A move to change how Kansas City distributes some of the $70 million raised annually through a city health levy has triggered alarm among safety-net clinics.
Leaders of Swope Health, Samuel U. Rodgers Health Center, KC CARE Health Center and Northland Health Care Access wrote members of the Kansas City Council last week urging them to stick with the status quo, which has long sent a portion of levy proceeds to their clinics.
The four safety-net clinics, along with Children’s Mercy Hospital and University Health, split about $34 million annually from the levy. University Health, the city’s primary safety-net hospital, receives the bulk of those funds, which are intended to offset the cost of health care for Kansas City residents who can’t pay.
In November, the city issued a Request for Supplier Qualifications that opened the door to other public health providers to compete for some of those funds. Submissions are due Jan. 12.
At the end of a year that has seen major federal funding cuts and promises of significant revenue disruptions from future Medicaid cuts, the safety-net clinics that currently receive funds said they can’t weather the loss of city revenue, too.
“We are already confronting unprecedented fiscal pressure,” the clinics’ letter said. “Looming Medicaid reimbursement cuts, coupled with the ongoing unwinding of pandemic-era coverage protections and workforce challenges, continue to create instability.”
The clinics’ letter called the city’s request for qualifications “ill-advised, inequitable and potentially unlawful.”
“We urge the Council to pause any movement toward an RFQ,” the letter said, “and instead convene a collaborative working group — including current levy recipients, the Health Department and community representatives — to review the city’s objectives and identify lawful, transparent and effective improvements to the program.”
City officials said they announced plans to review the levy distribution in an effort to ensure that tax dollars were being fairly allocated. It has been more than 35 years since levy distributions were “comprehensively revisited,” the city said. During that time, the city’s population and demographics have changed significantly.
“There are other providers serving the same folks, also depending on Medicaid and charity,” said Marvia Jones, director of the Kansas City Health Department.
Jones said she’s sympathetic to the pressures the four health clinics currently receiving health levy funds are facing. The city’s own public health department has lost federal funding and is also under considerable financial pressure as the city comes up against a budget shortfall. And that is true across Kansas City’s health care landscape, she said.
The funds in question are generated partially through a temporary extension of the health levy, which voters first adopted in 2005, around the time the Missouri legislature slashed Medicaid spending in the state, putting financial strain on the city’s safety-net providers.
The levy extension costs property owners up to 22 cents per $100 of assessed valuation, and supports ambulance services, emergency medical services, hospitals and public health providers. It was most recently renewed for nine years in 2022, when 75% of voters gave it the nod. The city also has a permanent health levy that doesn’t need voters’ regular approval. That levy also contributes some funds to the health clinics.
The controversy about which providers benefit from the health levy is not new. Previous city administrations have also called for changes to how levy funds are distributed. In 2013, the city health commission hired an accounting firm to audit the organizations receiving health levy funds. The city wanted to know how many people were being treated to ensure that funds were being fairly distributed.
But Jones said health levy revenue is still essentially just divided among the same providers each month. And the health department is hearing from other providers who are being passed over.
“They are saying, ‘We’ve been locked out of this process for 15, 20, 30 years,” Jones said. “It made sense to look at the process.”
But representatives of the health clinics that are currently getting health levy funds said they are the city’s main providers of primary care for poor and uninsured residents. They are already struggling to overcome significant revenue losses due to changes made under the Trump administration. And replacing any of the health levy revenue they count on would be next to impossible in that environment.
“The truth is that if we lose those dollars, in addition to the federal dollars that we anticipate losing next year,” said Jeron Ravin, president and CEO of Swope Health, “there’s just no question about it, we’re going to have to make some tough decisions.”
That may mean staff layoffs, Ravin said. Combined, the four clinics employ 1,000 people across the city. But it may also include reduced services.
Swope, which expects to see a reduction in Medicaid funds next year of between $5 million and $10 million, uses city health levy funds — almost $2 million annually — for treating the city’s poorest residents, many of whom are homeless.
“The question really becomes, where can we get those dollars?” Ravin said. “Any nonprofit, social service health care leader will tell you right now that money’s drying up in every potential corner of the country.”
Spreading city dollars, which are already limited, across more providers, and perhaps to some providers with less capacity to serve the city’s most vulnerable citizens, doesn’t make sense in this environment, Ravin said.
“It doesn’t take a public health expert to realize that that’s not going to end up in better health outcomes,” he said.
Bob Theis, Sam Rodgers’ CEO, said he hopes City Council members will support the status quo and leave the funding allocation as it is, at least until the next time voters consider whether to extend the temporary health levy.
“Those dollars are so important to us,” he said. “Let’s let the voters vote on who gets the funds.”
In the meantime, Sam Rodgers, Swope, KC CARE and Northland Health Access are taking their message to the public. The campaign began on Dec. 19.
