09/14/08 — Hospital to raise rates 9.5 percent

View Archive

Hospital to raise rates 9.5 percent

By Phyllis Moore
Published in News on September 14, 2008 10:55 AM

Wayne Memorial Hospital rates will go up again in the coming year -- this time 9.5 percent -- a result of continuing concerns over bad debt, increasing levels of charity care and lower reimbursement levels from Medicare/Medicaid.

The hospital board approved last week the 2008-09 expense budget for $195 million, a $7 million, or 3.7 percent, increase over the previous year.

Changes to insurance programs are part of the reason for the forecasted operating and capital budgets, said William Paugh, hospital president and chief executive officer. "In a nutshell, we're trying to cover nuances of Medicaid/Medicare. We have got to go up on our rates."

Patient volumes have remained steady, but hospital officials have noticed a change in how patients are using healthcare, probably because of the slowing economy, Paugh said.

"Folks are putting things off to a large extent -- what really doesn't have to be done," he said, adding that later some of those problems that could have been treated simply in another setting force a patient to the emergency department when the illness becomes chronic -- a more expensive treatment option.

Admissions from the emergency department are at an all-time high, he added.

While rates have gone up incrementally each year, Wayne Memorial still compares favorably with other hospitals in the region, said Rebecca Craig, vice president of finance, citing a comparison of rates for basic procedures at eastern North Carolina hospitals.

And that makes care at Wayne Memorial a bargain, Paugh said, adding that a very high percentage of local residents seek care at the hospital.

The hospital is continuing its efforts to not only provide increased services, but also to show residents they can save money by staying close to home and still get quality care.

"When you have been around as long as we have -- we opened in 1896 -- branding is difficult to deal with," he said. "What we're trying to do is get the word out about what we do and what we do well."

As always, the bulk of the hospital budget covers personnel. Technologies and the high cost of medical equipment also account for a large portion of next year's projected expense.

Keeping up with the latest medical developments is a large part of any hospital budget, Paugh said. Maintaining a balance between growth and keeping health prices reasonable is a juggling act, he added.

"We are controlling expenses to the degree that we're not wasting," he said. "If you look at this community compared to others around us, we have done a good job over time."

But by far the biggest concerns the hospital faces can be found in the payments it does or doesn't receive for the services it offers -- most notably with Medicare and Medicaid, hospital officials said. Reimbursement rate changes for those programs can dramatically affect a budget, they said.

In addition, with more uninsured and underinsured patients using Wayne Memorial's services, more delinquencies and nonpayments are affecting the hospital's bottom line, Paugh said.

"Our charity care here is going up year after year," he said. "If they have no means, it's unrealistic to think you can collect any portion, or all, up front, (so) we'll categorize them as charity care, but we're still going to have the cost."

Picking up the tab for those without the ability to pay is another reason hospitals have to make up the difference by raising rates, so health care costs more for everyone, Paugh said.

"If everyone who walked in the door would pay last year's rates plus one percent, we would be in good shape," Ms. Craig said.

Wayne Memorial Hospital is still working to improve care -- not to scrimp to make it less expensive, Paugh said. Quality care at a good value is what the hospital continues to try to provide.

"People are not looking for cheaper care," he said. "It's value, and that's what we try to bring to the table, and we think we're doing a very credible job."

With that in mind, physician recruitment and retention are ongoing efforts, particularly in the area of primary care. Nurses, meanwhile, seem to be a more positive trend.

Despite the nationwide nursing shortage, Wayne Memorial has introduced several efforts -- incentives for employees to return to school to obtain more credentials and mentoring efforts -- that seem to be working.

"We have had a banner year for recruiting nurses," Ms. Craig said.

Still, with about 450 registered nurses on staff, about a quarter are lost each year -- through the military reassignment, staying home with families or going to another job.

And as for recent rumors the hospital might be acquired by Raleigh's Wake Med system, Paugh said the hospital continues to develop ongoing relationships with other hospitals in the region, including Wake Med, but that Wayne Memorial Hospital's status remains unchanged.

"I think large systems throughout the state are really looking for other opportunities to expand," he said. "I'm not aware of a particular rumor about Wake in this community, but again all the larger systems, I think, are looking for ways to expand affiliations.

"That being said, I think this board, this medical community, is interested in doing what we can do here to be the best community hospital that we can be. That's what this budget is predicated on, now and for the future."