Nation's 10 Least Expensive Medicare Markets

Lower-cost hospitals often provide better care, according to Dartmouth health analysis.

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The nation's most expensive Medicare markets were highlighted in an earlier article. Today, you'll be introduced to the cheapest markets. Now, cheap doesn't necessarily mean the care is poor. Just the opposite. According to the Dartmouth Institute for Health Policy and Clinical Practice, which generated this information, low-cost medical markets may actually be good for your health. To better understand why this might be the case, it's helpful to think of the cost of medical care as having three components:

1. Price. What are the prices charged by hospitals, doctors and providers of drugs and other medical equipment and services? 2. Supply. How much medical care does a patient, on average, receive in various markets? Dartmouth identified "high supply" areas -- places with numbers of hospital beds, doctors and high-end diagnostic equipment that were high in relation to the supply of patients. In these markets, patients tended to receive excess care. That is, they were provided a level of care that was not related to their medical needs as much as it was with making sure that area hospital beds were full, doctors were booked up with medical appointments and those slick machines were humming to capacity providing scans and other tests. That's a good system for using resources efficiently in a factory. It's not necessarily so good in health care. Dartmouth created the Hospital Care Intensity (HCI) index to measure the per-patient provision of health care around the country.

3. Outcomes. When it studied the relationship between the amount of health care received by comparable patients and the resulting health of those patients, Dartmouth found that the healthiest patients were not the ones receiving the most care. In fact, it was the hospitals providing lower amounts of care that seemed to do better by patients. The reasons, Dartmouth surmised, are that Medicare patients who are hospitalized may encounter additional medical problems, such as infections, simply because they're in a hospital. So, less hospital time may be both cheaper and healthier. Likewise, patients who had more doctor's visits for an illness -- particularly patients who saw lots of specialists -- often fared worse because their doctors didn't do a good job of making sure their care did not conflict with the care provisions the patients were following from other doctors they were seeing for different medical problems.

Now, there is no absolute here. It's a sure thing that the hospitals and doctors in some markets that provide lots of care do a great job by their patients. And there likely are other markets where patients receive relatively low levels of care and are the worse for it. But, on average, the Dartmouth numbers are a wake-up call to consumers thinking about where they will receive the best care and what it will cost. Consumers can find out the HCI and expenses of hospitals in their area by using Dartmouth's Hospital Care Intensity Index tool. Click on your state, then your area and, finally, on the individual hospitals in your area. Select the hospitals of interest and you can generate reports with detailed information on how they cared for chronically ill Medicare patients. Dartmouth says this is its most useful tool to help consumers make important medical choices.

Here are three valid ways of building a list of the 10 least expensive sites for Medicare-covered services. The lists are of hospitals but reflect not only their care but also the decisions and services of the doctors who practice there and the other professionals and services whose work is provided to patients in the hospitals. Dartmouth assembled the data by looking at detailed care provided in the last two years of life to chronically ill Medicare patients who died from their illnesses between 2001 and 2005. The patients suffered from one or more of nine chronic illnesses that ultimately take the lives of 90 percent of all Medicare recipients. The diseases are: congestive heart failure, chronic lung disease, cancer, coronary artery disease, renal failure, peripheral vascular disease, diabetes, chronic liver disease, and dementia. To be included, at least 400 deaths from these illnesses had to have occurred at the hospital; nearly a third of the nation's 4,275 hospitals were excluded for that reason.

Dartmouth notes that today's fees for these services would be higher than they were when the study was made. However, it says the volume of care has not change much in recent years so a hospital's HCI can be a good measure of its relative cost of care today.

The 10 hospitals with the lowest out-of-pocket Medicare co-pays per patient for hospital and physician services (the highest co-pay at a hospital was $6,937):

Doctors Hospital of Springfield, Springfield, MO ($1,169)
Vernon Memorial Healthcare, Viroqua, WI ($1,193)
Greater Regional Medical Center, Creston, IA ($1,204)
Sartori Memorial Hospital, Cedar Falls, IA ($1,238)
Lakeview Hospital, Stillwater, MN ($1,242)
Tri-County Hospital, Wadena, MN ($1,296)
Crawford Memorial Hospital, Robinson, IL ($1,349)
Albert Lea Medical Center, Albert Lea, MN ($1,352)
John H. Stroger Jr. Hospital, Chicago, IL ($1,370)
Bellevue Hospital Center, New York, NY ($1,380)

The 10 hospitals with the lowest overall Medicare spending per chronically ill patient in the last two years of life (the highest Medicare spending at a hospital was $130,992):

Boone County Hospital, Boone, IA ($29,401)
Crawford Memorial Hospital, Robinson, IL ($29,419)
Riverside Medical Center, Waupaca, WI ($29,763)
Greater Regional Medical Center, Creston, IA ($30,034)
Chenango Memorial Hospital, Norwich, NY ($30,520)
Cobb Memorial Hospital, Royston, GA ($30,449)
Brookings Health System, Brookings, SD ($30,600)
Vernon Memorial Healthcare, Viroqua, WI ($30,619)
William Newton Hospital, Winfield, KS ($31,161)
Mercy Hospital, Iowa City. IA ($31,229)

The 10 hospitals with the lowest volume of care, as measured by their HCIs (the U.S. average is 1.00; the nation's highest HCI was 3.54):

Vernon Memorial Healthcare, Viroqua, WI (0.38)
Riverside Medical Center, Waupaca, WI (0.40)
Samaritan North Lincoln Hospital, Lincoln City, OR (0.41)
Samaritan Pacific Community Hospital, Newport, OR (0.42)
Madison Memorial Hospital, Rexburg, ID (0.43)
Lakeview Hospital, Stillwater, MN (0.43)
Fairchild Medical Center, Yreka, CA (0.44)
Three Rivers Community Hospital, Grants Pass, OR (0.44)
Gerber Memorial Health Services, Fremont, MI (0.45)
American Fork Hospital, American Fork, UT (0.45)