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Medicare bills high at Los Angeles hospitals

Medicare spending on chronically ill Los Angeles County patients in the last two years of life is nearly double the national average. Such cost disparities figure in the push for healthcare overhaul.

September 20, 2009|Lisa Girion

Ampelio Garcia, 74, was barely able to walk when he got to White Memorial Medical Center in Boyle Heights, after the latest flare-up of a chronic lung condition that left him wheezing and gasping for air.

Emergency room physician Brian Johnston prescribed drugs and a breathing treatment to open Garcia's airways. Then he admitted him -- for the second time in less than a week.

"I can't send this guy home; there's no way," Johnston said. "And I don't think our treatment here is extreme or excessive. We're doing basic stuff."

Basic stuff adds up. And the tab is especially high for chronically ill patients seen at White Memorial. Medicare spends an average of $130,992 on patients seen there in their last two years of life, the biggest share of it on hospital care.

That's nearly three times the national average for similar patients, according to an influential study.

Why so much?

Some experts say high costs for patients at big-city hospitals such as White Memorial reflect a free-spending, out-of-control medical marketplace. Others say medical costs are higher in urban areas because the poor need more care and the rich demand it. Others say the profit motive is at play.

Still others say that when lives are at stake, cost should not be an issue.

Whatever the reason, the question itself has taken on added importance as the Obama administration pushes a massive expansion of medical care to the uninsured. In campaigning for a healthcare overhaul, President Obama has made repeated calls for changes that will help "Americans avoid the unnecessary hospital stays, treatments and tests that drive up costs."

Among the ideas before Congress are rewards for hospitals that reduce costly readmissions and for physicians who coordinate care to keep patients out of hospitals.

Studies show that the sickest 10% of patients consume two-thirds of the nation's healthcare outlay. So even small improvements could reap big savings.

In looking for answers, policymakers on different sides of the issue are turning to pathbreaking studies by the Dartmouth Atlas Project, a research institute at Dartmouth College. Some of the studies looked at what Medicare spends on chronically ill patients in their last two years of life, a time when medical costs are highest.

The national average for Medicare spending on such patients was $46,412, including outpatient care. But in Los Angeles County, the average cost was nearly double that, $84,179, according to a Los Angeles Times review of Dartmouth data.

In seeking to explain why, some researchers have concluded that doctors in areas such as Los Angeles, with more hospitals and other resources, are more likely to have patients admitted, order tests and schedule visits, largely because they can.

In fact, the researchers say, medical treatment often has more to do with resources -- available hospital beds, specialists and equipment -- than how sick patients really are. Where resources are abundant, studies show, physicians order more treatment.

Possible explanations for this range from physicians' desire to err on the side of caution to doctors ordering discretionary procedures or tests to inflate revenue.

Whatever the motivation for ordering treatment, the idea that such a course may be driven by the availability of resources is known as "supply-sensitive medicine."

"There's pretty good evidence that we simply overbuilt the acute-care sector, and we've done that more extensively in places like Los Angeles than we have elsewhere," said Dr. John Wennberg, founder of the Dartmouth atlas, which maps such variations. "Some places just have a lot more hospitals and a lot more doctors. They use them mostly for chronically ill patients, and it doesn't seem to have a beneficial impact on outcomes."


The poor get sicker

Doctors on the front lines bristle at the idea that they are doing too much for their patients.

"Our patients need more," said White Memorial's Johnston. "They are sicker."

And poorer.

White Memorial serves some of the poorest people in the state. The median household income of its Boyle Heights neighborhood is $33,000, a little more than half the statewide figure. Almost nine out of 10 of its patients lack private health insurance. Many don't have a regular doctor, hospital officials say. And even when they do, they have trouble getting to them.

As a result, they often get healthcare when they're very sick and in the most expensive settings: the emergency room and the hospital. And when they get to the hospital, they often are in bad shape, Johnston said. That means more admissions and higher costs.

Indeed, White Memorial patients in their last six months of life spend an average of 22 days in the hospital, according to Dartmouth Medicare claims data.

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