Hospital pricing to become public on January 1, 2021

by Richard Uhlhorn

Lake Chelan Health (Chelan County Public Hospital District No. 2) held its monthly board meeting virtually on Tuesday, October 27, and at the end of the two hour meeting, the subject of transparent pricing guides for potential patrons. Hospitals and clinics throughout the state must begin posting pricing on their websites by January 1, 2021.

“Imagine what that is going to do,” stated CEO George Rohrich. “I don’t know that this is gong to be good for us,” said Jordana LaPorte regarding the smaller hospital’s higher prices. Mary Murphy added that it would make the medical field a much more competitive environment.

Rohrich stated that the ability to compare prices within the industry will be a method for Lake Chelan Health to adjust its prices. He promised an update on the pricing issue at the November meeting with a test of the hospital’s pricing in December so they are ready to go January 1.

Rohrich also remarked that Amazon is entering the medical field with a Health Insurance Brokerage. “That’s where the money is,” he said.

Hospitals in general negotiate contracts with Insurance Companies and those contracts are confidential between the hospital and insurance providers. “There is going to be red faces in with the Insurance providers over this,” said Rohrich.

Ross Hurd stated that the hospital is currently working on the pricing guides and that there would be a link to those prices on the hospital’s website. Chairperson Phyllis Gleasman asked if the link would be highly visible and easy to access on the website. Hurd said that it would be.

The pricing transparency will allow potential patrons the ability to check prices for services between providers, i.e. Chelan Health versus Confluence.

In other business:

The board approved two contracts; one with Nanosonics, Inc. for $3,500  and another with Hologic Mammography for $214,000 over a three year period.

The Holigic contract is for maintenance on the Hospital’s new hi-tech mammography machine. “This is a service agreement for three years,” said Rohrich. “There is no way around this. It is part and parcel of having hi-tech equipment.” The new machine costs $360,000 with a 20% discount. The contract requires payment quarterly ($70,000 yearly).

Board Certification:

The Hospital plan is to have each board member certified by the end of the year. This involves training with measurable objectives and transparency.

Another issue being addressed it a Board Job Description. This would allow potential new board members an opportunity to look at the requirements for a position on the board. “It would help people determine if they want to get involved.”

Financial report:

Interim CFO Tom Moore stated that COVID, the Sanctuary Closure and reduction in Clinic Providers has impacted the hospital’s finances. “I haven’t paid much attention to the budget,” said Moore. “It is not that meaningful.”

He stated that the Emergency Department visits haven’t been dramatically lower (down 10%). “We are very close to last year.” Hospital surgeries have been affected by COVID and EMS services continue to be right on target, according to Moore. “Clinic visits are well down from a year ago,” he said. “This will affect the revenue.”

LaPorte asked how many times an ED visit turns into a surgery? Moore replied that a small percentage of them. “Our inpatient surgery numbers are pretty small,'” stated Moore. The hospital conducts more outpatient surgeries than inpatient surgeries.

Moore said that when the budget is looked at, the hospital is going in the right direction. Currently they have 41 days of cash on hand as opposed to only 18 days last September. “Our cash position is much better than it was at the end of the year. I will have a more detailed report in November,” said Moore.

“All things considered,” continued Moore, “you could say you are better off than you might have been.” He cited the COVID grant as pulling the hospital out of the fire. “What part may have to go back is uncertain,” he said. “I think it could have been a lot worse.”

Gleasman asked what the hospital was getting for “our money” on the service agreements to collect past due invoices. Moore replied that the hospital is cash ahead over the expense. “Are we net cash ahead…yes,” he said.

LaPorte said that Resolution (contractor) is also supposed to be getting the hospital’s billing department up to speed. Moore stated that there was one analyst on site, but he couldn’t answer how many remote analysts were working. “It’s not just about collecting,” said LaPorte. Moore replied that he would have a full report for them in a couple of weeks.

Facilities report:

Rohrich told the board that the goal was to have a facilities report to them by the end of the month. LaPorte asked what the changes in the building regulations due to go into effect on February affect the new hospital construction.

Dick Bratton stated that there were two compelling code updates (Washington State Energy Code and Mechanical Design code changes) that are not huge, but would still impact the design efforts. “We want to be in front of that,” said Bratton. Grandfathering the design and construction documents before the new codes go into effect means the design team won’t have to address the code changes.

The next regularly scheduled board meeting is on November 17, 2020 beginning at 1:30 p.m. The public is encouraged to attend.

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