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Day in Health
by Lisa Collier Cool
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Hospitals nearly triple their profits when they make surgical errors, compared to how much they make when patients dont suffer harm, according to a new study
published in the Journal of the American Medical Association (JAMA). On average, the hospitals studied reaped an extra $30,500 in profits when a patient developed one or more potentially preventable surgical complications because insurance plans pay more for longer stays and extra care, the study found. Some surgical mishaps boosted profits by up to $44,000 per patient, reported researchers from the Boston Consulting Group, Harvard, and Texas Health Resources, a large nonprofit hospital system. Its shocking, crazy and perverse that hospitals are being financially rewarded for harming patients, while the prize for hospitals that are working hard to improve patient safety and reduce surgical errors is losing money, says Barry Rosenberg, MD, a coauthor of the study and a partner in the Boston Consulting Group. The study, which analyzed 34,256 inpatient surgical procedures performed in 2010 at 12 hospitals run by Texas Health Resources, was the first to analyze the effects of surgical complications on hospital profit margins. An accompanying JAMA editorial states that the current fee-for-service payment system can tempt otherwise admirable people into dubious conduct, and the study findings should be an impetus for payment reform. The editorial also said it was "untoward" to have a payment system in which "hospitals in the United States can profit handsomely from postsurgical complications, even if the hospitals could avoid them." Get the Facts on Colorectal Surgery
Since then, despite more than a decade of effort to improve patient safety, medical errors and complications have actually gotten worse, affecting one in three hospitalized patientsa rate 10 times higher than previous estimates, reports a 2011 study published in Health Affairs. The researchers also found that current reporting methods miss 90 percent of serious adverse events. Eleven common medical mistakes resulted in 895,936 deaths in 2008, according to an analysis of published research by Carolyn Dean, MD, ND, author of Death By Modern Medicine: Seeking Safer Solutions. If medical error was a disease, it would be the leading cause of death in the US. Overall, an estimated 15 million Americans (out of 37 million who are admitted) suffer medical harm in hospitals annually, according to the Institute for Healthcare Improvement. Along with the human toll, hospital errors cost the healthcare system $17.1 billion a year, another recent study reported. 9 Alternatives to Knee Replacement Surgery
days when adverse events occurred. For flawless surgery, the hospital netted a median profit of $18,900, compared to a profit of $49,400 when the operation went awry. Complications doubled the profit if the patient was covered by Medicare, and tripled the profit if the patient had private insurance. The study used a measure of profit called the contribution margin and found that post-op problems connected with spinal, neurological, and heart surgeries boosted the hospital bottom line the most. If a patient has colon cancer surgery, Medicare pays a certain fee, but if the patient gets a post-operative infection that leads to pneumonia and has to be put on a ventilator for several days, the payment for ventilator care is higher and more profitable than the payment for the original surgery, says Dr. Rosenberg.
Medicare for its fatal care, he adds. How to Manage Postoperative Pain, Swelling, and Bruising
many patients are readmitted within 30 days or give the hospital poor marks on patient satisfaction surveys. However, says Dr. Rosenberg, payment reform is moving in baby steps, while patients continue to suffer medical harm. Theres no doubt that financial incentives can work: When Medicare announced several years ago that it wouldnt pay for care if patients developed central-line IV infections, the rates of those infections fell dramatically, so we need similar incentives that make safetynot mistakesprofitable.