Health systems raising rates: Gundersen, Mayo plan lowest price

Nov. 30--Prices at Mayo Clinic Health System-Franciscan Healthcare and Gundersen Health System will increase by the smallest amount in years next year, hospital officials say.

Mayo-Franciscan, where room rates will remain the same, plans an increase of 2.5 percent for patient care, said Tom Tiggelaar, Mayo-Franciscan's vice president and chief financial officer.

Overall, prices will increase 3.25 percent for other hospital activities.

"Despite all of the negative reimbursement, we will have the lowest price increase in more than 10 years," Tiggelaar said Friday. "We're not changing our room rates."

Gundersen's increase of 3.9 percent will be its lowest in 16 years, an official there said, adding that further details will be released.

State law requires hospitals to submit annual rate increase reports 30 days before the hikes take effect.

Mayo-Franciscan's revenue forecast is about $415 million for the La Crosse hospital and its 10 area clinics, Tiggelaar said.

"We've had some pretty significant negative impacts," Tiggelaar said, such as the federal government's sequestration cutting about $1.3 million this year and next, and Medicare reimbursements dropping another $1 million.

Price determinations pivot on projected inflation rates, reimbursement rates from the government and insurance companies and costs, he said.

Tiggelaar attributed Mayo-Franciscan's smaller increase to a lower inflation rate and the fact that "we've all been trying really hard to control costs."

The hospital uses the LEAN method popularized at Toyota Motor Corp. to increase quality while lowering costs, he said.

"We use that to eliminate waste and create new efficiencies," Tiggelar said.

Rooms at Mayo-Franciscan for obstetrics and medical/surgical patients will cost $1,790 and $1,620, respectively, the same as this year, according to the hospital's report.

Similarly, nursery rooms will remain $930, neonatal with intermediate surgery will stay at $1,815; neonatal critical nursery, $2,085; intermediate care, $2,585, and intensive care, $2,855.

Meanwhile, emergency services will rise 3.23 percent, from $465 to $480, while labor and delivery services will increase from 2.8 percent to 3.28 percent.

"We're trying to offer our patients a single Mayo standard of care while driving down costs," Tiggelaar said.

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