MONTEREY COUNTY, Calif. (KION-TV)- A new study from the University of California Berkeley Labor Center is shedding light on what they claim are higher-than-average hospital costs at Monterey County's three major hospitals.
Health Care Program Director with the University of California Berkeley Labor Center and author of the study Laurel Lucia says that employer-plan prices for inpatient and outpatient services were 4.2 to 4.5 times Medicare prices, according to a RAND analysis. This makes prices 50% more than the median California hospital.
In places like the Bay Area with an estimated population of 7.753 million (in 2018), which is almost 18 times more than Monterey Couty's population of 437,325 (in 2021), the median hospital had employer-plan prices that were 3 times Medicare prices.
“Market concentration is one part of the reason for the high prices,” said Lucia, who noted that there are only four hospitals in the county and only three within easy traveling distance for most Monterey and Salinas workers. “More data and scrutiny are needed to better understand the root of the problem and offer patients solutions to the staggering burden of hospital bills,” she said.
Lucia also pointed out that while prices are higher at these three hospitals, that doesn't translate to higher wages for employees. The U.S. Bureau of Labor Statistics found that hourly wages for registered nurses and medical assistants in the Salinas area were slightly below the statewide median in May 2022.
Lucia said all these factors don't add up as to why prices are so high at these three hospitals.
"This doesn't explain how the money is being spent with these higher prices and higher revenues," said Lucia. "And I didn't find any obvious explanations for how these hospitals were different in terms of their spending. Healthcare workers in the Monterey and Salinas regions have wages that are similar to the statewide average"
The Rand data also shows that hospital prices at the three Monterey-Salinas hospitals are in the top 10 to 15% of all hospitals statewide for how high prices are that employers pay.
So there is no clear answer to where the added revenue is going.
KION reached out to Natividad Medical Center and Salinas Valley Memorial Hospital for a statement. They have yet to return our emails for an interview or a statement. This article will updated when one is given.
Montage Health, owners of Community Hospital of the Monterey Peninsula, provided a statement to KION that read in part:
Seventy percent of hospitals in California are operating at a loss or with unsustainable margins. As a result, many hospitals are cutting services, laying off staff and, in extreme cases, being forced to close. In the tri-county area alone, patients have been profoundly impacted by the distressed operations of Hazel Hawkins Memorial Hospital in Hollister and Watsonville Community Hospital.
The patients served by Monterey County’s hospitals expect and deserve the stability that comes from a well-run, economically sustainable, modern, full-service hospital. Our patients and our community deserve a world-class healthcare system that provides the full spectrum of services, free of labor shortages and service closures. Patients throughout many California communities have experienced curtailed services and increasing difficulty accessing care as their local hospitals have operated at a loss. Montage Health is committed to not letting that happen in Monterey County.
Discounting our rates to a level that does not sustain the long-term viability of our local hospital would be irresponsible. Buckling to rates that could result in large-scale layoffs or cutting vital services would be management malpractice.Montage Health Vice President/Chief Financial Officer Matt Morgan
The full statement can be read below:
To see the full UC Berkeley study, click here.