Iowa ranks high for low hospital costs

A new national study of Medicare costs has told Cedar Rapids hospital administrators Ted Townsend and Tim Charles something they already know - Iowa is ahead of the curve.

Townsend, CEO of St. Luke's Hospital, and Charles, CEO of Mercy Medical Center, say they aren't surprised by a study that shows Iowa's cost of providing health care to Medicare patients is ninth-best in the nation in cost-efficiency. Out of 34 hospitals surveyed in the state, not a single one was at or above the national median.

Cedar Rapids' two hospitals helped with those results. St. Luke's came in at $16,549, or 16th best in the state, while Mercy Medical was at $16,729, or 23rd best.

Townsend said the study simply validates a long tradition in Iowa of providing high-value health care.

“Individual hospital data is a little bit susceptible to normal variations in terms of where we are in the state - it kind of moves around a little bit,” he told The Gazette. “But in general, what this picture tells me is that we're all grouped pretty tightly together and in a pretty good spot.”

Charles also cited Iowa's positive health care history. But he added that Mercy has also worked hard to establish a strong primary care network to help patients find a good fit for their medical needs. The hospital is also in the process of creating a partnership with University of Iowa Health Care to boost accountability and quality even further, he said.

“That allows us to better manage their care, and our resources, by creating less redundancy and waste,” Charles said. “The patient benefits from better care coordination. As we look to the future we see the medical home concept evolving into population health management wherein we become even more accountable for quality outcomes and managing costs.”

According to the study, the national median was $17,988 for a hospital visit for a Medicare patient, as measured from May 2010 to February 2011. In Iowa, the median average was $16,427, with the lowest costs at Broadlawns Medical Center in Des Moines, Keokuk Area Hospital in Keokuk and Mercy Hospital in Iowa City. All three of those came in with a median average of $15,110. The study is based on federal Medicare data and was conducted by Kaiser Health News.

Townsend said while there are many reasons for the study results, he cited Iowa's federal Medicare reimbursements, which have historically been lower than other states and which has meant hospitals tend to be leaner. In 2009, a study began to shift Medicare from a fee-for-service system to a value-based system in the state – a change lauded by hospitals and legislators.

Townsend said that change isn't likely to have contributed to the actual study results, however, since the study was conducted between May 2010 and February 2011 - not long enough for the 2009 changes to have much effect.

Sen. Tom Harkin, D-Iowa, chairman of the Senate Health, Education, Labor and Pensions Committee in Washington, 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 starting in October 2014.

“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 said. “(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.”

Like Townsend and Charles, Scott McIntyre, communications director for the Iowa Hospital Association, a Des Moines-based lobbying and advocacy group that represents Iowa's hospitals, said the study fits in with Iowa's general traditions of providing the right care at the right place at the right time.

“That sounds a little simple, but that's really what it comes down to - not wasting patients' time or quality of life with unnecessary tests or meeting with unnecessary providers,” McIntyre said. “Iowa's medical practice culture has traditionally been centered around primary care providers, and that has allowed us to be a little ahead of the curve."

Kaiser News chart:

State

State Rank

Efficiency Index

Avg. Hosp. Spending Per Patient

Number of Hospitals Measured

Alaska

50

0.86

$15,550

9

Alabama

21

0.98

$17,547

95

Arkansas

19

0.98

$17,640

45

Arizona

40

0.94

$16,923

62

California

17

0.98

$17,668

306

Colorado

27

0.96

$17,316

45

Connecticut

6

1.03

$18,446

31

District of Columbia

16

0.99

$17,731

7

Delaware

10

1.02

$18,276

5

Florida

3

1.06

$19,046

164

Georgia

32

0.95

$17,079

108

Hawaii

48

0.88

$15,765

14

Iowa

42

0.91

$16,427

34

Idaho

33

0.95

$17,076

14

Illinois

14

1

$17,939

128

Indiana

13

1.01

$18,192

89

Kansas

36

0.94

$16,971

55

Kentucky

24

0.97

$17,437

65

Louisiana

5

1.03

$18,579

91

Massachusetts

4

1.03

$18,587

61

Maine

29

0.96

$17,251

21

Michican

28

0.96

$17,316

98

Minnesota

44

0.91

$16,379

52

Missouri

31

0.96

$17,214

76

Mississippi

25

0.97

$17,392

64

Montana

47

0.88

$15,778

14

North Carolina

35

0.95

$17,018

87

North Dakota

45

0.9

$16,241

7

Nebraska

23

0.97

$17,516

24

New Hampshire

8

1.02

$18,334

13

New Jersey

2

1.06

$19,056

64

New Mexico

49

0.87

$15,680

36

Nevada

1

1.06

$19,075

24

New York

39

0.94

$16,946

163

Ohio

12

1.01

$18,210

134

Oklahoma

41

0.93

$16,786

91

Oregon

46

0.9

$16,124

33

Pennsylvania

11

1.01

$18,239

152

Rhode Island

9

1.02

$18,331

11

South Carolina

22

0.97

$17,520

55

South Dakota

43

0.91

$16,405

20

Tennessee

15

0.99

$17,880

97

Texas

7

1.03

$18,445

315

Utah

18

0.98

$17,657

31

Virginia

34

0.95

$17,053

75

Vermont

20

0.98

$17,628

6

Washington

37

0.94

$16,970

47

Wisconsin

38

0.94

$16,970

65

West Virginia

30

0.96

$17,245

31

Wyoming

26

0.97

$17,358

12A