Three months after opening a $50 million hospital in Shawano, ThedaCare health system is raising prices locally and severing ties with an insurance company that covers hundreds of area consumers.
ThedaCare says neither action is directly related to the new hospital, and that the company is dedicated to providing quality health care services at affordable prices in Shawano.
Some customers are upset, however, that ThedaCare is asking consumers to pay more so soon after opening its new facility and closing down Shawano Medical Center.
For many, the situation is aggravated by the fact that it comes after deadlines have passed to switch health insurance providers, under the Affordable Care Act, for coverage Jan. 1.
“This isn’t right,” Shawano resident Julie Mente said. “If they knew this was coming, why did they not say something?”
ThedaCare chief financial officer Tim Olson said the price increases are required for ThedaCare to keep up with operating expenses, including the cost of hiring top-quality doctors and nurses.
The unrelated move to sever ties with Menasha-based insurer Network Health Plan is the result of a disagreement over how much ThedaCare should receive for treating Network Health clients, Olson said.
The change was announced to consumers immediately, he added, although he agreed that affected customers have reason to be upset.
“People feel like something is being taken away from them, and quite frankly they are,” he said. “It’s not a good scenario for anybody.”
Network Health provides insurance to about 3,700 customers in Shawano County, most of them senior citizens who rely on Network Health to administer their Medicare health benefits. The company also handles health insurance for employees at several area businesses, including forestry supplier TimberPro Inc.
Cindy Jesse, human resources manager for TimberPro, said she believes ThedaCare is trying to collect more money to pay for the new hospital. Officially known as ThedaCare Medical Center-Shawano, the 128,000-square-foot facility opened in September on the southern edge of Shawano.
TimberPro employees have complained about poor service at the new hospital, Jesse said, and she has advised employees to seek out different health care choices in Green Bay or Clintonville.
Even if ThedaCare drops Network Health, Jesse said, TimberPro probably will stick with the insurance company. She suspects other local customers will do the same thing.
“They’re going to lose a lot of business,” she said of ThedaCare. “Everybody’s upset.”
Based in Appleton, ThedaCare moved into the Shawano area in 2006 by opening a clinic that competed with Shawano Medical Center, the community’s hospital since the 1930s. After years of competition, the two sides in 2011 forged a partnership and began making plans for a new hospital here.
The new hospital celebrated its grand opening Sept. 20, promising health care consumers improved services, new efficiencies and state-of-the-art technology. On the same day the $50 million facility opened its doors, Shawano Medical Center shut down.
Earlier this month, ThedaCare announced price increases averaging about 2 percent for services offered in Shawano, effective Jan. 17. A private hospital room, for example, is increasing from $893 to $938 per day. State law requires hospitals to announce certain price increases publicly.
Olson said ThedaCare’s price increases are below average compared with other hospitals, and are being driven by rising costs in the industry.
“We’re trying to minimize it as much as possible,” he said.
Of the split with Network Health, Olson said ThedaCare has tried to negotiate higher reimbursement rates from the insurer. With no success in negotiation, ThedaCare announced Dec. 15 that it would stop accepting Network Health coverage effective July 31, ending a five-year partnership.
“We had to move on,” Olson said.
Network Health officials expressed disappointment with ThedaCare’s decision and said they are looking for ways to minimize the impact on customers.
Penny Ransom, chief administrative officer for Network Health, said officials are hoping to continue talks with ThedaCare to seek out ways of salvaging the relationship. ThedaCare’s announcement came as a surprise, Ransom said, because Network Health had just agreed to increase its reimbursement rates earlier this year. She would not disclose details of the rate structure.
Breaking off the partnership will affect Shawano County consumers disproportionately, Ransom said, because ThedaCare has become such a prominent player in health care locally.
“People will have to make decisions, unfortunately,” she said. “This is very disappointing.”
Mente said she and her husband, Roy, have been pleased with Network Health as their insurance provider. The retired couple, both in their 70s, also have been impressed by ThedaCare’s new hospital.
Mente called it troubling that by next summer the couple’s insurance might not be accepted at their hometown hospital.
“If it isn’t there for you, it’s kind of scary,” she said. “Where are you going to go?”
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