Hospital Rates Rise 4.8%

At Gifford Medical Ctr.

By M. D. Drysdale

Vermont'stop health care regulator ruled this week that rates paid by patients at Gifford Medical Center may rise 4.8% next year, according to the Department of Banking, Insurance, Secutiries and Health Care Administration (BISHCA).

Commissioner John P. Crowley, however, trimmed Gifford's requested rate increase by a full percentage point, from a requested 5.8%.

Overall, Crowley lowered the requested rate increase of seven of Vermont's 14 hospitals. The average rate increase was cut from 7.1% to 6.6%. However, he noted that "the increase will result in only a 4.1% increase in net revenues to the hospitals because the hospitals do not receive full payment for the rates charged."

Gifford's requested rate was not cut because its projected expenses were too high, according to BISCHA's Michael Davis. Davis told The Herald this week that Gifford's projected expense budget "was good, we had no questions. Gifford met our inflation and utilization standards."

That was not true for most of the hospitals at which rate increases were lowered, Davis said. BISHCA ordered expense reductions of up to $718,000 for five of the hospitals.

Gifford's rate increase was lowered, however, because a recent study shows that it can expect more money through Medicare reimbursements than was expected.

Woodin Pleased

Joseph Woodin, president of the Gifford Medical Center, confirmed that revenue projections made in the last few months have made it possible for the rate increase to be lower than the 5.8% that was requested.

"Gifford's actually in fine shape," with the lower rate increase, he said.

He was pleased with BISCHA's overall supervision of budgets. In the past, he noted, the Department has required cuts in only two or three hospitals.

"This is the first time I've ever seen them address so many hospital budgets," he said. "I'm encouraged to see that they're looking more closely, trying to curb spending."

Permitted rate increases among the 14 Vermont hospital range from a high of 7.5% at Fletcher Allen (reduced from 8%) to a low of 4.5% at Springfield Hospital. Other hospitals on the high end included Northwestern Vermont Medical Center in St. Albans and Southwestern Vermont Medical Center of Bennington, both with 7% rate increases.

Hospital rates rise because of two main factors, said Woodin. First is an overall medical inflation rate of 4.5%. Second is an increase in utilization—more people seeking more medical services. That increases the cost of health care, too.

"Statewide, public consumption of health care resources is continuing to be a challenge," he said. "People go to the doctor more frequently than they used to.

"And technology does drive utilization. It's hard to say 'no' to people who have a medical need."