Whitefish takes top honors for health care costs

A recent nationwide survey ranks Whitefish as one of the least expensive rural hospital service areas for Medicare costs, second only to Bonners Ferry, Idaho. North Valley Hospital's costs are 51 percent lower than the national average for Medicare costs, the survey states.

The Dartmouth Atlas Project has been documenting distribution and use of medical resources in the U.S. for 20 years. The project reports that the average cost of taking care of a Medicare patient in Whitefish over a three-year period ending in 2006 was $3,950, compared to $15,500 in Graceville, Fla.

The Dartmouth researchers are not sure how to explain the differences, but it isn't population or health outcome. A larger percentage of high and low costs result from "discretionary decisions by physicians," the researchers said.

North Valley Hospital CEO Jason Spring said the lower numbers for Whitefish are driven by local doctors who want to avoid over utilization of services, coordinate care and "don't order unnecessary tests."

Meanwhile, figures in the hospital's "2010 Community Report," issued last week, reflect how locals are adjusting to health care costs during the current economic recession.

After steadily increasing from fiscal year 2005 through fiscal year 2008, the number of emergency department visits declined in 2009 by 6 percent to 8,613. Spring, who joined the staff in March 2009, attributed the decline to the economy and possibly the new clinic at the Flathead County Health Department, in Kalispell.

"We also preached, 'Do not go to the emergency room unless you need to,'" he said. "We want to see appropriate utilization of emergency rooms."

Declines in other areas were less significant — radiology, CT and MRI dropped 3 percent to 11,677 and hospital admissions dropped 3 percent to 1,791. The 2 percent drop in outpatient visits to 43,200 could be explained by the hospital dropping certain services, such as oxygen delivery, Spring said.

Newborn deliveries declined by 1 percent in 2009, after nearly doubling from 2005 through 2008. That could be a blip and not a trend, Spring noted. With fiscal year 2010 halfway over, Spring anticipates a big year with possibly 500 births at the hospital.

Surgical services continued to climb after dropping off in FY 2007, increasing by 5 percent in 2009. Gross patient revenue has also continued to grow, reaching $44 million last year — $8.8 million higher than in FY 2007.

Total unpaid services, however, has also increased, reaching $15.3 million last fiscal year, or about one-third of gross patient revenue. That's more than $3 million higher than the figure reported in FY 2007.

Total unpaid services includes three categories — charity care, bad debt and contractual discounts. Charity care for patients that North Valley Hospital has "deemed unable to pay" has increased by 74 percent since FY 2007 to $1.3 million.

Meanwhile, bad debt, which includes both patients who may not be able to pay and did not apply for charity, and patients who "are deemed able to pay but have not done so," dropped by 7 percent since FY 2007 to $2.7 million.

"More people are seeking charity care," Spring said, "but the drop in bad debt is also related to the decline in emergency room visits. People are seeking more economical places for care."

Contractual discounts is the difference between the actual billed charge and the reimbursement received from Medicare, Medicaid and insurance companies based on negotiated or mandated payment rates. Contractual discounts has increased 31 percent since FY 2007 to $11.2 million.

North Valley Hospital, in partnership with SunWest Bank, of Tustin, Calif., recently implemented a loan program so patients can manage billing with monthly payment plans. Patients must initially pay 4 percent of the unpaid balance or $20.

About one-third of the hospital's annual expenses are for labor, not including the 7.2 percent that's for physicians. About one-sixth of its expenses falls under debt, interest and amortization, which includes paying the new building and campus out on Highway 40.

For more information or a copy of the 2010 community report, visit online at www.nvhosp.org.