By Rebecca Ruiz
Spending is far above average in these markets.
There are 3.7 hospital beds
per 1,000 Miami-Dade County residents compared to a national
average of 2.7. There are 47 medical specialists per 100,000
residents, just above the national average of 45. The metro area is
also at the forefront of cutting-edge technology. Miami-Dade County
has two Gamma Knives, a non-invasive neurosurgical radiation tool
that costs as much as $5 million. By 2012, the Miami area will be
home to at least one $150 million proton beam, also used for
radiation treatments.
In Pictures: Most Expensive Places For Health
Care
What Miami patients may fail to realize, however, is that their
care is the most expensive in the country. The cost of treating the
average Medicare patient was $16,351 in 2006, the last year for
which data was available. That's twice the national average.
(Medicare data provide the most uniform and publicly available
source of health care spending and often mirrors trends in the
private sector.)
Worse yet, the extra
spending doesn't yield better health outcomes. The same is true
in markets across the country, including Los Angeles, Dallas, and
Newark, N.J., where it costs $10,810, $10,103 and $10,467,
respectively, to treat a Medicare patient.
The conundrum, highlighted
earlier this year when the Dartmouth Institute for Health Policy
and Clinical Practice released its analysis of Medicare data, is a
focus of this summer's health-reform debate. While it's
estimated that Americans spent $2.4 trillion on health care last
year and spending is expected to comprise 48% of the GDP by 2050,
there is scant evidence to show that rising costs have led to
improved health.
The reasons for this are
many, says Dr. David Goodman, a professor of pediatrics and of
community and family medicine at the Dartmouth Institute, which
studies the health care system and publishes its analysis of
spending variations in the Dartmouth Atlas.
Explaining the
Variations
Steven G. Ullmann,
director of programs in health sector management and policy at the
University of Miami School of Business Administration, says that
one need look no further than the price of a brain MRI to know that
something is awry in Miami. The fee can range from $400 to $4,000
depending on the facility. While one might expect more consistent
prices in a market like Miami--where there are plenty of health
care professionals and services--the extreme variation shows how
the standard rules of competition often don't work in the
health care sector.
"It's a reflection
of a marketplace that is not working terribly well," Ullmann
says.
While Ullmann agrees that
the proliferation of services and professionals in the Miami area
has led to increased spending, he also says that costs are driven
by fears of medical malpractice and the high number of uninsured
patients, both of which add to the bottom line.
Between 2000 and 2004,
Florida insurance companies reported closing more than 8,500
medical malpractice claims against any health care provider, the
highest among states with comprehensive databases. An estimated
one-quarter of Miami-Dade County residents are uninsured.
Though Miami-Dade's
share of residents 65 and older accounts for 14% of the population,
that doesn't explain why it topped the institute's list. An
annual report by the actuarial and consulting firm Milliman found
that Miami had the highest level of private sector medical spending
among 14 major metro areas studied. According to the firm's
analysis, it costs $20,282 for a family of four covered by an
employer-sponsored preferred provider organization (PPO) compared
to a national average of $16,771.
J. Darren Rodgers,
president of Blue Cross and Blue Shield of Texas, can sympathize
with the market dysfunction in Miami.
Three Texas
cities--McAllen, Harlingen and Corpus Christi--rank in the top 10
of the Dartmouth Atlas data. Treating a Medicare patient in each of
these places costs more than $10,000. According to BCBS data, which
draws on 4.3 million members, Dallas and Houston rank as the most
expensive metro areas, 15% higher than Austin and San Antonio and
20% higher than El Paso.
Eliminating the variations
in cost, Rodgers says, would challenge Texas'
"Lone-Rangerish" mentality when it comes to providing
health services. The state does not require certificate of need to
open a new hospital or other health care facility. These minimal
regulations have given way to 58 physician-owned facilities across
the state, and another seven are scheduled to open in the next
year.
Increased supply in the
industry at-large, Rodgers says, could be tamed by reforming the
payment system. One alternative includes rewarding physicians with
a bonus when their patients have excellent outcomes. Blue Cross and
Blue Shield of Texas has shifted 25% of its non-hospital physicians
to this payment structure in the past three years and plans to
increase that share to 30% by the end of the year. Rodgers says the
program has paid $2 million in bonuses and saved the company more
than $8 million.
Some hospital systems
don't collect fees for each service provided to a patient, but
instead pay their physicians a standard salary. This model has
worked successfully at the Mayo Clinic and Cleveland Clinic, and
has been shown to deter overuse of services, such as unnecessary
imaging, laboratory testing and consultations.
Containing cost in the
state, says Rodgers, will also require addressing very basic issues
like how to provide insurance to the 25% of residents who are
uninsured and how to treat the high number of Texans who are obese
and have chronic diseases like diabetes and heart disease.
Those worried about the
high cost of health care in Miami or elsewhere in the country
should pay close attention to what Congress decides, says Miami
University professor Steven G. Ullmann.
"What goes on
nationally," he says, "will definitely impact what goes
on locally."
In Pictures: Most Expensive Places For
Health Care
More From ForbesWoman
Eight Ways To Cut Your Health Care
Costs
Five Ways Managing Health Care Will Become
Easier
What To Do When Your Health Care Is
Cut
Most expensive places for health care
user
- Let’s talk: Comment (5) | Blog
- Email to a Friend
- Print this Page
From the Community…
-
Posted by Mon Aug 17, 2009 2:37pm PDT
Report AbuseHmm... it's interesting at what is making the costs of health care fluctuate... I would like to see more of what is causing this... we already knew that malpractice suits where just one of the factors... I didn't think about the salaries based on services, that would be something that could be eliminated or deterred to help lower costs, especially if it's already proving to do so.
-
Posted by Mon Aug 17, 2009 4:40pm PDT
Report AbuseWhen big business interfered with health care in the 80's via HMOs that started the problems we have today. Business men running medicine. Now with proposed "reform" politicians will run health care.Like jumping out of the frying pan into the fire.
-
Posted by Mon Aug 17, 2009 6:17pm PDT
Report AbuseLucky it's not only the HMO's but when the state and federal governments started to mandate that every routine thing (outside of catastrophic illnesses and injuries) be covered as well.
-
Posted by Tue Aug 18, 2009 8:53am PDT
Report AbuseDept. of Veteran's Affairs is for vets only. How does the cost of health care for our country's vets figure into the cost of general health care for the country as a whole???
Cut backs in veterans' medical care should be considered shameful. And shame on you for putting VA in the cross-fire.
-
Posted by Wed Aug 19, 2009 3:44pm PDT
Report Abuseover-utilization, pharmaceuticals, administrative costs, etc. too little education and prevention are emphasized in this country. doctors make poor judgment calls. i was working in the ER and a 10 year old boy came in with vomiting and diarrhea. the mom told the doctor that the family had just gotten over the same virus (gee, then why even bring your kid in to spread the germs?!). so, the doctor ordered a CAT scan and a ton of blood work. for real! i was floored. of course, everything turned out normal. the kid was diagnosed with a virus, told to drink plenty of fluids, and to come back if it got worse. what a waste. this happens all the time. people are too impatient. they are lead to believe that every ache/pain or illness is going to turn deadly. sheesh. wait it out, self-treat at home, and let your body heal itself. it can and will do that if you give it a chance. people need to be educated on what a real emergency is and what it is not.
leave your comment
You must sign in to post a comment