
Durell V. Trago, Jr., M.D.