By John Flood

Thanks to an across-the-board 7 percent rate increase at El Camino Hospital, a one-night stay in the critical care unit will now set you back $8,334.

The hospital board approved the overall increase, which impacts almost all hospital services, July 12, and it went into effect retroactively July 1.

“Hospitals go through this process (of rate increases) annually,” said Jon Friedenberg, vice president for strategy and external relations. “This is not unique to El Camino Hospital,” he said. “Costs to the hospital go up. Our charges go up.”

The hospital - a full-service, acute-care facility that employs more than 2,200 people, including 830 doctors - cites several factors for the rate increase.

“Our costs for labor, energy, medical equipment and supplies are rising,” Friedenberg said. “Everyone in the (hospital) market in the county is making their adjustments as well.”

Apart from what appears to be a rate increase driven by inflation, the new rates also reflect an impending reality for the hospital: servicing up to $250 million in debt to pay for construction costs for its new hospital. The facility will comply with stricter seismic codes required by the state of California. The old hospital will be demolished after the new facility is available, according to Friedenberg.

The new 450,000-square-foot hospital, expected to be complete in 2008, will be financed through a combination of sources, including the hospital’s cash reserves, a capital campaign and tax-exempt and general-obligation bonds, according the hospital’s Web site.

Voters approved bond Measure D in 2003, which will raise $148 million for hospital construction. The current construction budget is estimated at $480 million.

“We have to borrow large sums to reinvest in new technology, in our staff, and provide high-quality care and service,” Friedenberg said. “The debt has an impact on our decision to make annual increases.”

Currently, the hospital is largely debt free, according to Friedenberg. “Our net revenue for the last fiscal year was a little over $30 million,” he said. “We currently have no debt, and most of the $30 million in net revenue will go toward debt service in future years, assuming we are able to sustain our current financial performance.”

Putting the rate increase in perspective, Friedenberg said that El Camino has traditionally been at the bottom of the rate scale while maintaining high-quality care. The hospital has received numerous awards for patient care, service and technology.

“We’ve been at or near the bottom with our charges,” he said. “And, we’ve been at the top of patient care.”

The hospital offers free medical services to people who do not have medical insurance. According to the hospital Web site, the RotaCare Free Clinic provides 5,000 services to more than 2,000 patients, including gynecological and immunization services. The clinic is supported by a variety of corporate donors and collaborates with local and community agencies.

The hospital also offers a 75 percent discount to patients without insurance, Friedenberg said.

“It’s an appropriate thing to do,” he said, “in the hope that their costs are more manageable.”