Worker coalition: Hospitals’ rate hike request too high

Michelle Swafford

Friday, Jan. 28, 2005 | 10:51 a.m.

A coalition of more than 300,000 private and public employees claims that hospitals are attempting to charge between 6 percent and 11 percent more than they need to for services.

The Health Services Coalition -- a Las Vegas Valley nonprofit group that represents 23 employers and unions of teachers, firefighters, police officers, construction workers and hotel and casino employees -- has been negotiating with hospitals for better rates on its new contract.

The coalition is willing to pay up to as much as 9 percent more for its new contracted hospital rates, but hospitals are asking for an increase of more than 15 percent and less than 20 percent, coalition spokesman David Kallas said.

"We don't believe that their cost related to materials and services have gone up to the level they're asking for in an increase," he said, adding that the coalition has reviewed hospital financial statements, which are published by the state.

He said contract negotiations with each of the hospital owners has been "a little rough going," but are continuing in hopes a new contract will be approved by Monday, which is when the current contract expires. If a new contract is not approved by midnight Monday, the coalition would like an extension of its existing contract to avoid paying full charges, Kallas said, adding that the hospitals have the final say.

Hospital officials say they are working with the coalition to create a new contract that would offer discounts that vary by procedure. The contract in place was scheduled to expire Dec. 31, but was automatically extended to Jan. 31. The coalition is negotiating with each of the hospital operators separately, but wants the same terms with all of them, which is one of the hospitals' concerns.

"Our coalition members will be using their hospitals," Kallas said. "They'll be reaping benefits and profits from our members' participation."

The coalition represents employees and their families of Boyd Gaming Corp., Caesars Entertainment Inc., Harrah's Entertainment Inc., MGM Mirage, Mandalay Resort Group and union-represented carpenters, cement masons and grocery workers.

It is attempting to control health care costs by negotiating hospital rates for its members' health plans and educating members about generic prescriptions.

Bill Welch, president and chief executive of the Nevada Hospital Association, said hospital costs are rising whether the coalition wants to recognize that or not.

For example, the payroll tax hit hospitals hard, blood-processing costs doubled and nursing costs are high, he said. Also, an increasing number of mental health, Medicaid and uninsured patients are being treated in emergency rooms, none of which provide much reimbursement to the hospitals, he said.

"Whether they want to acknowledge our costs are going up, they are going up," Welch said, adding that the coalition needs to look at hospitals' profitability over time because it is cyclical. "If their costs are going up, why do they think our costs aren't?"

Mike Tymczyn, spokesman for the Valley Health System, said the Valley Health System "believes that its proposals are fair and reasonable."

The Valley Health System comprises Desert Springs, Valley, Summerlin and Spring Valley hospitals.

Having one contract is a concern to the hospitals because the coalition is not guaranteeing a certain number of patients to a hospital, which is what typically happens when insurers negotiate rates with hospitals, Welch said.

Another concern Welch and other hospital officials have expressed is the coalition's use of the media to air its complaints. The coalition bought a full-page advertisement that ran Jan. 21 in the Las Vegas Sun and the Las Vegas Review-Journal. In addition to warning people that taxpayers could be hurt if a new contract is not reached, it claimed hospitals' "prices are up, quality of care in many instances isn't." The ad did not elaborate on the coalition's quality of care concerns.

Rod Davis, president of St. Rose Dominican Hospitals -- Siena Campus and Catholic Healthcare West's Nevada market, said in a prepared statement:

"Our first priority remains providing exceptional care to our patients. However, reimbursement rates currently offered by the Health Services Coalition are well below market and we cannot continue to sustain such losses. We must obtain reasonable compensation to provide the quality care that our patients require and deserve or those services -- and the ability of our people to provide them -- will be compromised and not sustainable."