Few Financial Incentives For Hospitals To Reduce Complications: Study

A new study suggests that hospitals may actually be making a profit after patients suffer complications caused by doctors botching medical procedures.  

The study, posted in the Journal of the American Medical Association (JAMA) last week by researchers from Harvard and Brigham and Women’s Hospital, found that complications following medical procedures increased costs and the hospitals are often reimbursed, thus boosting their bottom line.

According to the research, medical complications occurred in three to 17 percent of medical procedures at 12 hospitals in the southern United States, which treated more than 34,000 patients in 2010. The additional medical costs associated with those mistakes netted the hospitals an average of about $11,500 per patient, on top of what they would have gotten paid for if the treatment had not resulted in complications.

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“Depending on payer mix, many hospitals have the potential for adverse near-term financial consequences for decreasing postsurgical complications,” the researchers concluded.

The authors say they do not believe hospitals deliberately cause complications or hesitate to take preventative measures. However, the study calls for insurance companies to stop paying hospitals when they make a mistake and indicate that outstanding health care service should be rewarded with bonuses. Researchers also called on hospitals to share their complication rates with patients, which would lead to market pressure for all hospitals to improve care.

Currently, insurance companies use a list of what are known as “never events,” things which should never happen in a medical setting, to determine when hospitals should not be paid for complications. Never events include things like leaving surgical instruments in patients and operating on the wrong location or wrong patient.

The findings fly in the face of some claims made by tort reform advocates, which suggest that the fear of medical malpractice lawsuits lead hospitals to take unnecessary preventative care, increasing health care costs. The study found the opposite to be true, that health care costs actually increased when hospitals did not act to prevent complications.


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