Managed Care

How managed care affects hospitalization

As managed care's share of a metropolitan market grows, hospitalization costs are more tightly controlled and hospital lengths of stay come down. That's what common sense suggests, and that's what a recent study bears out. But there are anomalies. In Milwaukee and Miami, for example, higher-than-average hospital costs coexist with fairly heavy managed care penetration. The maps below show how 20 of the nation's largest metropolitan areas fared in the study, which drew on a data base of 11.7 million patients discharged from 3,700 acute care hospitals.

Hospital costs by metropolitan area, vs. national average

ATLANTA -2.41
BALTIMORE +0.38
BOSTON -6.45
CHICAGO +6.34
CLEVELAND +1.02
DALLAS +3.94
DETROIT -2.66
HOUSTON +32.82
LOS ANGELES -16.15
MIAMI +10.47
MILWAUKEE +13.60
MINNEAPOLIS-ST. PAUL -3.61
NEW YORK -9.28
PHILADELPHIA +0.23
PITTSBURGH +2.67
ST. LOUIS +7.49
SAN DIEGO -10.00
SAN FRANCISCO -32.24
SEATTLE -18.46
WASHINGTON +6.21

Hospital lengths of stay by metropolitan area, vs. national average

ATLANTA -7.70
BALTIMORE -2.77
BOSTON -2.41
CHICAGO -3.76
CLEVELAND -5.70
DALLAS -14.13
DETROIT +4.65
HOUSTON +2.14
LOS ANGELES -17.81
MIAMI -2.81
MILWAUKEE -0.54
MINNEAPOLIS-ST. PAUL -18.92
NEW YORK +50.07
PHILADELPHIA +11.50
PITTSBURGH +3.69
ST. LOUIS -5.06
SAN DIEGO -26.07
SAN FRANCISCO -20.32
SEATTLE -25.54
WASHINGTON +8.92

Percentages are adjusted for severity differences.

SOURCE: KPMG PEAT MARWICK LLP, COSTA MESA, CALIF. (CALL 800-243-1397 FOR A COPY OF THE STUDY'S EXECUTIVE SUMMARY.)

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