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Medicare Study Shows Costs Lowest In Alaska, Highest In Nevada

Medicare Study Shows Costs Lowest In Alaska, Highest In Nevada
5/19/2012 1:10 PM ET

A new national study of Medicare costs shows Alaska with the lowest health care expenses of any state in the nation, although coming changes to how those costs are calculated may dethrone the state.

Alaska spends just $15,550 per Medicare patient, per visit, the study says, far below the national median of $17,988, as measured from May 2010 to February 2011. The runner-up was New Mexico, with an average of $15,680. The study is based on federal Medicare data and was conducted by Kaiser Health News.

The state with the highest average of Medicare costs was Nevada. The Silver State had a cost of $19,075 per patient, per visit, or well above the national average.

Hospitals across the country have been trying harder in recent years to curb their Medicare costs, especially in states with relatively low reimbursement costs from the federal program.

As part of the 2010 health care reform law, the system is beginning to shift from a fee-for-service to a value-based program starting in October 2014, forcing hospitals to examine their efficiency and value.

Some analyses have said Medicare has hundreds of billions in wasteful health care spending, which opens the program up to critics who want to cut funding. Such waste comes in the form of multiple hospital visits, excessive tests being ordered, or visits to multiple providers.

Sen. Tom Harkin, D-Iowa, chairman of the Senate Health, Education, Labor and Pensions Committee, pointed to the 2010 health care reform law championed by the Obama administration.

Harkin said the law, known as the Affordable Care Act, will duplicate Iowa's Medicare rules on a national basis.

Iowa is ninth-best in cost efficiency, according to the study, thanks in part to a pre-emptive move towards focusing on value instead of quantity.

"We are moving from paying on the basis of quantity to quality, something that some of us here have been fighting for for years," Harkin told RTT News.

He added, "(Iowa) stands to benefit even greater from the implementation of the act than other states. That's why repealing the health care law would hurt Iowa. It would take us back to where low-quality and high-cost states get the most money."

In more urban states, Medicare factored in the many different types of hospitals that treat patients, from rural clinics to large-sized academic medical centers.

New York City, for example, has long complained that their tradition of handling generally sicker and lower-income patients has caused them to receive lower federal reimbursements.

Overall, the study showed that Medicare paid at least 5 percent above the national median to care for about one in five hospitals. Costs at about one in three other hospitals across the country were at least 5 percent below the national median.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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