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Calendar Health Coverage’s $20,000 Tab
Household Costs in L.A. Inch Toward New High
May 21-22 It costs nearly $20,000 a year for a household $9,235 nationwide in 2002, meaning they
in Los Angeles to obtain healthcare through have more than doubled in less than a decade.
8(2/9-*4/(!O3)1=(;-2-5&!>22/(4?)!>441(2! job-based insurance coverage – an amount As for California, Milliman Principal Chris
N)0/?(2!,!C?/)4;/9/?!N));/45@!P=4/!7-+! that has nearly doubled in less than a decade, Girod conceded that costs are almost certainly
>45)2)+!:-;)2@!D/+?1++/-4!-9!-+;)-F-*-+/+6!
+=(22!=-2)?12)!;3)*(F/)+!(40!F(&=)4;! according to a new report by Milliman, Inc. higher in Northern California, where hospitals
*)9-*=6!(=-45!-;3)*!;-F/?+@!GQQHG"RQ@ Milliman’s annual Medical Index was tend to be consolidated into chains and often
published just as UCLA researchers concluded charge signicantly more for procedures.
82/?L!:)*)!M-*!N-*)!<49-*=(;/-4 that the state’s uninsured population could “It’s a well-known fact that hospital costs
signifcantly benet from subsidized coverage in the north tend to be more expensive,” Girod
expected to be offered on the state’s health said, “but even in the Los Angeles market you
insurance exchanges beginning in 2014, as can see tremendous variations of cost.”
June 3-5 well as an expansion of the Medi-Cal Girod was unable to say whether the
program. more than 2 million Californians who have
The annual healthcare cost for a family lost their healthcare insurance during the
8(2/9-*4/(!:)(2;3!8(*)!7)(0)*+3/F! of four in Los Angeles this year was $19,391, recession have impacted hospital pricing
>?(0)=&@!O)4(/++(4?)!E+=)*)20(!O)+-*;6! just below the nationwide average of $19,393. further. “We look at negotiated prices
<40/(4!S)22+@!CF-4+-*)0!%&!;3)!8(2/9-*4/(! That is an increase of 6.7% from a year ago, (between hospital and insurers), which tend to
N)0/?(2!>++-?/(;/-46!;3/+!).)4;!/+!/4;)40)0!
;-!51/0)!=)0/?(2!F*(?;/?)+!;3*-153!;3)! when the cost was $18,098, $24 above the be tightly controlled due to limitations in
1F?-=/45!?3(45)+!%)/45!B*-153;!%&! nationwide average. contracts,” he said.
*)9-*=@!GTRKHGJRK@ The cost increase is one of the lowest in Physician costs are the largest
years, but households in Los Angeles and component of the nationwide index,
82/?L!:)*)!M-*!N-*)!<49-*=(;/-4
elsewhere remain under tremendous cost representing $6,329, followed closely by
pressures, according to Milliman ofcials. hospital inpatient care at $6,068. Outpatient
"As costs continue to grow—and even as care and pharmacy are far smaller
June 12-15 the cost trend decelerates—the total cost of components, representing $3,404 and $745,
care for American families constitutes a larger respectively.
and larger portion of the household budget," Employees will shell out $8,008 for
8(2/9-*4/(!:)(2;3!<49-*=(;/-4!>++-?/(;/-4!
(441(2!?-49)*)4?)@!A-B4!(40!8-14;*&! said Lorraine Mayne, a Milliman principal and their care, or 41%, of which $4,728 will be
:-;)2!(40!8-4.)4;/-4!8)4;)*6!C(4!D/)5-@! consulting actuary. their contribution toward healthcare coverage,
D/?1++/-4!-9!:<AE8:6!*)9-*=!(40!-;3)*! Costs in Los Angeles were $13,537 in while $3,280 will be spent on out-of-pocket
/++1)+!/=F(?;/45!3)(2;3?(*)!<A! 2006, meaning they have increased more than costs such as deductibles and co-payments.
F*-9)++/-4(2+@!G"##HGIJK@ 43% in ve years. Milliman noted in a
82/?L!:)*)!M-*!N-*)!<49-*=(;/-4 statement that nationwide costs stood at
Continued on Next Page
E-Mail
info@payersandproviders.com with
the details of your event, or call
(877) 248-2360, ext. 3. It will be
published in the Calendar section,
space permitting.
www.lakesidecommunityhealthcare.com
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Payers & Providers NEWS Page 2
Continued on Page 3
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Payers & Providers NEWS Page 3
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Payers & Providers OPINION Page 4
9-21:)!;6!<++1)!$=
A Gold Watch’s Ceaseless Ticking
'(&)*+!,!'*-./0)*+!/+! Payout May Stress Salinas Valley For Years to Come
>1%2/+3)0!).)*&!?31*+0(&!%&!
'(&)*+!,!'*-./0)*+!'1%2/+3/456! Former Salinas Valley Hospital Chief Executive the past year. Downing's payout could have
778@!A4!(441(2!/40/./01(2! Ofcer Samuel Downing began his retirement been used to save scores of those jobs.
+1%+B*/>C/-4!/+!D==!(!&)(*! last month under a cloud. I’m not a hospital CFO, nor do I pretend to
ED$F=!/4!%12G!1>!C-!$#! The Los Angeles Times reported on $4 be one. But Salinas Valley’s payroll appears out
+1%+B*/%)*+H@!<C!/+!0)2/.)*)0!%&! million in lump-sum retirement payouts of whack with its demographics. The hospital
)I:(/2!(+!(!'JK!(CC(B3:)4C6! Downing took from the hospital, which is part has two vice presidents of nance, who are paid
-*!(+!(4!)2)BC*-4/B!4)L+2)CC)*@ of a public healthcare district. That's on top of more than $630,000 a year combined. I’d like to
his $150,000 annual pension. think they are aware of this fact.
Should he live into his 80s, Downing I'd also like to say that hospitals like Salinas
could receive about $7 million from a Valley--where the compensation practices are as
A22!(0.)*C/+/456!+1%+B*/%)*!(40! taxpayer-subsidized hospital in his iffy as the patient demographics--
)0/C-*/(2!/4M1/*/)+N retirement – likely as much as he are a rare exception, but they're
EOPPH!"FOI";Q# received for 39 years of work for not.
/4R-S>(&)*+(40>*-./0)*+@B-: the district. Payers & Providers’ sister
Downing's payouts came edition in the Midwest will be
T(/2/45!(00*)++N from multiple hospital accounts reporting this summer on hospital
O$O!U@!V-22&L--0!W(&6!X1/C)!Y as an end-run around IRS CEO compensation in the region
Y1*%(4G6!8A!=$Z#Z regulations regarding inurement-- – a followup to the work this
excessive payments to executives publication published in 2010.
of not-for-prot organizations. Payers & Providers and
W)%+/C) On top of that, Downing was researchers at MCOL examined
LLL@>(&)*+(40>*-./0)*+@B-: also paid more than $668,000 in the pay of nearly 2,000 CEOs,
K(B)%--G 2009, nearly triple the statewide CFOs and COOs of not-for-prot
LLL@R(B)%--G@B-:[>(&)*+>*-./0)*+
?L/CC)*
average for a hospital district CEO By Ron hospitals in the Midwest over the
in California. past year, and there are dozens
LLL@CL/CC)*@B-:[>(&)*+>*-./0)*+ "I think I've earned it,"
Shinkman that have received seven-gure
Downing told the Los Angeles retirement payouts. Some even
Times about his pay and payouts. "I worked for received millions more than Downing.
this institution and gave them my heart and Virtually all of those hospitals are facing the
\0/C-*/(2!Y-(*0 soul." same demographic and funding time bombs as
XC).)4!?@!9(2)4C/4)6!'*)+/0)4C6! At least Salinas Valley was spreading the Salinas Valley, but they have all convinced
?3)!8(:0)4!]*-1> wealth: The hospital spent more than $1,678 themselves that they must earmark signicant
per adjusted patient day on staff salaries in amounts of their revenue to attract what is
^-++!]-20%)*56!<::)0/(C)!'(+C! 2008--about 60% higher than the average deemed the best talent possible. This may get
83(/*:(46!7-+!^-%2)+!V-+>/C(2!,! California hospital, according to data from the them veteran hospital executives, but it also
T)0/B(2!8)4C)* Ofce of Statewide Health Planning and serves to drive up their pay demands – creating
Development. potential future shortfalls and PR fallout.
A4C3-4&!W*/53C6!\_)B1C/.)! Meanwhile, nearly a quarter of Salinas’ Downing is entitled to a solid pension, but
J/*)BC-*6!V)(2C3!ABB)++!8(2/R-*4/(! residents live in poverty – also about 60% the extra money purposely set aside for his exit
higher than the statewide average. will be sorely missed by his former employer. If
V)4*&!7-1%)C6!83/)R!XC*(C)5&!
`RR/B)*6!a))4(4 This is borne out by some of Salinas his successor believes it has set a precedent,
Valley's other bottom-line stats. It spent more even more millions will be taken out of that
T(*G!K/41B(4)6!T(4(5/45! than $14 million on charity and system.
J/*)BC-*6!A2.(*)b!,!T(*+(2 uncompensated care in 2008, about ve times That inevitably will make it hard for Salinas
the average California hospital. And while it Valley to live up to its motto: "Neighbors Who
reported a surplus in that year, it lost about $64 Care."
million treating Medicare patients.
Given the combination of California's
'1%2/+3)*[\0/C-*I/4I83/)R Ron Shinkman is the publisher of Payers &
woeful economy and aging population, those
Providers.
^-4!X3/4G:(4 stats have virtually no chance of improvement
for the foreseeable future. In fact, Salinas Valley
)0/C-*S>(&)*+(40>*-./0)*+@B-: Op-ed submissions of up to 600 words are
had to eliminate about 600 staff positions over
welcomed. Please e-mail proposals to
editor@payersandproviders.com,
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Payers & Providers MARKETPLACE/EMPLOYMENT Page 5
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Please Contact:
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Payers & Providers MARKETPLACE/EMPLOYMENT Page 6
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