With the battle of healthcare rocking the media world and Capitol Hill, there are a lot of misconceptions floating around. Now that the government has undertaken a complete overhaul of the healthcare system, all information and data is being summoned to determine why our system is ineffective. It’s important to note that by health care costs, this article is referring to the amount of money spent on each enrollee in Medicare, the government health program which primarily serves older (over 65) or disabled Americans.
One of these factors is the wide variation in health care costs across differing regions. Many were surprised to find such a high cost in some areas while other areas are 55% lower in cost. For example: Miami, FL spends an average of more than $16,000 per patient; New York, NY spends an average of just over $9,000; Spokane, WA spends almost $7,000 per patient; and the lowest average amount spent per patient is Honolulu, HI coming in at only $5,000.
Why such a wide variation?
Analysts have discovered many reasons for this wide variation in health care costs. Population seems to be a major factor in the amount of money spent. A denser population tends to mean bigger hospitals and more Medicare patients.
Analysts have also concluded the higher health care cost of some areas doesn’t mean that the patients are receiving better care; results have shown the opposite. This brings many to the conclusion that there may be a lot of waste and ineffective hospital practices.
Results are also showing that the hospitals located in these higher-spending areas are considered a “supply-sensitive” hospital which means that they are more likely to do more tests, recommend seeing more doctors and admit patients more frequently.
What does this mean for healthcare?
Now that the government is taking an active role in reforming the public-assisted health care costs, all of the practices of hospitals will be under scrutiny to determine exactly why the costs vary so much. There will also be initiatives to reduce the amount of money being spent and to control waste.
One of the most visible local “results” in Louisville, Kentucky and many other communities has been the trend of hospitals buying physician practices. The theory is that by employing physicians, the hospitals may gain more control over referral patterns – for example, directing more testing procedures to their facilities – or may be able to increase efficiences as care is delivered.
These are only a few examples of what is being considered in the health care reform. Time will tell how the issues over the cost of health care are resolved – regardless of the path we take, health care is likely to be a heated topic for many years to come.
Some of this information was originaly presented by NBC News and from The Henry J. Kaiser Foundation.