HEALTH CARE:

Vegas docs, hospitals bill Medicare big

Study finds program’s cost per patient here among highest in country as spending threatens program

Friday, Feb. 27, 2009 | 2 a.m.

Dartmouth Atlas of Health Care: Regional Disparity in Medicare Spending

Archive of Sun health stories

Las Vegas area hospitals cost the federal government more per Medicare patient than hospitals in about 90 percent of the regions in the country — a level of spending that is hard to justify, says a researcher who conducted an analysis of Medicare spending in the United States.

Such high spending threatens to bankrupt Medicare.

At first blush, the level of spending — $9,527 per Medicare enrollee in 2006, 15 percent more than the national average — might seem like good news for the patients, suggesting they are getting more care than the average Medicare enrollee. But receiving more services is not necessarily to patients’ benefit, according to the study, Health Care Spending, Quality, and Outcomes. On the contrary, the researchers said care is often better in lower-cost regions. The study was published this week by The Dartmouth Institute for Health Policy & Clinical Practice.

The differences in the amount of care for similar patients reflect clinical decisions based on the local “ecology” of health care — hospital capacity, imaging centers and social norms combined with a payment system that rewards greater use of medical resources, the report said.

But in fact, every hospital admission puts patients at risk of infection — at least 24,000 people die every year of hospital-acquired infections, according to the Centers for Disease Control and Prevention; and medical errors kill an estimated 98,000 people a year.

“The stark reality is that we are about to spend ourselves to death in health care,” said Dr. David Goodman, the co-principal investigator of the Dartmouth Atlas of Health Care. “If some of the locales that are experiencing high and excessive growth would moderate their growth in spending just by a bit, the whole system would be preserved.”

Generally speaking, it’s impossible to justify the high spending in places such as Las Vegas, he said.

“I would guess the entrepreneurial spirit is high in Las Vegas and they are digging themselves into a cost hole,” Goodman said.

There have been several high-profile cases of greedy Las Vegas doctors billing for services beyond what they provided. Goodman said such “profiteering” can be a factor in the high spending.

Larry Matheis, executive director of the Nevada State Medical Association, said he does not know how much greed affects the high spending. He attributes the higher costs to the transience of the Las Vegas community and the shortage of primary care doctors. People who are transient — even patients with Medicare, the federal government’s insurance for people older than 65 and with disabilities — are not connected to local doctors, so their conditions become more acute, requiring more hospital stays and intensive treatment, he said. And the shortage of primary care doctors makes it less likely that Medicare patients will manage their health, he said.

For more than 20 years, the Dartmouth Atlas Project has studied regional variations in the practice of health care, mostly based on Medicare data. The report on regional spending provides a broad overview of spending patterns but the data cannot explain specifics that drive the spending, Goodman said.

There are dramatic variations in spending nationally. Medicare spent an average of $8,304 per patient in 2006. New York spent the most per enrollee, at $9,564, and Hawaii spent the least, at $5,311.

Among hospital regions, Miami spent the most per enrollee, at $16,351, compared with Honolulu, which spent $5,311. Las Vegas ranked 36th for spending per Medicare patient in 2006 among the 306 hospital referral regions in the study.

From 1992 to 2006, the annual growth rate of per-patient Medicare spending was lowest in Honolulu, at 1.62 percent, and highest in McAllen, Texas, at 8.31 percent, the study said. In the same period, Medicare spending per enrollee grew at an annual rate of 3.61 percent in Las Vegas, slightly higher than the national average.

Medicare will be $660 billion in the red by 2023 if the excessive spending is not stopped, the report said. But there is hope. If the annual rate of growth in spending per Medicare patient could be reduced from a national average of 3.5 percent to the rate in San Francisco, 2.4 percent, Medicare could save $1.42 trillion and turn the deficit into a surplus, the report said.

It’s harder to get data on the money spent by commercial insurance providers, but Goodman said studies have shown a similar pattern of spending, where the intensity of care varies by health care region.

The federal government’s scrutiny of hospitals and doctors in high-spending regions such as Las Vegas is going to increase every year, Goodman said, and any discussions about health care reform must base reimbursements on performance and efficiency.

Discussion: 7 comments so far…

By Gregory

2/27/09 at 2:54 a.m.

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So, Mr. Matheis, we must ask, respectfully, "why is there a shortage of PCP in Southern Nevada?"

Why do doctors exit Nevada to work abroad after relocating here? Why are some of the best Nevada PCPS converting their practices to smaller boutique practices, reducing their patient loads?

The answer, as you well know, is low cost contract structure from Sierra Healthcare Services, now operating in Nevada as United Health.

Gaming companies are Nevada's largest and most influential employers. They strategically manage healthcare costs as an expense for their employees under the umbrella of 1974 Erisa law, as amended to date. They don't want to pay, just like gaming taxes. And until the federal government puts the bull ring in their nose and pulls them to the ground, they won't have to.

You know, the Employees Retirement Income Securities Act, the one providing legally complicated "minimum standards" from old Congressional and lobbyist legislation for things like long term healthcare benefits, pension plans and 401k benefits.

Now, physical insurance companies, contracted provider networks, and their client corporations will tell you that healthcare is a national problem, not just a bad, bad problem specific to Nevada. But, you know the truth.

Here's one reason the costs you are reporting are higher in Nevada. Southern Nevada provider networks deny approvals for doctor requests, so the doctor just admits their patient into the hospital, running up a larger bill. It's a nasty, greedy business, isn't it, all the worse now that is appears the federal government is going to get out the measuring stick.
By Gregory

2/27/09 at 3 a.m.

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By the way, if you go to the Mary Hitchcock Referal Hospital just north of Dartmouth College in rural, that's RURAL, New Hampshire, you will receive excellent treatment. I know, I have been a patient there. New Hampshire, with "live fee or die" on every license tag, and no sales tax. But an excellent referal hospital.
By AgMallard

2/27/09 at 6:14 a.m.

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Time and time again it's been proven that physicians respond to economic incentives. That explains the over supply of specialists here and across the nation. Pay PCP's more! But also see to it that they actually manage patients throughout their lifespans. All TOO OFTEN the PCP's in the valley turf clients to their buddy specialist at the drop of a hat. Developed countries with better health oucomes then the US rely on PCP's to hold slow spending growth thus providing better care at better value.
By AngryReader

2/27/09 at 9:30 a.m.

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Greed plain and simple. If Medicare or an enforcement agency did a compliance audit on any random sample of doc's in this valley, well let's just say the health care in the various prisons would go up in quality due to the influx of criminals with medical backgrounds.
By tvegas

2/27/09 at 12:59 p.m.

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Medical profession has been ripping off the government for years...almost seems like an entitlement program for the providers.

We need someone to make a serious audit of the providers and put the scam artists in jail...although there would be an extreme shortage of medical professionals nationwide.
By kurtz

2/27/09 at 1:36 p.m.

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122,000 people a year die from infections and errors in hospitals!!!!! its criminal along with their excessive billing.
By growler

2/27/09 at 5:24 p.m.

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There have been several high-profile cases of greedy Las Vegas doctors billing for services beyond what they provided. Goodman said such "profiteering" can be a factor in the high spending. I think my 10 year old knows this.There Maybe A temporary shortage of care providers, most will get off with some documentation, and everyone else can be replaced. The health care provider(Sierra) CEO's past and present would be A great place to look for money ill-earned, grab that 100s of millions of dollars and stick it in medicare and stick them in the can, they are greedier and have done more damage then the Doctors who have to pad the check.