09/12/12 — Hospital rates to rise

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Hospital rates to rise

By Phyllis Moore
Published in News on September 12, 2012 1:46 PM

Wayne Memorial Hospital will operate under a $457 million budget for the coming year, which reflects a 5.2 percent rate increase and a $300,000 salary increase for hospital employees.

The board passed the budget Tuesday.

Becky Craig, chief financial officer for the hospital, said the 5 percent rate increase translates to about $21.5 million.

She said the finance committee considered a number of factors in making its decision, including comparison of charges for inpatients, ambulatory surgery and all other outpatient procedures, and taking into consideration changes in payment classifications for Medicare services.

"Our board over time has been fiscally conservative," said William Paugh, hospital president and CEO. "What's driving this 5 percent increase is our need to have a positive operating margin. If we're going to remain an independent community hospital, we have to have access to capital to build things.

"We have gotten the demonstration that we can have a positive margin. Even with the 5 percent that we think the board is going to approve on our rates, we're still comparable with other hospitals."

The key expenses for the coming year will be software licensing costs, physician contracts, utilities and insurance.

"We have got $9 million (in capital items)," Mrs. Craig said. "Just routine kind of things -- replacing equipment in the (operating rooms), furniture, fixtures, elevator upgrades. Long-term is the space for new primary care practices, which will be completed near the end of fiscal year 2012, on the hospital's main campus."

The economy continues to play a major role in the annual budget, officials said. This is the second year for a 5 percent rate increase, following two years of 4 percent hikes. Prior to that, in 2009, the budget increase had been 9.5 percent.

The local economy might be fairly steady compared with other parts of the country, they said, but it is not thriving and patients still need care.

The number of uninsured residents in Wayne County has grown from 15 percent to 20 percent and other changes to the health care system are expected.

Admissions are expected to decrease by 7 percent, compared to the prior year, which had been below budget estimates, and the number of uninsured leading to higher charity and bad debt cases is also expected to climb.

Overall, Wayne Memorial is focusing on three main objectives for the near future, the officials said -- better care for individuals, better care for special populations and lower per capita costs.

"We're part of the diabetes belt," Mrs. Craig said, explaining that currently, one in 10 Wayne County residents is a diabetic, and that number is expected to climb even higher.

A new physician has been hired at the Wound Care Center, which coordinates inpatient and outpatient care to prevent some of the more extreme outcomes, including blindness, amputation, heart disease, stroke, etc.

The hospital also continues its physician recruitment efforts. Another general surgeon and neurosurgeon are high on that list.