Opposition to a nearly $1 billion bond proposal to build a new public hospital and modernize the county’s health system is beginning to take shape, with critics questioning why the county even needs a safety-net hospital.
The Maricopa Integrated Health System Board of Directors in May gave approval to put the $935 million proposal, Proposition 480, before voters Nov. 4.
The 30-year finance plan would pay for rebuilding the 42-year-old Maricopa Medical Center at 26th and Roosevelt streets, which would be smaller than the current building. The project would also upgrade and expand 11 neighborhood clinics, consolidate two mental health centers to expand capacity, increase services for seriously mentally ill residents, and build new specialty care clinics in the East Valley and Northwest Valley.
The first to publicly oppose the bond have been the Arizona Tax Research Association, or ATRA, and Goldwater Institute. Both question the necessity and timing of a safety-net hospital in the age of the federal Affordable Care Act and the amount of debt that taxpayers will have to shoulder for a relatively small Maricopa County Special Health Care District.
Groups like the Arizona Chamber of Commerce and Industry and the Greater Phoenix Chamber of Commerce, which historically oppose tax hikes, are deliberating whether to take a position.
Kevin McCarthy, ATRA president, said he expects to see opposition grow after the Aug. 26 primary election.
“At some point there will be a campaign put together to see if we can get our message out,” McCarthy said.
He said the timing of the proposal, which would run about $1.4 billion with interest, is questionable because of uncertainty and chaos surrounding the delivery of health care in the U.S. brought on by the Affordable Care Act, or Obamacare.
He said the hospital’s function has been to provide subsidized health care for the poor, but more Arizonans have access to health insurance than ever before.
New trends in health care
Steve Purves, CEO and president of Maricopa Integrated Health System, which operates the county health care system, including Maricopa Medical Center, said the business groups he has spoken with understand the proposal would create jobs and improve quality of life. For example, many of the 400 doctors a year who serve residencies at the hospitals stay in the state.
“When you’re a business and you’re trying to recruit talent into our state you care about quality of life issues,” Purves said. “The second thing I’m hearing is ‘Gosh, yes, you do have a 42-year-old building over there. From a fiscal responsibility standpoint your board could potentially, if this is not remedied, be throwing good money after bad.’”
Purves said a new hospital would have fewer beds because the trend in health care is toward outpatient and ambulatory care and away from acute care, which provides short-term treatment for a serious injury or illness.
Obsolete emergency room
Dr. Eric Katz, who is in charge of the hospital’s emergency room, where many of the Valley’s traumas are treated, said the emergency department is obsolete. For instance, he said the trauma bays are undersized and get cramped during emergencies when there can be as many as 12 on the trauma team. Other beds are separated by infection-carrying curtains instead of patients having individual rooms.
He said another problem with curtains is a sick child might be next to a person who is being resuscitated, or someone who is being belligerent.
“It’s a rough situation to be in,” Katz said. “We spend a lot of time trying to hold hands and make sure people understand, but you just can’t explain what is happening to a seven-year-old kid sometimes.”
And there are some needed technological upgrades, such as bedside ultrasound machines. Katz said Maricopa Medical Center teaches other hospitals how to use the devices, but those hospitals have better equipment.
McCarthy said he sees the district as trying to expand its business, which would cut into the market share of private hospitals that are prepared to meet the needs of an expanding market of insured patients.
“The private hospitals we’ve talked to have those concerns,” McCarthy said.
Purves said if the district was looking to expand its market share it would have planned for services such as cardiovascular and orthopedic care and located in lucrative areas like Scottsdale.
Instead, the proposal provides services private hospitals aren’t eager to get into.
“This project looks nothing like a competitive proposal. This is one that is based strictly on patient need; a teaching hospital that is obsolete, an ambulatory care network in those areas that are underserved, and expansion of care for the severely mentally ill,” Purves said.
Purves also said one of the misconceptions of Obamacare is that it will solve the problem of uncompensated care.
“One thing it will not do is solve poverty. There will always be vulnerable populations without health insurance,” Purves said.
Recovering from a recession
McCarthy said the second problem with timing is the proposal comes as the state struggles to recover from a prolonged, severe recession in which residential taxes were down $765 million from 2009 to 2013, causing the tax burden to shift to business, which saw a 30 percent increase in its tax rate in the same period.
McCarthy said it is striking that a special district would seek the third largest bond request in decades, one that rivals those of a big city and large community college district. Phoenix voters approved a $1 billion proposal in 1988 and Maricopa County Community College District got voter approval for $951 million in financing in 2004.
“The volume of the request is staggering,” McCarthy said.
The owner of a $200,000 home would be taxed about $26 a year.
McCarthy said that figures out over the life of the 30-year bond to be $865 in new taxes for the owner of a $200,000 home, and $7,800 for a small business with $1 million of taxable value.
Locating the details
Victor Riches, a spokesman for Goldwater Institute, said the group’s concern is the plan is short on specifics.
“They’ve given a sort of generic idea of where they want to spend the money, but to me when you’re talking about that kind of money, I think the voters ought to know exactly what they’re going to get for that billion six or so,” Riches said.
Chip Scutari, a spokesman for the Yes on 480 Campaign, said voters need only visit the campaign’s website to get details or the Secretary of State Publicity pamphlet.
Riches said that from the research Goldwater has done on the issue it appears that private hospitals could provide the services proposed by the bond.
“Maricopa is not experiencing a bed shortage and with Obamacare there is no question they could pick up those types of services,” Riches said.