Bonner General offering information on living wills

Today is National Healthcare Decisions Day. Bonner General Hospital is offering free information about living wills and powers of attorney for healthcare today from 10 a.m.-3 p.m. in the hospital classroom. If you don’t currently have an advance directive in place, please stop by the hospital for information about this important issue.

I am often asked about how Bonner General Hospital is funded, particularly as the cost of healthcare continues to rise. Today we’ll answer that question with an overview of how Bonner General Hospital receives its funding.

A commonly-asked question is whether BGH is supported by taxpayer dollars. BGH receives Bonner County property tax money through Pend Oreille Hospital District. These property taxes are levied for the specific purpose of paying BGH’s maintenance and operation expenditures such as fuel, electricity, gas, water and garbage disposal. However, these tax dollars comprise only a small fraction of the hospital’s overall annual net revenue. In 2007, the levied taxes equaled 2 percent of the hospital’s total net revenue and paid for 25.9 percent of the hospital’s maintenance and operational expenses.

So if tax dollars aren’t a substantial funding source for BGH, where does the money to operate the hospital come from? The majority (approximately 95 percent) of BGH’s annual net revenue is derived from payment for services the hospital provides to its patients. BGH receives payment for these services from various sources listed below, with the largest portion (52 percent) coming from the federally-funded Medicare and Medicaid programs.

In many instances, however, BGH is reimbursed for only a portion of the charges it bills when the hospital provides medical services to patients. For example, Medicare uses a “diagnosis-related group” or “DRG” system of payment. Under this system, Medicare pays a predetermined flat rate based on a patient’s medical diagnosis, regardless of the cost the hospital incurs in providing services to that patient. These pre-set payment rates are typically much less than the amount the hospital charges to provide the services. In 2007, for example, Medicare reimbursed only 59 percent of the amount BGH charged to provide services to its Medicare patients; Medicaid reimbursed 68 percent.

Rural hospitals operate on a razor-thin margin, and BGH is no exception. Reimbursement rates often don’t keep pace with the increasing cost of providing medical care, making continued fiscal responsibility essential to the hospital’s survival. Additional funding sources also become increasing vital to BGH’s ability to deliver high-quality care. In a future column, we’ll talk about the formation of the BGH Foundation and the role it will play in developing those diversified financial resources to enable BGH to provide leading-edge medical equipment and technology for our community.

? Lynda Metz is the director of community development at Bonner General Hospital.