The Regional Medical Center is raising rates about 5 percent under a budget unanimously approved by hospital trustees on Tuesday.

"Given the significant increase in health care costs, this type of increase is necessary for RMC to achieve the margins necessary to meet the community's needs," according to a hospital budget report.

But how much more each patient will pay will vary according to the services received and method of payment, officials say.

About half the hospital's patients have Medicare coverage and 15 percent have Medicaid coverage. Both have fixed payment contracts and will be impacted little by the increases.

Private insurance companies make up about 21 percent of the hospital's business. Those companies and patients will most likely see the largest increases.

The increases are a part of the hospital's $192.9 million budget for the 2010 fiscal year. The hospital's fiscal year runs from Oct. 1 through Sept. 30.

Trustee Danny Covington said he was generally pleased with the budget.

"I think they have done a pretty good job with it in my opinion," he said. "They did not quite get where I wanted to go but they worked on it pretty good."

Covington did suggest staff go back over the budget to ensure all is correct.

"I think we got things in here that are already paid for and possibly some things that should have been transferred and some things that should not have been transferred over," Covington said.

He says the budget sets aside $777,718 for a CT scanner, but "We approved $650,000." Hospital Chief Financial Officer Cheryl Mason said the difference is due to sales tax.

The RMC anticipates that over the next year it will have $200 million in total operating revenue and $199 million in total operating expenses.

The hospital says it is increasing rates, in part, because:

* Salaries and contract labor are increasing to $89.6 million, a $4.3 million or 5.5 percent increase from last year.

* Employee benefit expenses will reach $17.6 million, an increase of $2.1 million or 13.23 percent. This includes health insurance, payroll and pension cost increases. The hospital saw its annual pension costs increase from $2.8 million to about $4.5 million.

The hospital will also spend $20.7 million on capital projects. The hospital board was originally given a list of $34.1 million in projects to consider.

The $20.7 million finally approved will include:

* $4.9 million for facilities, including about $2.9 million to upgrade the hospital's heating and air system.

* $5.1 million for medical equipment, including about $1.2 million for its radiology department. This would entail the replacement of the hospital's 14-year-old special procedures radiology equipment. The new equipment will provide fully digital radiology, fluoroscopy and radiography examinations.

* $7.8 million for information systems, with about $2 million going to help the hospital transition to an electronic medical record database.

* About $350,713 for the purchase of a new linear accelerator in the cancer center.

Trustee Dr. Oscar Butler Jr. questioned why the purchase of a 40-foot mobile diagnostic unit van was deferred as a noncritical item. The hospital planned to purchase the van to provide digital mammography equipment and space to accommodate health screenings and other services.

Hospital President Tom Dandridge said the hospital had some tough decisions to make.

"The charge to us was to push things out that we think we don't critically need relative to other things," Dandridge said.

The vehicle will cost nearly $375,000, and the mammography unit will cost an estimated $330,000.

In other matters, trustees voted 11-1 to sign a five-year, $119,000 annual lease to relocate its patient accounts services business office and the physician building department to Building C in the Carolina Regional Park at U.S. 601 and Interstate 26. The business office building is located in the Medical Arts Center on Cook Road.

RMC officials say the hospital will lease about 9,200-square-feet -- three times the space it currently occupies -- for less money. The building will be upfitted in about 18 to 20 weeks.

Trustee Edward Furtick was the only trustee opposed.

T&D Staff Writer Gene Zaleski can be reached by e-mail at gzaleski@timesanddemocrat.com or by phone at 803-533-5551. Discuss this and other stories online at TheTandD.com.

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