Rural-urban disparites in Medicare spending influence health care reform

A front-page story in today's New York Times discusses differences in Medicare costs between rural and urban hospitals. It offers this discussion in relation to health care reform, in part because fiscally conservative "blue dog Democrats" have argued "that Medicare should reduce payments to areas where costs grow fastest and increase payments to those who are best at controlling them."

And guess where costs are most under control? In many places that are, by at least some measures, "rural." Here's an excerpt from Anemona Hartecollis's story:

The issue pits hospitals in more rural states like Iowa and Minnesota, where spending tends to be lower, against those in areas like New York and Los Angeles, and revolves around a question that has bedeviled the medical establishment for decades: How much money do hospitals need to provide adequate care for patients, especially poor people who have not had regular access to health care.

Urban hospitals, however, "argue that some of the most efficient hospitals are in affluent and rural areas that do not face the same challenges, including higher poverty and cost of living, as New York." Of course, this is not entirely true, since poverty rates in rural areas are often higher than those in urban areas, and many rural dwellers face health care crises due to lack of preventive care.

An administrative physician at Cedars-Sinai in LA argued that rural places are atypical and outside the cost norm when he wrote to the Senate Finance Committee this spring: “The vast majority of the U.S. population does not live in places that resemble Rochester, Minnesota” — the home of the often-praised Mayo Clinic — “rural north-central Pennsylvania, or Utah.”

The NYT story discusses the Dartmouth Atlas of Health Care, which shows "striking regional differences in the intensity and cost of health care." In a Davenport, Iowa, hospital, for example, Medicare spending is about $40K/patient during the last two years of a patient's life. Compare that to a New York City hospital, Langone Medical Center, where the cost is about $105K/patient during those last two years of life.

Don't miss the cool graphic that accompanies the story--a map showing in darker ink the areas where Medicare costs are highest, in part b/c treatment is so "intense," meaning, for example, more days in the hospital. Contrary to the trend suggested in the story, intensity of care is very high in the Mississippi Delta region, which is very rural.

Interestingly, the NYT reports that the eight house Democrats who negotiated the compromise on the house version of the health care bill were "evenly split among rural and urban areas." It would be interesting to know how the reporter defined "rural" and "urban" for purposes of that observation. I am guessing that the writer considered all of Iowa, for example, to be "rural."