Guinn drops hospital cost caps

Sunday, Jan. 31, 1999 | 9:24 a.m.

Guinn, who took office earlier this month, has proposed letting a law expire that has capped yearly increases in charges at five major hospitals in Clark and Washoe counties.

The law was proposed by then-Gov. Bob Miller in 1991 to help reduce the soaring cost of hospital care in Nevada, which was among the highest in the country at the time.

It followed an earlier cost containment measure pushed by then-Gov. Richard Bryan in 1986, when Nevada was rated the most expensive state in the nation for hospital care. That measure expired in 1991.

The law supported by Miller will expire on June 30 unless lawmakers renew it during the next session, which starts Monday.

The law affects Sunrise Hospital and Medical Center, Desert Springs Hospital and Valley Hospital Medical Center, all in Clark County; and Washoe Medical Center and Saint Mary's Regional Medical Center, both in Washoe County.

Guinn's 1999-2001 budget does not include two staff positions that ran the cost containment program for the state.

During the time the cap has been in effect, Nevada has fallen to about 10th among states in the cost of a hospital stay, said Charlotte Crawford, director of the state Department of Human Resources.

But Crawford said the law has outlived its usefulness because it deals with billed charges, which applies to only about 12 percent of the people who pay hospital bills. Everyone else pays a negotiated rate, she said.

"This is not a cavalier attitude that it only affects a few people, so who cares," she said. "The fact is, regulating billed charges is not an effective vehicle for controlling health care costs."

There are other ways to contain hospital costs, but the Guinn administration has focused on the budget and has not yet had a chance to discuss the issue, Crawford said.

Sunrise Hospital spokeswoman Ann Lynch agreed the law does not have much of an effect anymore.

When it was passed, more people paid for their own medical costs, she said. Now, most Nevadans have insurance plans with employers or third parties that in turn negotiate hospital rates.

Such negotiated rates, which include the amount the federal government will pay for Medicare patients, dictate hospital costs, Lynch said.

"The market is dictating prices, not the caps," she said.

But Assemblywoman Barbara Buckley, D-Las Vegas, said she's concerned about the program's expiration.

"I'm afraid that, in the end, we'll save two staff positions and incur millions and millions in added costs that will be paid by all of us," she said.

Sen. Ray Rawson, R-Las Vegas, said he does not believe that doing away with the program would have much of an effect on hospital costs. But the issue needs to be monitored, he said.