COUNTY OF SAN MATEO

Inter-Departmental Correspondence

San Mateo Medical Center

DATE:

May 24, 2004

BOARD MEETING DATE:

June 8, 2004

TO:

Honorable Board of Supervisors

FROM:

Nancy J. Steiger, Chief Executive Officer

SUBJECT:

Resolution Increasing the San Mateo Medical Center Charge Master

Recommendation

Adopt a resolution authorizing the Board of Supervisors to implement an across-the-board 10% rate increase along with increases in the following areas: Room rates, preventative medicine examinations and examinations at the Keller Center to the San Mateo Medical Center Charge Master (Fee Schedule for Services Provided at San Mateo Medical Center).

Background

Room rates for the SMMC were last increased July 2003 to help cover increases in the Medical Center's wages, pharmaceuticals and other operating costs. A room rate survey was conducted with comparable hospitals in November 2003 and it was verified that they were significantly below the average of all private and county hospitals.

Since that time, individual adjustments were made to Nursing and Ancillary charges as new services were implemented, or if current charges were found to be inequitable when compared to similar charges within the SMMC charge master.

Discussion

Craneware (a charge master vendor) conducted an analysis of the San Mateo Medical Center Charge Master File with comparable hospitals and found the following:

· Eighty percent (80%) of charges were below the seventy-fifth (75^th) percentile

· Average charges per discharge were the lowest in the market

· The top 25 Diagnostic Related Groups (DRG's) were also below average

· Room rates were found to be the lowest

· Outpatient surgery charges were also below average

· Preventative examination charges were the lowest

Vision Alignment

This Contract keeps the commitment to Responsive, effective and collaborative government and goal number 20: government decisions are based on careful consideration of future impact, rather than temporary relief or immediate gain. The agreement contributes to this commitment by making it possible for San Mateo Medical Center to maintain competitive pricing for its services in order to meet the revenue target for the Medical Center's FY 2004-05 Budget, to avoid losing a significant amount of revenue from the government, and to ensure recovery of appropriate reimbursement from commercial payors.

Fiscal Impact

This rate increase is expected to net an estimated additional $200,000 in revenue. It will not increase co-pays, deductibles and annual fees that patients currently pay, nor will it impact payors that currently reimburse patient services using fixed per-diems or case rates. However, it will impact payors that use a percent-of-charge reimbursement such as certain Medi-Cal eligible inpatients.