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.”
Healthy living doesn't happen at the doctor's office. The road to better health is paved with the small decisions we make every day. It's about the choices we make when we buy groceries, drive our cars and hang out with our kids. Join columnist Tara Parker-Pope as she sifts through medical research and expert opinions for practical advice to help readers take control of their health and live well every day. You can reach Ms. Parker-Pope at 
The easiest and most pleasurable way to eat well is to cook. Recipes for Health offers recipes with an eye towards empowering you to cook healthy meals every day. 
From 1 to 25 of 112 Comments
I understand the problem outlined, but as one who deals with this area daily, let me tell you that no one is intentionally causing “worse outcomes”. All this is amounts to is a way for Medicare to lower reimbursements to hospitals. Many are close to going out of business now. What will patient’s do when they have no hospital to go to?
Unfortunately infections happen, post op and otherwise. Yes, certain practices help to avoid infections, and believe me that all efforts are typically made to follow those practices. What do you do about the chronic patient who is incontinent, unable to ambulate (therefore at high risk of skin breakdown)? Urinary catheters in this situation help to avoid the decubitus ulcers, but with these new rules, when an infection occurs from chronic catherterization we now will lose money treating the inevitable.
Terrible rules—in the perfect world the above makes sense. Unfortunately, this world is definitely NOT perfect.
— Michael BryantCorrect approach for desired clinical outcomes.
— Kevin ShumThis is a totally bogus argument. I can’t think of one health care worker that I know that would want to have a person develop infections for the sake of collecting more money. That is basically what the article is alleging. All of this is tied to the same reasons why OB/GYN insurance is spiraling out of control, and why surgical and other “malpractice” lawsuits are so much more common today: people have unrealistic expectations. Without the help of hospitals and clinicians, people are infected all the time. Babies are stillborn, miscarriages happen. Unless there is true gross negligence, negative outcomes are just part of a numbers game. As much as people don’t want to realize it, every time they go to the hospital (or anywhere they go, for that matter) they run the possibility of being one of the people who suffer an adverse outcome as a result of treatment. That is part of life: nothing is perfect. Certain things can’t be avoided no matter how much we want them to.
The true problem is that people have this notion today that as long as you go to the hospital, everything will be fine and dandy. You will recover from that procedure without a urinary tract infection. Your baby (and everyone else’s) will be born perfect without any problem. If anything at all goes wrong, it MUST have been the doctor’s fault, because thing’s like that don’t just happen. The doctor must have screwed up. This is 100% WRONG. Without the physician and support staff, MORE things would probably go wrong. But no one wants to hear that, they just want someone that is safe to blame. What happens as a result? Tarnishing of a practice that already is being attacked from every side.
So, if you think that you can find a way to stop infections, go ahead. Otherwise, realize that they are a part of life, and someone has to pay for the medication and human work that goes into alleviating them.
— John-Robert La PortaAs someone who endured a post-surgical infection, I applaud these measures. I had a large bore IV inserted in a vein pre-surgery. At some point, the IV shifted, and the saline and medicine began to infiltrate my arm. In retrospect, the situation should have been obvious to any trained person who looked at my arm, which became quite swollen and red. I complained that the pain in my arm was severe–worse than the surgery pain. Hours passed, and still, no one replaced the IV. I wound up with a severe infection, requiring IV antibiotics at the ER a few days after surgery. Ultrasounds were necessary to track the progress of the infection in my vein. I can’t even imagine what it cost to treat and monitor this entirely iatrogenic infection. And, because I was sent to a different hospital than the one that performed the surgery, I doubt that this complication was ever tracked in their statistics.
— Abby‘Preventable’ is largely subjective in this situation. The idea may sound sensible but it’s only going to lead to more watchdogging (sic?), added expense, administrative costs, hard feelings among nurses, patients and staff. In short, a classic Medicare move.
— TerryAfter doctors and hospitals pay for mistakes, the next step will be to go after car mechanics. Neither one will ever happen.
— David StehleFinally we are addressing this problem! It is great that hospitals should be punished when there is subpar care (ie UTI from a cath)
But what happens when a UTI just happens from a cath? Not all are due to subpar care. Some are just because people’s immune systems are down in the hospital and they pick up bacteria that a healthy individual would not pick up. The issue should be penalizing when there is a problem, not a blanket statement for no reinbursement for any UTI.
— JPThe New Yorker recently ran a story on how the use of checklists greatly decreases infections and death rates in hospitals, but that it’s difficult to get hospitals to use them because they’re so non-tech, unsexy, and seem to insult surgeons’ ability. But perhaps Medicare and other health insurance companies should insist upon their use and only pay for procedures when they are used.
— edWill Aflack cover this type of issue?
So the patients now pays for the hospital’s mistake? And why in the world would a hospital employee voluntarily tell the patient that THEY made the mistake, and risk being sued? Instead, they would probably let the infection occur, then tell the patient that insurance doesnt’ cover this new problem, and the patient himself must pay. Patient doesn’t have money, sells his house to pay, and is ruined for life.
Makes me rething the “praying for recovery” method.
From TPP — well the patient or the insurance company pays for all the care a patient receives at the hospital, including care that is the direct result of a medical error.
— Kitwould agree wholeheartedly w/ M. Bryant. medicare is continually looking for ways to deny reimbursement. physicians and other healthcare professionals are human beings. mistakes, however unfortunate or unintended, happen. what other field of professional endeavor is held to such a high standard? lawyers? no. business types? no. on a tangent, i look forward to the day when the media is lamenting the lack of basic health care services due to the lack of adequate numbers of practitioners and health care institutions (both of which were veritably chased out by practices such as those outlined above). there is not one day when i do not ask myself: was it all worth the aggravation, financial cost and deferred gratification?
— DennisLMedical error is the 5th leading cause of death in this country, and that no doubt is an underestimation given that less than 50% of physicians report their own or their colleague’s errors, according to another recent NYT article. It is about time the cost of these errors came out of the pockets of the hospitals and physicians.
Every time this problem is brought up, a ready chorus of the medical establishment begins to sing, “the patients are already sick,” or “it’s unavoidable,” or “it’s unintentional”. Or worse, they threaten that if they are held accountable, malpractice insurance will force them to raise their already too high fees, and will also keep new doctors from entering the profession.
This is all utter nonsense and has more to do with the unearned exultations given to medicine and physicians than any empirical fact. It seems sometimes that doctors make more errors than mechanics, and are held less responsible. At least my mechanic tells me when he can’t fix what’s wrong so I can make informed decisions. Doctors rarely admit the limits of their knowledge or the futility of treatment, or their own mistakes.
Contrary to #1, it is not the chronic incontinent that is the problem here, it is that patients are often routinely catheterized because it is more convenient for the hospital to have the patient’s urine in a bag than having to help him to the bathroom or clean a bed pan. No one is talking about the chronic in this article. The people on the receiving end of these infections are more often in the hospital for very routine procedures that could have been performed without catheterization at all.
Catheterization has become a very invasive, risky, and expensive substitute for bed pans and causes a great deal of unnecessary suffering and sometimes death. Hospitals are rewarded for choosing this inferior standard of care.
Further, the notion that hospitals “do everything possible” to reduce errors and infections is also nonsense. They might spend millions of dollars to put in fancy systems or hold trainings, but the simple fact is that a great many infections are spread because health care workers, and doctors in particular, don’t pay their patients the most common of courtesies and WASH THEIR HANDS between consultations. According to one study reported in the NYT, only 9% of physicians washed between patients. Disgusting.
So, yes, properly penalize hospitals and practitioners for their errors for I don’t believe rewarding incompetence with my tax and insurance dollars can ever improve health care.
— SamanthaSounds right - but laws need to be passed to protect patients - I can see hospitals insisting that the patient then has to pay, even including it as a disclosure document that the patient is forced to sign as a condition of receiving treatment.
This policy is criminal unless it protects the patient.
— Annei think a better way would be to introduce financial incentives for quality care, not financial penalties for bad outcomes that may or may not be caused by substandard care.
— Chet MorrisonAt least this gives me further ammunition in my attempts to get foley catheters out of my patients ASAP.
But I think we are kidding ourselves if we think this ‘innovation’ will lead to improved care. It won’t. The hospitals will make up the missed charges somehow, and people will still continue on their own ways of practicing
In the specific area of surgical site infections, it bears telling that not every one of these infections is caused by some kind of “medical error” on the part of a doctor or nurse. The desired outcome, of course, is zero infections after the 40 plus million surgical operations performed every year in the USA. That is an impossibility because the current state of the art in infection prevention does NOT allow us to get zero infections for many kinds of operations. In other words, plenty of surgical site infections occur despite the exact, provable application of every known infection-prevention method. It is mandatory that we not conflate the concepts of “medical error” and “bad outcome”. Very, very important point to keep in mind as we move into the future. I hope this message reaches the folks at CMS.
— James T. Lee, MD,PhDIf I can recall any earlier article correctly about a Hopkins professor, sounds as though they need a checklist.
— trsMichael Bryant (#1) says that no one is intentionally causing “worse outcomes.” That is most likely true. The problem is not intentionally harming people, a criminal activity that even the most cynical of would have trouble believing was going on, but a lack of financial incentive to avoid harming people. That is what the new policy seeks to provide.
— Peter MadisonIf the overnight courier delivers your package to the wrong address, they don’t get to charge you again to deliver it to the right place. Hospitals’ customers should not have to pay them to fix avoidable mistakes.
No one is is intentionally causing “worse outcomes” but cutting staff and service to maximize profits does result in the lack of attention and poor documentation that does cause them.
— KennyBoyMy wife had vascular surgery at a reputable Denver hospital, there was an incident that could have cost her her leg had not an astute recovery room RN caught it. Of course we and our insurance were charged for the additional surgery as if it were part of the plan all along.
And most of the doctors making in hospital decisions about your care now work for the hospital (look up “hospitalists”), and you can bet your health that they will be aware of anything that limits the hudreds of millions of dollars that come out of our community (from just that one hospital)to enrich people like Bill Frist.
As Mike Bryant points out, many of the ‘things’ that happen to patients, especially seriously ill patients, are non-intentional; no hospital would intentionally harm a patient. But circumstances arise which either are unforeseen or are acknowledged risks. The former include hospital-acquired infections (many of which can be prevented, but some not ), urinary tract infections (many of which can not be prevented because of the need for adequate hygeine), decubitus ulcers in frail, elderly patients, and intravenous catheter-related phlebitis. The list goes on and on! Accidents happen, too, especially among weak, disoriented and/or debilitated people. Risk of fracture from falls is omnipresent, and all too often not the fault of nursing care or hospital policy.
Don’t kill the care taker. Penalizing hospitals for unintentional co-morbid diagnoses only compounds what is now becoming an epidemic of its own. People aren’t machines, and neither are hospitals. Holding them responsible for occurrences which are often out of their control, or which carry risks of their own is unfair. With more money being squeezed from the system and insurance carriers, HMO’s and government watchdog agencies cutting reimbursements by denying days of care to feduciaries like hospitals it is the very community which is served which is injured the most,
Don’t kill the goose that lays the golden egg! Who decides that a complication is preventible? Letting the payor do this job is a conflict of interest.
— Bruce ChodoshI have to Agree with Poster 1.
Sure, in cases of gross negligence the hospital must bear the price.
But cases such as nosocomial (hospital-acquired) infection will always occur due to the nature of a hospital: A concentration of very sick human beings. Doctors are already being sued for all sorts of nonsense that are out of their control. Lets not add to the list.
— alexisThe problem with this approach is that it treats all complications as preventable. Undoubtedly a lot of them are preventable but a better approach would be to have a set of criteria, based on valid research, that, if fulfilled, would show that a hospital or health care provider had done everything they could to prevent this complication and it happened anyway.
A patient may get a post operative infection (or UTI or vascular access cath infection or bedsore) despite everything being done “correctly”.
The decision for reimbursement should not be based on the occurance of a complication, it should be based on whether or not a standard of care in complication prevention was practiced.
— Todd LucasThe idea sounds wonderful- esp to those who don’t work in hospital settings- why should Medicare pay for mistakes?
No one in a hospital is trying to intentionally cause infections or bedsores. We should try to prevent these things from happening, but as long as humans are involved, they will continue to happen.
What people don’t realize is that when these mistakes happen, they call in other doctors to take care of the complication. Should these physicians NOT be reimbursed for taking care of a complication that they had no part of?
This is the same logic as trying to prevent house fires by no longer paying firemen to put them out.
— P PazminoUnfortunately there are quite of few instances of perverse financial incentives. Take for example the owner of an insured racehorse who needs a lot of cash now. In that case the horse is worth more dead than alive. So what happens? Dead horse.
— LouisSamantha (comment #11) has it just about right. The excuses and whining about how all of this is not on purpose & not much can be done is debunked by the recent Annals of Medicine article by Dr. Atul Gawande that is reprinted in the Dec 10 New Yorker (referred to by ed in comment #8). It’s a must read. Something can be done and should be done. Medicine is too important to continue to be allowed to stumble as it has all too often.
— DaveFrom TPP — Here is the article from Dr. Gawande’s website. It’s called The Checklist. He’s one of my favorite writers. Cick HERE to read it. (And then come back to the blog.)
I agree with the policy. I also agree that it is not a perfect world There are occasions that misdiagnosis and treatment resulting from that cause problems and increase hospital charges.
— R.SoundarThe academia will not support the decision to protect the unscrupulous. Reduction of medical school admissions to avoid competition in health care was supported by the Federal Government.
The solution is to create free market competition in health care by increasing the immigration of foreign medical graduates.
I know that patient access( for learning ) during medical student days is difficult due to legal constraints.
Research by Drug companies also is at fault because of compliance issues and all patients are not the same metabolically and clinically.
In order to protect patients, we need laws that protect nurses: In particular, we need legislation that sets safe nurse-to-patient staffing ratios and also laws that ban the foolhardy practice of mandatory overtime (hospitals requiring nurses to work dangerously long hours).
With the staff downsizing of the 1990s and the shortage of the early 21st century, inadequate nurse staffing is becoming an increasing concern for both nurses and the public.
The article cited here is one of many warning of the danger. Several research studies have found a strong connection between low nurse staffing and higher rates of patient complications such as infections, cardiac arrest, and gastrointestinal bleeding. A landmark study published in the New England Journal of Medicine determined that patient mortality was significantly related to nurse staffing levels.
The New York State Nurses Association is a strong advocate for safe nurse staffing. Our members have negotiated groundbreaking contracts with specific nurse-to-patient ratios. We continue to lobby for state legislation establishing staffing standards in hospitals and nursing homes.
http://www.nysna.org/practice/positions/position13_a.htm
Joely Johnson
— Joely Johnson, assistant director of communications, New York State Nurses AssociationAssistant director of communications
New York State Nurses Association