Fairfield Hospital District (FHD) Board has been working diligently with the assistance of Community Hospital Corporation (CHC) to transition the medical center from ETMC to Freestone Medical Center. The official transition date scheduled for January 1, 2017.
Public hearings will be held on Thursday, August 25th and Tuesday, August 30th to discuss the need for a tax rate increase. The meetings will be held at the Fairfield Community Center beginning at 6:00 p.m.
Last year’s tax rate was set at .047129% per $100 of taxable value. The proposed rate is .10%. This is an 88% rise; yet still well under the average for tax rates throughout the state of Texas.
Please join Board Members in discussing this very important matter.
Message From the FHD Board
Fairfield Hospital District (FHD), created by the Texas Legislature and a local citizen election in 1987, had an original tax rate of 12 cents. In 1998, the facility was leased to ETMC under a 10-year lease. The lease was renewed in 2008.
In December 2014, ETMC announced that they would not renew the lease. The tax rate had declined to less than 5 cents at this point in time. During the ETMC lease, a modern, up-dated ER, new Rural Health Clinic, new hospital wing and major hospital renovations with a value of nearly $16,000,000 have taken place through ETMC. The lease provides that all resources and equipment shall remain as property of FHD. There will even be new equipment installed like this medical answering service to make sure the attention for patients is always great.
Economic Impact
Geographically, rural hospitals cover 85% of the state; and provide access to health care for rural citizens. The Affordable Care Act was not structured to support or benefit rural hospitals. For various reasons, twelve rural hospitals in Texas have closed over the last five years.
Rural health care accounts for 15-20% of all jobs for both primary and secondary employment. The presence of one physician accounts for 8.4 jobs in the local economy.
Health care services and quality schools are the most important factors for attracting new businesses, new residents and retirees to the area.
Local Impact
ETMC-Fairfield (soon to be Freestone Medical Center) is a valuable economic engine for the community.
In recent years, revenues of $13,393,383.69 have been earned by ETMC.
The medical complex is served by 76 employees with an annual payroll/benefits package of more than $6 million dollars that is added to the local economy. It is estimated that every health care dollar spent locally recycles through the community at a rate of 1.5 times.
The Emergency Department has an average of 700 clients per month (8,400 annually). The Rural Health Clinic averages 2,100 clients per month (25,200 per year). The average hospital population consistently averages 2.8 patients per day.
Financial Forecast
Community Hospital Corporation (CHC) has estimated that Freestone Medical Center will experience roughly a $2.5 million loss the first year of operation due primarily to start-up cost.  A second year loss of $500,000 dollars is estimated.
For the third year, CHC estimates that revenues should exceed operating expenses by $300,000 for a profitable year.
Search for Partnerships
Since December, 2014, the FHD Board has contacted several health care organizations about potential lease, management services and/or purchase. Recently the FHD entered into an Affiliation Agreement with Baylor Scott & White Health (BSW).
BSW’s role will be to provide specialists and services that are not locally available; and assisting with educational resources and management guidance.
The CEO of Hillcrest BSW will serve as an Ex Officio member of the FHD Board. The FHD Board is currently negotiating with CHC to provide long-term management services for the day to day operation of Freestone Medical Center.
Start-up Cost
In order for FMC to be a viable operation and to comply with Federal requirements, Freestone Medical Center must invest in a new Electronic Medical Record system (EMR). With recommendations from current staff; and after searching for the system most fitting the needs of FMC, the MedHost system was selected at a cost of $1.45 million dollars.
Despite the initial cost, the MedHost system will help FMC staff and physicians operate the facility accurately and economically. As with any time, an entity leaves, additional staff will also be added to fill various roles being vacated by ETMC-Tyler staff.
Where We Go From Here
All real property of the medical complex in Fairfield is fully owned by the Hospital District, is the permanent asset of the taxpayers of FHD and is debt free. No bonds or debt service exists on any asset of FHD.
Citizens are blessed to have up-graded/new facilities, high quality medical staff and economic support of a Hospital District.
A percentage of the current budget is dedicated to the legal responsibilities of the District for tax assessment, tax collections, and indigent care.
Another portion of the FHD budget is devoted to Intergovernmental Transfers (IGT), which allows the District to participate in receiving matching funds that can be utilized to off-set uncompensated care, a growing reality in today’s economy.
Recently, the IGT function has contributed roughly $1 million per year to the hospital/clinic operation cost. The third major and new portion of the FHD budget is to provide money to support hospital operations for start-up costs related to technology and staffing.
As required by law, the Board must equate the tax impact to the average taxable value of a residence homestead in the Fairfield Hospital District this year, which is $97,290.00.
The effective rate for 2016 would be $0.053247 per $100 of taxable value. The amount of taxes imposed on the average home by the effective rate would be $51.81.
The proposed tax rate of $0.10 per $100 of taxable value would cost the average homeowner in our District $97.29, or an increase of $45.48 per year. The increase would be $3.79 more per month or 12.4 cents per day.
More common example: For every $100,000 of taxable value, the cost of $0.10 proposed rate would be an additional $46.75 per year. The increase would be $3.90 more per month or 12.8 cents per day.