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Hospital considers raising fees to beat I-695 deadline

"Whidbey General Hospital’s governing board has a prickly decision to make in the next three weeks: Whether to vote in long-term rate increases now — or wait and let the public vote on future increases after Jan. 1.That’s when Initiative 695 goes into effect, requiring voter approval before the district can raise rates in the future. “The question for us is do we want to take some measures before it (I-695) goes into effect, or do we want to say, ‘the voters have spoken,’ and let the board figure its budget when 695 goes into effect,” board chairman Peter Borden said last week. “That’s why we really want people to tell us what they think at the meeting.”In an effort to hear from a bigger group of people, the board will hold its next meeting away from the hospital, at 6 p.m. Monday, Dec. 13, at the Oak Harbor Library. I-695, which will take effect Jan. 1, calls for voter approval for any and all tax and fee increases in the state.That troubles board members, who have historically decided what rates and fees to raise and when to raise them. The increases in question can number in the hundreds annually, and cover everything from the price of hospital linen and cafeteria charges to the cost of certain surgeries and overnight stays. “Every year, the board adjusts prices to reflect increases in services and supplies,” Borden said. “As I understand it (I-695), we’d have to go to the voters for every rate increase. Can you imagine a ballot with hundreds of rate increases?“I don’t think that was the intent of the initiative,” Borden said. “But the way it’s written, any monetary increase has to be approved by voters. We want to meet the spirit of what 695 was intended to do, but not give up our ability to manage the hospital.” Ironically, the board’s ability to manage Whidbey General’s affairs would be limited at a time when the publicly owned hospital is part-way into an extended period of growth and expansion.In fact, one of the topics for discussion at Monday night’s meeting is whether to approve the Facility Space Plan for 2000-2003.The plan calls for enlarging Whidbey General’s Emergency Department and Medical Ambulatory Care Clinic, providing more room for the Cardiac Rehabilitation Program and creating more space for an in-house MRI program.Initiative 695 won’t affect current revenue, said Whidbey General chief executive Scott Rhine, as the budget for 2000 has already been approved, and most revenue comes through patient charges and health plan reimbursements.And regardless of 695, the hospital will be going to the voters anyway, probably next fall, to ask for a property tax levy to fund expansion plans.On Monday, the board will decide whether to cap the hospital’s current maintenance and operations property tax levy for 2001, or to increase it to the maximum legal amount. Currently, the hospital is set to receive about $500,000 from the 2000 levy it approved in October. It still needs to decide whether to raise that further for 2001, or to leave it the same for that year.Traditionally, the board has asked for the maximum allowable 6 percent increase every year, one year at a time. But because of the uncertain impact of I-695, the board is considering taking the unusual step of approving the levy amount for the two-year period.Increasing the levy sooner could also save money, hospital chief financial officer Doug Bishop said, because the hospital could use the increase to pay off old high-interest bonds.Rhine said he had been in contact with other hospital district administrators who are examining rate increases in response to I-695.Some, he said, are considering setting rates for several years in advance . Other hospitals are considering a formula whereby rates would be determined on a cost formula. “For example, Rhine said. “Rates in 2001 could be set on a formula utilizing a consumer price index or a medical price index.”No matter what decision Whidbey General’s commissioners make Monday night, Borden said they hope to keep within the spirit of the voter-approved initiative.“It’s a very difficult situation at this point,” Borden said. “The citizens of Whidbey Island clearly voted for 695, but it can have some real ramifications on our ability to run this hospital.”"

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