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Published: Thursday, 7/20/2006

Financial hit for St. Vincent

FOR reasons that seem to have nothing to do with common sense but everything to do with saving a few bucks, the federal government is about to stick it to St. Vincent Mercy Medical Center.

St. Vincent is looking at a major financial hit in October when the rate at which it is reimbursed for Medicare will be cut, costing the medical center as much as $8 million a year.

That's a lot for St. Vincent to absorb, and there's more bad news. Another $5 million a year reduction is looming because of changes here in Ohio in workers' compensation reimbursements.

The latter cut affects every hospital in the state, but the Medicare reimbursement reduction apparently is unique to St. Vincent in the region, and in our view it's all because the feds look at Toledo and think "small."

Technically, the change reflects a wage index reclassification that come October will no longer lump St. Vincent in with Ann Arbor in terms of labor costs. St. Vincent applied for and got an identical classification with Ann Arbor years ago because it must compete with Ann Arbor for health-care workers. It is that classification that is now at risk.

St. Vincent officials believe the sudden change is budget-driven in Washington, and for that matter, what isn't budget-driven these days in health care? But lowering St. Vincent's reimbursement rate seems counterproductive.

St. Vincent is a major trauma treatment center with eight intensive care units, including a burn unit. Most hospitals have two or three ICUs.

That means the hospital employs a lot more registered nurses than most hospitals, driving up its labor costs. St. Vincent also has a patient acuity index - a measurement of the severity of the patients treated there - of 1.9. Most hospitals are in the 1.1 or 1.2 range, and each tenth of a point increase is significant.

We think St. Vincent makes a good case for retention of its current reimbursement classification. Ohio's two U.S. senators and congressional delegation should help educate the bureaucrats at the Department of Health and Human Services whose stroke of a pen produced this predicament.

Some 120 hospitals nationally are negatively affected by the reclassification, and no doubt some of them deserve to be reclassified.

A look at the numbers suggests St. Vincent is not one of them.

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