The average Medicare expense for hospital patients in Connecticut is the sixth highest in the nation, according to a recent review aimed at making health care more efficient.
While the national median per patient in the taxpayer-funded Medicare program was $17,988, the average spending per patient in Connecticut was $18,446 – the data provided by the Centers for Medicare and Medicaid Services and analyzed by Kaiser Health News show.
Of the state’s 31 hospitals, the Masonic Home and Hospital in Wallingford had the highest average – $20,326 per patient, 13 percent above the national median and 10.2 percent above the Connecticut average. Johnson Memorial Hospital in Stafford Springs was second, with an average of $19,607 per patient.
The Hebrew Home and Hospital in West Hartford had the lowest per-patient average, $16,369. That’s 9 percent below the national median and 11.3 percent below the state average. Second lowest was Sharon Hospital in Sharon, where average spending per patient was $17,269.
The Masonic Home said its hospital unit is very small and serves almost exclusively very elderly and highly compromised patients. Most are admitted from nursing homes and return to nursing homes when they leave, which could account for the higher average cost. The other hospital declined to comment for this story.
The data include all payments to doctors, hospitals or other facilities for services provided to patients during the three days before a hospital stay, during the stay and during the 30 days after discharge. The analysis covered claims from May 15, 2010 through Feb. 14, 2011.
Kaiser Health News, an editorially independent news service, computed the spending-per-patient averages and reported that Medicare believes the data will help it clamp down on excess medical care, which some researchers believe could account for up to a third of U.S. healthcare costs. Medicare is the nation’s largest insurer and its actions are bound to reverberate through the health care industry.
Michele Sharp, a spokeswoman with the Connecticut Hospital Association, said CHA is supportive of the concept of “value-based payments” that would change how hospitals are paid for their services. But she said CHA doesn’t have access to all of the data or the methodology Medicare used when computing the averages, and couldn’t comment on it.
Medicare payments can vary from hospital to hospital for many reasons, including the type of hospital, regional wages and salaries, the income mix and sickness of patients and the level of intensity with which patients are treated. Some hospitals may order more tests, have patients see more doctors or make higher use of intensive-care beds. Costs could also rise if subpar care extends a hospital stay or forces additional tests.
Those variables are attracting increased attention nationally and in Connecticut as the state moves toward health care reform and examines how hospitals are paid for their services.
C-HIT reported in December that Medicare reimbursements for surgical procedures varied widely among Connecticut hospitals, with John Dempsey Hospital receiving a higher rate than others. (To read that report click here.)
In Connecticut, as nationally, hospitals even a few miles apart can have wide variations in per-patient average Medicare payments, the Kaiser data show. In Connecticut, there was little correlation between average hospital payment and the size or location of the hospital.
The seven that fell below the national median were the Hebrew Home, Sharon Hospital, Charlotte Hungerford Hospital in Torrington, Griffin Hospital in Derby, Greenwich Hospital in Greenwich, the Hospital of Central Connecticut in New Britain and Yale-New Haven Hospital. The Hebrew Home has 45 beds while Yale-New Haven has more than 1,000.
Health care experts caution against correlating spending with quality of care, but say the data is an interesting if imperfect “first stab” at measuring efficiency because it will help researchers determine why it costs more to treat similar patients in some hospitals than others. Medicare proposes to link reimbursements to measures of efficient care starting in October 2014.
In Connecticut, where 16 percent of state residents are on Medicare compared to 15 percent nationally, the debate is likely to be as intense as anywhere.
At Lawrence & Memorial Hospital in New London, where average spending per patient was $18,348, putting it in the middle of the 31 Connecticut hospitals, Chief Financial Officer Lou Inzana said the data aren’t truly “cost of care,” but “payment for care,” since the reimbursements are based on a formula set up by the federal government.
The new system of “value-based payments” will instead reward or penalize hospitals that don’t perform well against certain quality initiatives and measures of patient satisfaction. Hospitals can earn back the withheld payments by improving their performance.
Maintaining high-quality, advanced care while also controlling costs and making an appropriate profit margin is, Inzana said, a delicate balance.
To view the Kaiser report and data click here.