Why does WMC collect taxes when patients pay for services?

Released: 03/28/18

By Lynn Luloff, Chief Financial Officer

From the federal to the local level, taxes are a very real part of our world. Typically, taxes support the infrastructure people enjoy, but do not pay for each time they use it, like driving on roadways, crossing bridges, or calling law enforcement for assistance; or social expenses like public education, Medicaid support and others.

Iowa Code Chapter 347.7 allows for county or municipal hospitals to levy taxes to help cover unreimbursed expenses. As a county-owned not-for-profit health care facility, Winneshiek Medical Center is legally able to set a tax levy and collect property taxes from the citizens of Winneshiek County. Each year, the elected Winneshiek Medical Center Board of Trustees decides on a rate, or levy, of property tax dollars to go to the hospital. Winneshiek Medical Center has not had an increase in tax levy rate since 1992, with the actual levy rate having declined from 0.80490 in 1993, to 0.58323 in 2003, to 0.44136 per $1,000 valuation currently.  Property values go up and down, which impacts the actual dollars that come to the medical center, but the rate has been the same for many, many years.

This year, Winneshiek Medical Center collected $552,129 in tax support at the above mentioned levy rate. Only three hospitals in the state collected less than us; however, 38 hospitals collected more.* WMC continues to balance current resources in an uncertain health care environment, and monitor resources with known current and future needs. Although an increase in the taxation rate may be required in future years, WMC works hard to be good stewards of all dollars that support local health care.

So why do local hospitals collect tax money when patients are charged for services? The answer is fairly simple: WMC loses money on certain services important to our community, and tax support helps pay for them. A prime example is WMC’s ambulance service. In an emergency situation, skilled, experienced paramedics arrive in a fully equipped ambulance to provide life-saving care. However, the expense of purchasing, equipping and maintaining three ambulances, plus wages and benefits for 24/7 paramedic staff, are not covered by the payments we receive for their services.

The dollars received through our tax levy are applied to that shortfall so Winneshiek Medical Center can continue to provide this necessary and life-saving service to our community.


*Iowa Department of Management – County Hospital Property Tax Rates FY2018


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