Policy-ish

Recalculating The Health Bill In McAllen, Texas

Partner content from Kaiser Health News

Branded: Hospitals in McAllen, Texas, may not be as costly as first thought.

Branded: Hospitals in McAllen, Texas, may not be as costly as first thought. iStockphoto.com hide caption

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Remember McAllen? It's the Texas border town that became synonymous with wasteful medical spending during the nation's big health care debate. Even Barack Obama was talking about it.

In part because of McAllen's bad reputation, based on studies by the Dartmouth Atlas, Congress ended up instructing Medicare to reward hospitals that provide care efficiently, and take money away from those where patients end up getting a lot more tests, doctors' visits and procedures.

In an ideal world, the thinking went, patients with the same health and diagnosis should cost the same to treat — especially since Medicare pays set fees and doesn't haggle with providers the way private insurers do.

Fast forward two years later, and the government has identified hundreds of hospitals where Medicare patients are incurring especially high or low bills. Hospitals around McAllen, it turns out, aren't as terrible as they were made out to be, according to Medicare's calculations of how much it spent for the average patient from three days before admission to a month after discharge.

Look at Doctors Hospital at Renaissance, which was singled out in the influential New Yorker article by Atul Gawande that popularized the Dartmouth findings. The average patient from Doctors Hospital cost Medicare $18,708, 4 percent more than the national median per patient payment of $17,988.

Sure, treatment of patients at Doctors was more expensive than those at 2,555 hospitals in the nation. But the costs to Medicare were the same or less than those for patients at 790 hospitals. Medicare paid as much for the average patient at Doctors as it did for patients at MedStar Georgetown University Hospital in Washington, D.C., Florida Hospital in Orlando or Wyoming Medical Center in Casper.

Hospitals in other regions look much worse than McAllen, where the priciest hospital — South Texas Health System — cost Medicare 7 percent more than the median. In Las Vegas, patients at 14 of 16 hospitals cost Medicare 9 percent or more above the national median. Los Angeles has hospitals whose patients cost Medicare 30 percent or more above the national median.

The Medicare data can pinpoint differences between hospitals wherever they might be — across the country from one another or right next door. Los Angeles Community Hospital's patients cost Medicare $24,644, which is $7,000 more than it cost for Ronald Reagan UCLA Medical Center's patients. If Medicare's calculations are right, there may be a little bit of McAllen in a lot of places.

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