Kentucky Using Fuzzy Math to Determine Hospital Cost Effectiveness

Kentucky uses revenues and not charges to determine if hospitals are cost effective in the determination if another Certificate of Need should be awarded. 

We calculate a hospital would have to charge three times above the Kentucky state average (not 50% more) before the State feels a hospital is not cost effective.  Here's why:   In our area, approximately 75% of patients have Medicare and Medicaid.  Medicare and Medicaid not only have reduced payments compared to private insurance but payments are approximately the same for all hospitals in the state.  This tends to reduce the difference in average revenues between hospitals.

If gasoline was healthcare, we estimate that Kentucky may have Pulaski residents paying up to $8 a gallon for gas before he would allow another gas station to be built.