When Hospitals Botch Things, They Profit: Study

Preventable mistakes in surgery earn $30K more

(Newser) – Hospitals are literally profiting from their own mistakes. A new study of 12 hospitals found they made an average of $30,500 more when a patient had preventable surgical complications, because insurers pay for the longer stays and extra care that ensue, the New York Times reports. The researchers emphasize that they don't believe hospitals are deliberately screwing up to make money, but a system with an economic disincentive to make improvements is problematic. "We said, 'Whoa, we're working our tails off trying to lower complications, and the prize we're going to get is a reduction in profits,'" says one author of the study, published yesterday in the Journal of the American Medical Association.  

The study analyzed 34,256 people who had surgery at the hospitals in 2010. Of those, about 5% had preventable complications like blood clots and infections, and their median length of stay (two weeks) was four times longer than those without complications. The authors say insurers need to stop paying for preventable mistakes and offer bonuses for above-average care. Reforms are already under way, but "90% of the country is still functioning in the world we describe in the paper," another study author tells NPR. "It's just more evidence that payment reform is key to health care reform."

When Hospitals Botch Things, They Profit: Study

Preventable mistakes in surgery earn $30K more

 

http://www.newser.com/story/166367/when-hospitals-botch-things-they-profit-study.html

Study: Hospitals 'Profit Handsomely' From Surgical Errors

 Hospitals nearly triple their profits when they make surgical errors, compared to how much they make when patients don’t 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.

“It’s 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."

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Lethal Hospital Mistakes on the Rise

In 1999, the Institute of Medicine published a report saying that hospital errors killed nearly 100,000 Americans a year—a rate of lethal medical harm comparable to four jumbo jets crashing each week.

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 patients—a 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.

http://health.yahoo.net/experts/dayinhealth/study-hospitals-profit-handsomely-surgical-errors