Northern Arizona Healthcare’s plan to build a new hospital to provide better care to the region will not increase the cost of health care for its patients.
Health care costs to the vast majority of our patients are determined by the amount the federal government pays for health care in the Medicare program. These rates are set annually by the federal government. For patients with private insurance, their rates are typically set as a percentage of the Medicare payment amount. In both cases, these are fixed-rate payments based on the type of procedure or care a patient receives. (Read more on this from the American Hospital Association.)
For any uninsured or self-pay patients, NAH always works closely with the patient and their family to locate and secure third-party payment resources, and has financial assistance programs to ensure patients can get the care they need.
NAH negotiates with private insurance companies – or advocates for rates set by the federal government in the case of Medicare and Medicaid – to aim for rates that fully cover the cost of care. In recent years those rates have not kept up with the cost of providing care. Hospitals pay the same inflation on labor and supplies that the rest of the economy and households experience. This is why many hospitals are struggling financially.
NAH already must budget a certain amount of operating expense to maintain or improve all facilities. The cost for the new hospital will be incorporated into this same budgeting process as NAH pays back the cost of construction over the next several decades. The difference to this expense will be minimal when compared to NAH’s current cost of operating in, and maintaining, an outdated hospital facility.
If voters say Yes on Proposition 480 this year to approve the rezoning needed for NAH to build a new hospital at no cost to taxpayers, the rates patients pay for health care will still be determined largely by the federal government and private insurance companies. The land development decision to build a hospital that can serve this region for decades to come is unrelated to the set rates patients will pay when seeking care for appendicitis, injuries from a car accident, or cancer-related surgery, for example.
The rates NAH patients pay for health care are in line with what patients pay when they see other health care systems in Arizona. Our plans to build a new hospital do not change the cost of care. In fact, by building a facility that can more efficiently treat patients, NAH will not have to send thousands of patients a year out of the area for care, which also reduces the cost to patients.
For more information on the new hospital, read: