Overall patient safety in hospitals is not improving. The latest HealthGrades report on patient safety in U.S. hospitals showed the PSI (AHRQ's patient safety index) rate increased 8% between 2003 and 2005 (more here). The lack of significant progress with patient safety has caused some to ask why payors reimburse hospitals for the additional care necessary after a patient suffers a preventable adverse event. It seems payors are starting to ask themselves this very question - according to this Indianapolis Star story:

Late next year Medicare plans to stop paying hospitals for costs incurred from some of the most common and preventable medical errors suffered by patients.[...]

The federal Centers for Medicare and Medicaid Services, which operates Medicare, is taking public comment on the proposal through June. The changes are scheduled to take effect in October 2008.

Medical mistakes are deadly and expensive. Infections acquired in hospitals account for about 90,000 deaths and $4.5 billion in extra spending each year, according to the U.S. Centers for Disease Control and Prevention.

Presently there are no financial penalties for hospitals when preventable misadventures occur. The hospital simply recodes the diagnosis and receives reimbursement for the additional length of stay and treatment required to treat the adverse event. It is true that hospitals have an incentive to avoid preventable adverse events; reduced length of stay can translate into higher utilization, increasing revenue. Unfortunately, most hospital administrators are more focused on cost reduction than revenue growth, and (if recent reports on patient safety "improvements" are to be believed) the stick - reduced reimbursement - will probably offer an incentive than the carrot.

The idea of not paying for mistakes probably started back in 2002 when the National Quality Forum sought to standardize adverse event reporting with their report, Serious Reportable Events in Healthcare (Word document). This report included their list of 27 things that should never happen. CMS is starting with a subset of the list. Here are the 13 "never should happen" adverse events that CMS is considering for no reimbursement:

  1. Catheter-associated urinary tract infections
  2. Bed sores
  3. Objects left in after surgery
  4. Air embolism, or bubbles, in bloodstream from injection
  5. Patients given incompatible blood type
  6. Bloodstream staph infection
  7. Ventilator-associated pneumonia
  8. Vascular-catheter-associated infection
  9. Clostridium difficile-associated disease (gastrointestinal infections)
  10. Drug-resistant staph infection
  11. Surgical site infections
  12. Wrong surgery
  13. Falls

Starting to withold payment for adverse events will impact the health care industry as much as DRGs and capitation did years ago. Many "old school" hospital administration management techniques will fall from favor because doing things like increasing nurse to patient ratios have been repeatedly shown to result in more adverse events. This change will also eliminate the need to regulate nurse to patient ratios, like they have in California and a few other states - hospitals that operate at unsafe ratios this will go out of business (as they should).

Every hospital wants to make improvements that are easy and cost next to nothing. One of the frustrations of being a consultant is doing the needs assessment, the cost justification, and the implementation plan only to hear that, "that's really too much trouble - we don't want to do it." Of course it's even worse if you're employed by the hospital (or vendor) as part of a LEAN team or innovation workgroup.

I'll be watching for the fall out from this new trend - if you come across something, be sure to let me know! Pictured right is an example of an engineering feasibility project with great patient safety potential - interoperability between a Baxter infusion pump and Philips patient monitor. This was shot at the 2005 AACN/NTI meeting - interoperability of this type has yet to make it to the market in a commercially released product.

UPDATE: Here's the CMS notice titled, "Proposed Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 2008 Rates" that was published in the Federal Register on May 3, 2007. Do an Edit-Find (or Cntrl-F) and use the phrase "hospital-acquired conditions" to find the part that pertains to the 13 adverse events that CMS will not reimburse starting in 2008.

UPDATE: Welcome WEDI listserv! Should providers be reimbursed for preventable adverse events? How soon will commercial payers follow suit? Will this change provider behavior and improve safety? Hit the comments link and share your opinion.

[Hat tip: FierceHealthIT]

UPDATE: Read a subsequent post on this topic here.