El Camino Hospital will start off the new fiscal year with a rate increase, after the board of directors approved the budget at last Wednesday’s meeting.
The increase in cost of services is intended to bring El Camino up to charging at the 75th percentile compared with local hospitals such as Stanford Hospital, Good Samaritan and O’Connor hospitals in San Jose, and Mills Hospital in San Mateo, according to CFO and interim CEO Marla Gularte. Previous rates at El Camino had been around the 25th percentile for the area, and in the 10th percentile for Northern California, Gularte said.
The rate increases, which took effect July 1, focused mainly on hospital stays and emergency room costs. For example, a one-night stay in the intensive care unit went from $8,000 to about $10,000.
To offset the increases, Gularte said the hospital would offer a 75 percent discount to patients who pay cash instead of using their medical insurance. Further, El Camino would reduce some pharmacy prices.
The increase was met with apprehension from board member and cardiologist Dominick Curatola.
“I’m concerned this is going to push more patients to go elsewhere,” Curatola said, adding, “I have a nurse and a receptionist who won’t have their work done here because of the out-of-pocket expense.”
However, Gularte said keeping the rates equal or lowering them would not be an option.
“We would have to increase our volume three to four times to lower our rates to those levels,” she said.
The board, minus the absent president Edward Bough and director Mark O’Connor, approved the budget with a net operating revenue of nearly $400 million, which is up $40 million from the prior fiscal year.
The budget also indicated $3 million in savings that the hospital would experience based on phasing out the subacute, long-term care unit, which will close in 2008. The unit held about 40 patients, half of whom have already transferred to another facility.
Also at the meeting, the board unanimously approved $3 million for upgrades and repairs for ECHO, the new computerized patient record system. Part of that project would include re-implementing the pharmacy computer system to prevent errors that had been occurring when the system was first installed.
The improvements would attempt to streamline the system and make it more intuitive, addressing complaints from physicians and nurses about ECHO since it was launched in March.
“We still have a long way to go to make it as user friendly as possible,” said Frank Galli, cardiologist and new chief of staff, during the meeting.
Because this round of improvements will take more than a year to complete, the budget for the current fiscal year removed $2 million for ECHO training, which Diana Russell, vice president of patient care, said will be reinstated for the subsequent fiscal year.
Additionally, the board unanimously approved a motion that would bring in an outside pharmacy management company, Cardinal Health, for at least the next three years. Gularte said current pharmacy employees would stay on, and current managers would have the option of applying for one of four managerial positions through Cardinal.
“We’re not looking to fire anyone,” Gularte said after the meeting.
Gularte will negotiate a contract with Cardinal, and the hospital intends to pay $400,000 for the first six months.
E-mail Molly Tanenbaum at mtanenbaum@mv-voice.com
