What’s the Incentive? Treating Medical Errors Result in Higher Profits

Hospitals and healthcare settings should be held accountable for surgical or medical mistakes. This accountability is the ticket to motivating healthcare providers in charge of the health and lives of patients to implement procedures and protocols to reduce malpractice.

However, data from a new study shows just the opposite-some hospitals have no incentive to change their policies and reduce medical errors from occurring because they actually profit from these complications.

The interesting findings of the study

The study was conducted by several entities including the Boston Consulting Group, Harvard School of Medicine and Public Health, and Texas Health Resources and was recently published in the Journal of the American Medical Association.

The study examined over 34,000 medical records of patients who underwent surgery in 2010 at one of 12 hospitals administered by Texas Health Resources, a nonprofit hospital system.

Out of the total number of patients who underwent surgery, over 1800 experienced at least one preventable medical error or complication such as blood clots, pneumonia and infected surgical incisions. Based on the data, these patients required additional hospital stays.

As a result, the average hospital bill for just one patient who experienced medical malpractice was approximately $49,400. (The average cost for patients who underwent surgery without complications was $18,900.)

According to study researchers, medical errors increased profits and provide very little incentive for hospitals to make changes and reduce medical errors. The authors do not suggest that these entities are deliberately causing complications to increase their bottom lines. They simply point out the reasons why hospitals do not take proactive measures to perform better, particularly when these performance enhancements end up costing money.

A spokeswoman for America’s Health Insurance Plans says that the current health care system needs drastic modification. We need to diverge from “the perverse incentive of the old fee-for-services system that emphasized quantity over quality, and toward methods of payment that reward better care,” she says.

Current incentives to reduce medical errors

Dr. Robert M. Wachter, study researcher and expert in medical errors indicates that measures have in fact been done to increase incentives for hospitals to reduce these errors.

For instance, Medicare no longer reimburses costs for services attributed to medical complications and even reduces the amount of reimbursement for hospitals that have high readmittance rates or receive poor satisfaction survey ratings. Unfortunately, Medicare rarely refuses to reimburse hospitals for avoidable medical errors.

Wachter says, however, that more is definitely needed. Until a concrete plan is in place to provide incentives for all hospitals to choose quality instead of quantity, it’s likely medical errors will continue.

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