6.07% rate rise recommended for Hopkins

Hospital rate panel delays its decision

January 10, 2002|By M. William Salganik | M. William Salganik,SUN STAFF

The staff for Maryland's hospital rate-setting commission yesterday recommended a 6.07 percent increase for Johns Hopkins Hospital. The hospital had been seeking 14.5 percent over two years, but said the recommendation represented a fair compromise.

Ronald R. Peterson, chief executive of the Johns Hopkins Health System, told the Health Services Cost Review Commission that the staff recommendation would provide "the absolute minimum Hopkins needs."

The commission delayed action on the Hopkins rates.

Representatives of two insurers, CareFirst BlueCross Blue- Shield and Kaiser Permanente, told the commission yesterday that it should conduct a hearing on the issues involved or reject the Hopkins request altogether. In particular, the insurers objected to the way the commission staff compared Hopkins' costs with those of other hospitals.

After more than two hours of debate focusing on various methods of "case-mix adjustment" - with consultants for Hopkins and the insurers arguing for different ways to compare costs - the commission decided to take another week or two to review the technical issues. The "case-mix" issues matter because, when the commission sets cost-per-case targets for each hospital, it has to allow for the fact that a heart bypass case costs more than a tonsillectomy case.

The commission also wanted more information on how the Hopkins increase, if approved, might affect other hospitals.

Since the commission sets annual statewide spending targets, any extra increase given to Hopkins would be deducted from all Maryland hospitals next year.

Stuart A. Erdman, senior director of finance for the Johns Hopkins Health System, estimated that a 6.07 percent increase for Hopkins would mean that other hospitals get 0.6 percent less next year.

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