El Paso hospital under financial duress, ponders tax increase

University Medical Center in El Paso, Texas projects financial strain heading into 2011 and may have to raise district taxes to remain flush, reports the El Paso Times.

Although the hospital ended fiscal 2010 with a $6 million surplus, it projects a deficit as high as $9 million for the 2011 fiscal year. Officials blame cuts in payments from state and federal payers.

On the state level, Texas is facing a budget deficit as high as $25 billion, and may cut its overall budget by 10 percent. That includes $205 million in cuts to hospitals that treat Medicaid patients. Meanwhile, the cost of treating uninsured patients at University Medical Center soared from $99 million in 2007 to $193 million this year.

"Inevitably the math doesn't work, and at some point in time, particularly if we get no relief from Washington or Austin, it's going to be on the shoulders of the El Paso County taxpayer," said Michael Nuñez, the hospital's interim financial officer.

Nuñez noted that the hospital will soon have to dig into its reserves to make up payment shortfalls. While it could continue operating for another year or two under such fiscal conditions, a tax increase from residents within its hospital district would become inevitable, he said.

For more:
- read the El Paso Times article
- read a Wall Street Journal article on the hospital's finances