7A
THE DAILY ASTORIAN • FRIDAY, SEPTEMBER 2, 2016
Measure 97: Medical community divided on possible effects
Continued from Page 1A
Fausel, whose large specialty
practice serves the Portland
metro area, estimates he’d be hit
with a $4.2 million tax increase,
“just… because we are unfortu-
nate enough to be a ‘C’corp.”
Meanwhile, other for-profit
medical practices in the state,
with comparable services and
size, face no increase.
Differences in structure
The disparity is based solely
on the clinics’ corporate struc-
ture and how they pay their
taxes, choices that many clinics
made years before Measure 97
came on the horizon.
Women’s Healthcare Asso-
ciates is a limited liability com-
pany that elected to pay its
taxes as a C corporation. Under
Measure 97, the Portland-area
practice faces a corporate tax
increase of more than $1 mil-
lion, said CEO Brian Kelly.
In contrast, Hematology
and Oncology of Salem, a lim-
ited liability company that pays
taxes as a partnership, is not sub-
ject to the tax, even though the
practice generates nearly $40
million in sales each year.
Paying taxes as a partnership
allows profits flowing to the
partners to be taxed at their per-
sonal income tax rate, said part-
ner Dr. Bud Pierce.
Pierce, who is the GOP nom-
inee for governor, has come out
against the tax, even though
his cancer clinic, which would
not be affected by Measure
97, might gain a competitive
advantage.
Under Measure 97, about
30 out of 1,366 tax return filers
who are categorized as health
care or social services would see
their corporate taxes climb from
about $8 million per year to
$104 million per year, said Paul
Warner, director of the Legisla-
tive Revenue Office.
Consumers would pay
about half of the cost of the tax
increase in the form of higher
prices, according to Warner’s
estimates.
In total, the tax is projected
to cost an Oregon household
between $372 and $1,282 per
year in the form of higher prices
and fewer employment oppor-
tunities, according to a May
study by the Legislative Reve-
nue Office.
In support
Our Oregon, the advocacy
group backing the measure,
wants revenue from the tax to
be earmarked for health care, in
addition to education and senior
services.
Katherine Driessen, a
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S UNDAY E VENING
A
Sales not profits
Brad Wakefield, CEO of
Corvallis Clinic, said one of
the problems with the tax mea-
sure is that it taxes sales rather
than profits. Corvallis Clinic,
which operates in Corvallis and
Albany, also faces a significant
tax hike under the measure.
“I would say we are very
similar to a grocery store in that
our revenue tends to be really
high, but there is not a lot of
profit,” Wakefield said. “If we
have 1 percent left at the end of
the year after paying all of the
employees, we’re pretty happy.”
With such low profit mar-
gins, “the big question is where
would the money come from to
pay the tax?” Wakefield said.
Clinics would likely try to
negotiate increased reimburse-
ment rates with private insurers
to help offset the cost of the tax,
he said. Rates are typically set in
contracts that last a year or lon-
ger, so many clinics would have
to wait to try to recoup costs.
Another way clinics could
balance their books is to reduce
the number of Medicare and
Medicaid patients they serve
and replace them with patients
with private insurance, which
pay higher reimbursement rates,
Wakefield said.
About half of patients at
Oregon Clinic and at Corvallis
Clinic are on Medicare or Med-
icaid, according to those clinics’
executives.
A - Charter Astoria/ Seaside - L - Charter Long Beach
6:30
S ATURDAY E VENING
A
with lower incomes, could face
additional barriers to access-
ing quality care at a reasonable
price,” the association said in a
statement. “The cost of health-
care is already a great burden
on families. We believe Mea-
sure 97 would compound the
problem.”
LISTINGS
THE DAILY
ASTORIAN
A
spokeswoman for Our Oregon,
said large corporations, such as
Oregon Clinic, can afford to pay
more taxes.
“Without Measure 97,
affordable healthcare remains
out of reach for hundreds of
thousands of Oregonians,”
Driessen said. “With Mea-
sure 97, we will be able to pro-
vide quality, affordable care for
Oregonians.”
But some in the medical
community say it could have
just the opposite effect.
The Oregon Medical Asso-
ciation voted in mid-July to
oppose Measure 97 based on
“serious concerns about how
Measure 97, if passed, would
affect Oregon’s healthcare pro-
viders, and by extension, their
patients.”
“The regressive nature of
Measure 97 would mean that
our patients, especially those
6 PM
S EPTEMBER 4
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Hitler's G.I. Death Camp
24 Hours After Hiroshima
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(:15) Pacific Rim (2013, Action) Charlie Hunnam, Rinko Kikuchi, Idris Elba.
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