The dilemma: Should hospitals be paid for errors?

Imagine taking your car to the shop for new brake pads, and getting it back with a dent on the door, or a broken transmission. It would be bad enough to have the damage done in the first place, but how would you feel if the shop made you pay to repair it?
Well, the federal government feels that way about paying to treat infections that patients acquire while hospitalized – not to mention bedsores, injuries caused by patients being dropped or otherwise mishandled, and other types of harm done by hospitals.
Historically, the Centers for Medicare & Medicaid Services (CMS) has paid hospitals at least a little for the cost of making things right for the patients. But in 2005, Congress passed a law calling for an end to that practice.
Last month, CMS unveiled new payment rules that begin to do that, focusing on problems that are either very common, very costly, or both; currently do result in extra payments; and are believed to be reasonably preventable by following “evidence-based” medical guidelines.
The rules, which become effective Oct. 1, 2008, were greeted with enthusiasm by consumer groups and with concern by hospital leaders, who feared they would be penalized for things that aren’t always their fault, or at least aren’t within their control.
On Sept. 6, as part of a series called “The Dialog on Healthcare Quality Improvement,” sponsored by Quality Partners of Rhode Island and Providence Business News, health care leaders gathered at the Greater Providence Chamber of Commerce to discuss the fairness and feasibility of the new CMS rules, and their long-term implications for the industry.
Dale Bratzler, medical director of the Oklahoma Foundation for Medical Quality, started by explaining the new rules, noting that they are limited to eight “never events,” or problems that CMS believes should never occur if health care is being provided properly.
The list includes leaving objects in during surgery, for example, and giving patients the wrong blood type – say, B-negative for a person with A-positive blood. Broken bones, fractures, dislocations, intracranial injuries and burns acquired in the hospital are also “never events.”
But at this point, CMS isn’t refusing to pay for treatment of ventilator-associated pneumonia, or for hospital-acquired staph infections, though it’s considering adding both to the list. And if a hospital notes that a patient had bedsores upon admission, for example, CMS will still pay.
H. John Keimig, CEO of Quality Partners, said the policy change reflects CMS’ migration “from passive payer to active purchaser” of health care, and a broader effort at the federal level to demand “value-driven” care that makes the best use of available resources.
Rhode Island, which has been working on health care quality improvements for years, with hospitals, consultants and government collaborating to share best practices, is in a particularly good position to deal with this trend, Keimig added, and to show others the way.
But Kenneth Belcher, president and CEO of Roger Williams Medical Center, which is heavily involved in that work, said that while patient safety and quality are “paramount” to his and other hospitals, the institutions’ financial margins are already so tight that these new rules could cause them real problems.
Moreover, Belcher said, there might be unintended consequences: Hospitals concerned about losing payments for treatment of infections present on admission might start running more tests on patients than they did before, delaying treatment and racking up more costs.
(Similar arguments have been made for years by advocates for medical malpractice reform, who say a fear of being blamed for bad outcomes leads doctors to overtest, overprescribe, etc.)
Bratlzer, however, countered that the extra pay now provided by CMS is actually so limited that it rarely covers the cost of correcting the problems covered by the rules. Thus, he suggested, it might make more sense for hospitals to channel their energy elsewhere.
“If you prevent most of these problems,” he said, “it’s probably a good business strategy.”
Jim Conway, senior vice president of the Institute for Healthcare Improvement, in Cambridge, Mass., which is leading a high-profile voluntary quality improvement effort known as the 5 Million Lives Campaign, echoed that sentiment.
People across the United States know that hospitals provide “extraordinary care and caring,” he said, and that “extraordinary advances” in medicine are saving lives in record numbers – most children now survive cancer, for example, while just years ago, they rarely did.
“So people get this,” Conway said, “but what they also get is they’ve had it with the suffering, harm, tragedy, waste and inefficiency. There is a national cry that’s going out saying, enough. And frankly, they’re saying to the health care industry, if you guys can’t figure it out, we will. Because we have to accelerate this change.” •