Dupper addresses rising healthcare costs
April 19, 2014
Larry Dupper, chief financial officer at Valley View Hospital, appeared before the Glenwood Springs Rotary at the Rivers Restaurant on Friday as part of an ongoing effort to discuss the rising cost of healthcare in the region.
Dupper addressed recent assertions that the hospital's cost of care has caused insurance premiums in the area to skyrocket.
"From the best data I have from the Colorado Hospital Association, what insurers pay to us is very comparable to what they pay hospitals in Denver," said Dupper.
A breakdown of 2013 expenses was included in the presentation.
Dupper pointed out that the building, which has been called overly extravagant by critics, was a comparatively small percentage.
"The amazing thing is that only four pennies per dollar a year go toward the building," he said.
How 2013 building costs compared to heavier construction years was not addressed.
"Our biggest, number one expense is people. We're a service industry," Dupper continued, explaining that 36 percent of Valley View's cost went into paychecks and benefits.
In the question and answer section, one Rotarian inquired whether Gary Brewer, the hospitals CEO, really makes $1.2 million annually as has been rumored.
"That's not correct," Dupper responded.
Pressed to reveal the actual figure, he declined. "I'm not going to say what he makes," he said. "I believe it's very appropriate."
According to Dupper's data, a further 18 percent goes to general operating costs, 22 percent to federal payment shortfalls, 9 percent to state payment shortfalls, 9 percent to charity care and bad debt, and 2 percent to equipment cost.
"It's like a hidden tax," Dupper said of the combined cost of shortfalls and charity care for patients that can't afford it.
"We're the bedroom community for Aspen and Vail," he said. "We take care of all those folks. I'm very proud that we do, but it's an expense."
Dupper's theory about the high cost of insurance is Garfield County's recent inclusion in the so called "resort" region of Colorado, which has 11 such subdivisions for insurance purposes. He noted that premiums in the area have run around 44 percent more expensive than average, with the actual cost of procedures only about 10 percent more than the state as a whole.
By contrast, he said, medical costs in Pueblo are well above average but premiums are below.
"As an insurance company, you sell to what the market is," he explained. "These people [who live in the 'resort' market] have a lot of money, and they pay well for everything else."
That's not true for all of the so called "resort" district. Valley View Hospital's service area contains plenty of working-class patients.
"The majority of our business is still from Glenwood Springs and Garfield County," he observed.