Springfield hospitals beat average Medicare costs

McAllen, Texas, is taking a beating for its Medicare expenditures.

The city of 130,000 was the focus of a June 1 article in The New Yorker magazine documenting the nation's Medicare expenditures - specifically, how some cities, such as McAllen, receive much more reimbursement from Medicare per patient than other areas. That's despite the fact that care in those places is no better - and in many cases, is worse - than the national average.

Springfield-area health officials have used the New Yorker article as an opportunity to point to the fact that Springfield's health systems have above-average efficiency, while offering care that exceeds the norm in most cases.

Low costs ...

The numbers for Springfield tell the story.

According to the Dartmouth Institute for Health Policy & Clinical Practice, which compiles Medicare data for regions nationwide, Springfield as a whole receives $6,667 in reimbursement per Medicare patient.

That number is below the state average of roughly $7,700 and the nearly $15,000 per patient sent to McAllen. Springfield even comes in below the $7,224 sent to Rochester, Minn., home of the Mayo Clinic and used as an example of the funding discrepancy in the New Yorker article.

"The difference (between McAllen and Rochester) is that McAllen has a lot of independent providers, while Mayo is an integrated system," said Steve Edwards, executive vice president and chief operating officer for CoxHealth. "We think the advantage we have in Springfield, with Cox and St John's, is that integrated approach."

The issue that seems to determine reimbursement is the number of procedures done per Medicare patient - the more procedures, the higher the reimbursement level.

But most of the health systems in Springfield are working in various ways to reduce unnecessary costs.

"Our primary care delivery system has been improved by adding components of coordinated care, such as our Nurse on Call phone line and data sharing among providers," said St. John's spokeswoman Cora Scott.

She also noted the health system's continued implementation of electronic health records, which allow physicians and nurses in any part of the system to instantly see updated health records, including current medications and test results.

"The EHR has (given us) the ability to ... prevent duplicative tests across the system in both the physician offices and the hospital and other points of care, to save money," she said, adding that the system also encourages use of generic drugs when appropriate, further reducing costs.

Cox officials said their system also integrates care, beginning as early as the ambulance ride to the emergency room.

"There are heart cases where we've had enough alert from an ambulance where the cardiologist knows about the case and sees the patient before the ER physician does," said Dr. Dan Sontheimer, Cox vice president of medical affairs. "In that case, you avoid that physician's charge."

While it's not a nonprofit integrated health system, Ozarks Community Hospital also has contributed to the lower costs.

In a white paper written this month on health care reform, CEO Paul Taylor said OCH's focus on primary care for Medicare patients - who OCH mostly serves - keeps costs down for everyone.

"A well-trained general practitioner situated in a health care environment that is patient-centered ... is more likely to make referral decisions based on the needs of the patient instead of the economic needs of the system," Taylor wrote in the paper, which is shared with industry peers.

... And high quality

While keeping Medicare costs low is important, all Springfield hospitals agreed that cost can't be allowed to override the importance of quality care - and Edwards said it doesn't have to.

"I firmly believe that with lower costs, you actually have higher quality," he said.

He used the example of a patient who comes in on a Friday afternoon and is referred for testing. Some for-profit hospitals would recommend scheduling the test on Monday to fit into normal business hours or with other similar testing. Edwards, however, said delayed diagnosis often leads to higher treatment costs due to complication risks.

"We've been effective in working with our physicians to invest in that test on a Friday afternoon or Saturday morning," he said. "We know that better care, in the long run, often relates to lower costs, because readmission rates go down and length of stay decreases."

He pointed out that McAllen came in below the national average on 23 of the 25 metrics Medicare uses to rate care, while Springfield is above average on 23 of 25.

Another factor in the local success are physician incentives. Most of the hospitals in McAllen are for-profit entities that reward doctors for patient quantity. Both St. John's and Cox, however, said their doctors receive incentive for quality care.

"Part of our physicians' compensation is tied to not only patient satisfaction but also quality outcomes," Scott said.

As one way to work on balancing quality and cost, St. John's participates in Medicare's Physician Group Practice demonstration project, a program still in the testing stages that reimburses doctors not just for the number of services provided but also for patient outcome and satisfaction. That program, she said, helps doctors catch conditions earlier, saving on both money and care.

In fact, in its second full year participating in the study, Scott said St. John's reduced Medicare expenditures by more than $5 million while achieving quality performance benchmarks in all 27 categories studied.

"Our participation in the Medicare PGP has further enhanced our tracking of quality but also improved care and access," she said.[[In-content Ad]]