St. John’s Health is raising its prices.
At the hospital’s board of trustees meeting June 29, the board approved an 8% average price increase for inpatient and outpatient services. That doesn’t mean each procedure will go up that 8%, but that the across-the-board increase will come out to that figure.
Chief Financial Officer John Kren told the board that 8% would bring the hospital’s prices in line with the average at similar Mountain West facilities, something St. John’s has been looking to do in recent years. Hospitals generally raise their prices yearly, so if those other medical centers raise their prices for the next fiscal year, St. John’s would conceivably again be below the average.
“Given where we are not only with the whole COVID environment, but given that we’re trying to get ourselves up to at least the midpoint,” Kren said, “our analysis proves out in many different ways that targeting an 8% price increase, on average across the board, was the best target for this year.”
The increase is the same amount St. John’s bumped its prices last year. The increase allows the hospital to reinvest in programs or cover the cost of new equipment. And with the sharp financial pressure the coronavirus pandemic has put on medical facilities across the country, this will help St. John’s recover more quickly.
Elective surgeries, which is how most hospitals make the majority of their money, had been halted during the initial outbreak, but Kren told the board that they have picked back up, which will refill the coffers at St. John’s. However, the future availability of testing supplies isn’t a guarantee, and if the hospital isn’t able to test each patient before a procedure, it could have a deleterious effect.
“That adds a lot of kind of frightening variability to our revenue, our most important revenue stream ... sustaining elective surgery,” Kren said.