Hospitals operating solo in regions where Medicare spends the most per person could face financial stress under efforts to reform the nation's healthcare system, Moody's Investors Services said in a newly released report. Moody's assigns credit ratings, a measure of financial and operating strength, to 50 hospitals and health systems in the nation's 17 costliest regions, as ranked by Medicare spending per person in 2006, the report said, citing research by the Dartmouth Atlas of Healthcare and the Robert Wood Johnson Foundation. Spending varies across regions, but Moody's noted those ranked as most expensive included mostly urban and densely developed communities and providers there could be targets for reform efforts, as written in the report.
“Attempts to minimize variation in healthcare costs among regions is almost certainly going to involve cuts to Medicare reimbursement to high-cost providers,” according to the report. Stand-alone hospitals without the resources of a system, dependent on referrals and unable to attract insured patients, will be most likely to struggle. The five most-expensive regions—which are defined as geographic areas in which patients are referred to the same hospitals for major cardiovascular surgery and neurosurgery—are Miami; McAllen, Texas; the New York City boroughs of the Bronx and Manhattan; and Harlingen, Texas.