SENATE BILL REPORT

ESSB 5178

BYSenate Committee on Health Care & Corrections (originally sponsored by Senators Patterson, Conner, Barr, Metcalf, Sellar, Benitz, Anderson, West and Kreidler)

Defining rural hospitals.

Senate Committee on Health Care & Corrections

Senate Hearing Date(s):January 26, 1989; February 2, 1989

Majority Report:  That Substitute Senate Bill No. 5178 be substituted therefor, and the substitute bill do pass.

      Signed by Senators West, Chairman; Smith, Vice Chairman; Amondson, Johnson, Niemi.

Senate Staff:Scott Plack (786-7409)

                  March 13, 1989

AS PASSED SENATE, MARCH 10, 1989

BACKGROUND:

The Washington State Hospital Commission was established in 1973 to regulate hospital costs by assuring a reasonable relationship between hospital charges and costs.  The commission reviews and prospectively approves requests for hospital budget and rate changes as well as amendments to budget requests.  It also conducts year-end reviews of each hospital's financial performance to determine conformance to the commission's approved rates.

The Washington Rural Health Care Commission was formed by the Legislature to identify rural health care issues and to recommend changes in state health policy.  In its report to the Legislature, the Rural Health Care Commission criticized the practice of approving hospital budgets for rural hospitals.  The falling occupancy rate in these facilities is creating a financial dilemma where fixed costs are spread among fewer and fewer patients.  The Hospital Commission has responded to this by granting wide flexibility to rural hospitals when approving their budgets.  Often budgets are approved as submitted without modifications and the cost-containment value of rate approval is unclear.  Hospitals claim compliance costs are draining their limited financial resources.  In addition, most rural hospitals are district hospitals and as public bodies have an inherent consumer oversight through the election of district commissioners.

SUMMARY:

Rural hospitals are defined.

Rural hospitals are exempt for rate approval requirements under the State Hospital Commission statutes.  Hospital data reporting requirements are maintained.

Appropriation:    none

Revenue:    none

Fiscal Note:      requested January 18, 1989

Senate Committee - Testified: Jeff Mero, State Hospital Association (pro); Dr. John Anderson (pro); Dr. Stephen Kriebel, WSMA, WHFP (pro); Tom Martin, Lincoln Hospital (pro)