Story originally printed in the La Crosse Tribune or online at www.lacrossetribune.com
Published - Thursday, September 04, 2008
Franciscan Skemp to raise prices 4.75 percent; rate hike lowest in a decade
Prices at Franciscan Skemp Healthcare will increase an average of 4.75 percent effective next month, the lowest rate hike in 10 years.
The average price increase will take effect at Franciscan Skemp’s La Crosse, Arcadia and Sparta hospitals, and affiliated clinics at different dates, starting Oct. 1.
Franciscan Skemp had a
4 percent rate increase in 1999.
In October 2007, Franciscan Skemp increased prices by 6.5 percent at its hospitals and by 7 percent at its clinics. In January 2008, Gundersen Lutheran raised its prices an average of 4.6 percent, its lowest rate increase in 10 years. Gundersen Lutheran will announce its rate increases for 2009 later this year.
Tom Tiggelaar, Franciscan Skemp vice president of finance and chief financial officer, said the 2009 price increase among Wisconsin hospitals so far has averaged 5.9 percent, compared with an average of 6.24 percent for 2008.
Tiggelaar said he attributed the lower rate hike at Franciscan Skemp to more efficiencies in operations, an increase in patient volume and revenues and a slight increase in Medicare reimbursement, among several other factors.
Tiggelaar said the number of face-to-face patient visits has increased by 40,000 since 2007, and he expects that to rise by another 10,000 in 2009.
“We’re experiencing phenomenal growth at the Onalaska clinic and also growth in insurance plans,” he said.
Medicare reimbursement will go up 3.14 percent for inpatient services and 4.5 percent for outpatient services next year, Tiggelaar said. Medicaid reimbursement will not increase much, he said.
The federal government most recently paid Franciscan Skemp only 32.6 percent of the cost for Medicaid patients and 74.3 percent of the cost for Medicare patients, well below the national average, Tiggelaar said.
Tiggelaar said inflation, unreimbursed government care and paying competitive salaries are still major reasons for the rate increase, but unpaid medical bills and charity care are becoming a bigger factor in the financial picture.
Bad debt for Franciscan Skemp patients who are classified as able to pay but don’t is expected to rise to $18 million in 2009, up from $15 million in 2007, he said. Unreimbursed care provided to charity patients is expected to rise another $2.3 million to $7.9 million in 2009. The amount of charity care was $4 million in 2006.
“Another concern is the rising energy costs and trying to keep pace with inflation,” Tiggelaar said.
Franciscan Skemp also is creating an electronic medical record system with Mayo Clinic, which costs millions of dollars, he said. Next year, the health system will invest $4 million in the system.
New charges
Rates per day)
Service, previous charge, new charge
Private room, $310, $325
Semi-private room,$290,$305
Nursery room,$100,$105
General medical/surgical nursing,$775,$810
Intensive care room/board,$570,$595
ICU-critical care,$1,245,$1,305
Emergency services (level 4),$329,$345
Birthing room,$815,$855
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