Aspen Valley Hospital leans on voters for mill levy renewal
The Aspen Times
Hospital mill levy question at a glance
Here’s the official ballot language for issue 5A regarding the Aspen Valley Hospital mill levy.
Without raising additional taxes, shall Aspen Valley Hospital District’s existing property tax levy authorization of up to 1.5 mills be extended from its current expiration of December 31, 2015 through December 31, 2020?
Numerous changes at Aspen Valley Hospital are forthcoming in 2016, from the implementation of its new medical-records network to the continued construction at the facility.
And in December, the quasi-public, nonprofit hospital’s board of directors will review next year’s budget projecting $104 million in gross billings.
The hospital also is asking voters in its district — which includes all of Pitkin County except for Redstone — to renew a mill levy that’s been in place since 1995. Voters have extended the mill levy every five years since then.
The 1.5 mill levy means a property owner pays $11.93 annually on a property with an assessed value of $100,000, and so on.
The tax wouldn’t go toward the 25-bed hospital’s construction, which is being funded through private donations and the institution’s cash reserve. But it still is important to its bottom line, said hospital CEO Dan Bonk and Chief Financial Officer Terry Collins.
The mill levy supports hospital services, salaries and benefits, maintenance and utilities, continuing education and indigent care.
“The mill levy is about $3.9 million a year, and in order for us to generate that much cash, we would have to generate another $50 million in gross revenue in billings,” Collins said. “It’s a very significant source of cash for us, and there’s no way — this is just a fact— that we could ever generate that in additional billings.”
That’s because revenue from the mill levy, as opposed to billing revenue, is essentially free cash. Billing revenue also includes bad debt and contractual adjustments with insurance companies, Medicare and Medicaid.
“It goes right to the bottom line with no expenses, no bad debts,” Collins said.
Bonk said the mill levy also helps the medical facility remain an independent community hospital. The hospital has forged alliances with such hospital organizations as St. Anthony’s, Swedish and now UCHealth with its Epic System Corp. medical-records system.
UCHealth is allowing the Aspen hospital to basically piggyback on its Epic system, to a cost of $5 million to $6 million. Bonk said the hospital also is eyeing ways to bring in some UCHealth specialists, whose expertise could be in hematology or rheumatology, for instance, on an as-needed basis.
But “the answer is ‘no’” when it comes to possible future plans of the hospital being run by UCHealth, Bonk said.
Through August of this year, the hospital recorded a total operating revenue of $56.7 million, $54.9 million of which came from net patient revenue, according to hospital records. The total operating revenue is nearly $4 million more than the hospital budgeted through the first eight months of the year.