NEWS2U Health & Wellness
Living Healthy in an Unhealthy World

Wednesday, December 19, 2007

Making Hospitals Pay for Their Mistakes

by Tara Parker-Pope

In most businesses, customers don’t pay for a vendor’s mistakes. But when hospitals make errors, they charge patients additional money to fix the problem.

The perverse economics of hospital charges were outlined yesterday in a fascinating article in the Journal of the American Medical Association. The story focused on one common but largely preventable medical error: urinary tract infections associated with the use of a catheter. It showed how in some ways, the medical system has built-in financial incentives for bad care.
Hospitals use urinary catheters more than almost any other medical device, and they account for 40 percent of all hospital-acquired infections — about one million annually. A urinary tract infection can add a day to a hospital stay; sometimes it can lead to a more serious infection, even death.

At one Colorado hospital, the article noted, Medicare would pay $5,436.66 for the care of a heart attack patient who recovered without complications. But if the patient developed a urinary tract infection related to use of a catheter, the hospital would receive $6,721.44. If the patient developed a more serious infection after a catheter was used, the hospital collected $8,905.43. That means the hospital would earn 63 percent more by providing inferior care.

Hospital-acquired urinary tract infections cost the health care system more than $400 million every year. But they are largely preventable, occurring most often because a catheter is left in too long. The risk of infection rises dramatically 48 hours after insertion. Most patients don’t need a catheter for nearly that long, but when nurses and other hospital staff are overstretched, or when record-keeping is lax, catheters may not be removed quickly enough.

The reimbursement system “tolerates and even financially rewards poor performance by hospitals that fail to prevent hospital-acquired complications,'’ write the report’s authors, Dr. Heidi Wald and Dr. Andrew Kramer, health care policy researchers at the University of Colorado at Denver.

In an effort to hold hospitals accountable for the costs associated with eight largely preventable injuries, Medicare changed its rules this fall. Now, the agency will not pay additional amounts to hospitals when doctors leave an object in a patient during surgery, use incompatible blood or introduce an air embolism while treating a patient.

Medicare also will no longer reimburse hospitals for infections that develop due to the use of vascular catheters, or for pressure ulcers, surgical site infections after coronary bypass surgery and other hospital-acquired injuries, such as fractures or burns that occur due to lax care. Some private insurers are considering adopting similar rules.

Some of the administrative changes relating to the new rules take effect in January, and they won’t apply to patient discharges until October. Patients may worry that hospitals will not have as much financial incentive to provide decent care, but hospitals are required by law to provide adequate care to patients. And because the rules are administrative in nature, many doctors making treatment decisions for patients in the hospital won’t necessarily know whether the care is to be reimbursed by the agency. The goal of the new rules is to force hospitals to adopt strict guidelines that will prevent the mistakes from happening altogether.

“All too often, clinicians, hospitals, and payers conclude that some harms are part of the price of doing business. But in many cases they are not,'’ write Dr. Wald and Dr. Kramer. “When properly designed, financial incentives should provide rewards for desired clinical outcomes, not hospital-acquired harms.