In part because of McAllen’s bad reputation, based on studies by the Dartmouth Atlas, Congress ended up instructing Medicare to start rewarding hospitals that provide care efficiently — and taking money away from the places 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 like private insurers have to.
Fast forward two years later, and the government has identified hundreds of hospitals where Medicare patients are incurring especially high or low bills. Hospitals in the McAllen region, 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 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.
Doctors’ patients were more expensive than those at 2,555 hospitals in the nation. But their costs to Medicare were the same or less than patients at 790 other 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 and Wyoming Medical Center in Casper.
Hospitals in other regions look much worse than McAllen, where the priciest hospital in McAllen, 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 real potential value in Medicare’s data is that it pinpoints not just differences between geographic regions, but also among the hospitals in each area and hospitals from around the country that provide the same kinds of services. 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.