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Economic development incentive to be canceled

The City of Wichita will consider canceling an economic development incentive for a firm that no longer meets policy requirements.

Two years ago the Wichita City Council granted an economic development incentive for a freestanding emergency department in northeast Wichita. The incentive was in the form of property tax relief. The firm would be exempt from paying 88 percent of its property taxes for five years, with the possibility of renewal for another five years. 1

At the time, the city estimated the first-year property tax savings to be $61,882, allocated this way: City of Wichita: $17,226. State of Kansas: $792. Sedgwick County: $5,520. USD 259 (Wichita public school district): $28,345.

The facility closed earlier this year, and will be converted to a cardiology office. This change means the facility no longer meets the criteria in the city’s economic development policy in two ways. First, the city’s policy requires medical facilities to attract at least 30 percent of its patients from outside the Wichita MSA, and the city says the new use of the facility does not meet this requirement.

Second, the new use of the facility is not the use that was approved by the council two years ago.

The city’s office of economic development recommends canceling the tax incentive after this year. This item appears on the meeting’s consent agenda, which means there will be no discussion or individual vote on this matter unless a council member requests.

I hope that a council member asks that this item receive discussion and perhaps an individual vote. This is a positive moment for the city. Not that a business failed to survive — that is unfortunate — but that the city is applying policy as designed.

Freestanding emergency departments are controversial. The notes to this article hold references to news articles and academic studies looking at the costs and usage of these facilities. 2 3 4 5 6 7 8 9

Researchers note that the emergency rooms are much more expensive than traditional doctor offices or urgent care facilities, yet many of the diagnoses made at the ERs are the same as made at non-emergency facilities.


Notes

  1. Weeks, Bob. Free standing emergency department about to open in Wichita. Available at https://wichitaliberty.org/wichita-government/free-standing-emergency-department-room-open-in-wichita/.
  2. NBC News. You Thought It Was An Urgent Care Center, Until You Got the Bill. Available at https://www.nbcnews.com/health/health-care/you-thought-it-was-urgent-care-center-until-you-got-n750906.
  3. Carolyn Y. Johnson. Free-standing ERs offer care without the wait. But patients can still pay $6,800 to treat a cut. Washington Post, May 7, 2017. Available at http://wapo.st/2pUCskD?tid=ss_tw&utm_term=.21bb76a447aa.
  4. Rice, Sabriya.Texans overpaid for some medical services by thousands, study says. Dallas Morning News. Available at https://www.dallasnews.com/business/health-care/2017/03/23/texans-overpaid-medical-services-thousands-study-said.
  5. Blue Cross Blue Shield of Texas. Rice U. Study: Freestanding Emergency Departments In Texas Deliver Costly Care, ‘Sticker Shock’. Available at https://www.bcbstx.com/company-info/news/news?lid=j0s5sm9d.
  6. Alan A. Ayers, MBA, MAcc. Dissecting the Cost of a Freestanding Emergency Department Visit. Available at https://c.ymcdn.com/sites/ucaoa.site-ym.com/resource/resmgr/Alan_Ayers_Blog/UCAOA_Ayers_Blog_FSED_Pricin.pdf.
  7. Michael L. Callaham. Editor in Chief Overview: A Controversy About Freestanding Emergency Departments. Annals of Emergency Medicine, Volume 70, Issue 6, 2017, pp. 843-845. Available at http://www.annemergmed.com/article/S0196-0644(17)31505-6/fulltext.
  8. Ho, Vivian et al. Comparing Utilization and Costs of Care in Freestanding Emergency Departments, Hospital Emergency Departments, and Urgent Care Centers. Annals of Emergency Medicine, Volume 70 , Issue 6 , 846 – 857.e3. Available at http://www.annemergmed.com/article/S0196-0644(16)31522-0/fulltext.
  9. Jeremiah D. Schuur, Donald M. Yealy, Michael L. Callaham. Comparing Freestanding Emergency Departments, Hospital-Based Emergency Departments, and Urgent Care in Texas: Apples, Oranges, or Lemons? Annals of Emergency Medicine, Volume 70, Issue 6, 2017, pp. 858-861. Available at http://www.annemergmed.com/article/S0196-0644(17)30473-0/fulltext.
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