Self Regional Healthcare, going against decades of increasing patient hospital costs nationally, on Monday announced an average rate reduction of 5 percent starting Oct. 1.
The rate reduction, recently approved by the not-for-profit Greenwood hospital’s board, includes a 15 percent reduction for outpatient imaging services, 10 percent reduction for outpatient lab services and a 5 percent reduction for inpatient rooms.
“We are able to be a state leader in the efforts to reduce health care costs thanks to very hard work over the past few years, which has touched every part of our organization,” said Jim Pfeiffer, Self’s president and CEO, in a news release. “We are excited to be able to drive down the cost curve in health care.”
Self credited staffing adjustments and reduced pharmaceutical and supply costs. Self claimed it is the first hospital in the state to announce an overall price reduction. The S.C. Hospital Association doesn’t keep records on individual hospital rate increases or decreases, but the association agreed the reduction is unusual.
Columbia-based health care economist Lynn Bailey called the move unprecedented, but she wondered if the changes in charge rates will translate to actual changes in what most people pay. Hospitals typically reduce charge rates in negotiations with large payers such as Medicare and insurance companies. “I doubt it will change the bottom line on the bills to patients or third parties,” Bailey said.
Hospital rates are buried in hard-to-decipher documents called charge masters. A study by The Commonwealth Fund estimated an average rate increase of about 8.57 percent annually in South Carolina hospitals from 1974 through 2007.
But the average increase of overall health care spending slowed to about 3.9 percent from 2009-2011. Last year, Greenville Hospital System announced a 4.7 rate increase for its services.
In June, Greenville Health System completed a merger with the Laurens County Health Care System. In neighboring Greenwood County, Self Regional will compete with the new Greenville Health System for patients.