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New Medicare Rule May Improve Patient Safety

Safety incidents for Medicare patients resulted in a shocking 238,337 potentially preventable deaths and cost Medicare $8.8 billion from 2004 to 2006, according to HealthGrades fifth annual Patient Safety in American Hospitals Study [pdf]. But improvements may be on the way. Starting in October, Medicare will stop reimbursing hospitals for procedures in which inexcusable errors are made.

The HealthGrades Study measured the incidence of 16 patient safety indicators among Medicare patients at virtually all of the nation’s nearly 5,000 nonfederal hospitals. The patient safety indicators used had been developed by the U.S. Department of Health and Human Services’ Agency for Healthcare Research and Quality (AHRQ).

In 1999, the Institute of Medicine estimated that as many as 98,000 people die every year and countless others suffer injuries because of medical errors. At that time, IOM believed that it was a reasonable goal to cut medical error-related deaths and injuries by 50 percent over the next five years. While the HealthGrades study reported some progress in reducing overall death rates among Medicare patients that experienced one or more patient safety incidents (-5 percent), some indicators showed an increase. The incidence of bed sores; post-op respiratory failure; post-op pulmonary embolism or deep vein thrombosis (clot); post-op sepsis (infection); and post-op abdominal wound separation/splitting actually increased when compared to 2004. Unfortunately, as the HealthGrades study demonstrates, progress in reducing the toll of medical errors has been uneven at best.

Since 1999, patient safety advocates have struggled to find ways (mostly voluntary) to encourage hospitals and doctors to invest in improving patient safety. This “encouragement” to reduce errors has failed. The new measures will directly affect hospitals’ economic bottom lines.

From its beginning, the Medicare program has generally paid for care under fee-for-service payment systems, without regard to quality, outcomes, or overall costs. Impatient with the lack of progress in reducing common, preventable medical conditions, Congress in 2005 instructed the Secretary of Health and Human Resources to take a new direction. Starting in October 2008, Medicare will stop reimbursing hospitals for eight hospital-acquired medical conditions, including several studied by HealthGrades. The eight hospital-acquired conditions that will not be reimbursed are:

  1. Object left in during surgery;
  2. Air Embolism;
  3. Blood incompatibility;
  4. Catheter Associated Urinary Tract Infection;
  5. Pressure Ulcers (bed sores);
  6. Vascular Catheter Associated Infection;
  7. Surgical Site Infection-Mediastinitis after Coronary Artery Bypass Graft Surgery; and
  8. Falls and Trauma-Fractures, Dislocation, Intracranial Injuries, Crushing Injuries and Burns.

When the Medicare initiative was first announced, some feared that hospitals might attempt to pass the charge on to patients for costs that Medicare refused to pay. However, the final rule forbids hospitals from billing patients for any charge associated with the hospital-acquired complication. Hospitals will be expected to absorb the extra cost themselves.

Using bed sores as one example, it is clear that the cost implications for hospitals are significant.  HealthGrades identified a total of 455,305 bed sore incidents during the period 2004 through 2006, resulting in associated mortality of 47,147 with an estimated excess cost of $2.4 billion. From a purely economic point of view it would seem that hospitals would have a strong incentive to reduce the incidence of bed sores simply to prevent losses of as much as $2.4 billion.

Although Medicare initially selected only eight conditions for the program beginning in October, HHS is considering three additional conditions for FY2009 rulemaking:

  1. Ventilator Associated Pneumonia;
  2. Staphylococcus Aureus Septicemia; and
  3. Deep Vein Thrombosis/Pulmonary Embolism.

Other conditions that, according to HHS, may be added in the future but require further study are:

  1. Methicillin Resistant Staphylococcus Aureus (MRSA);
  2. Clostridium Difficile-Associated Disease; and
  3. Wrong Surgery.

As Medicare is a leader among health insurers, it is believed that private health insurance carriers may follow their example. Once hospital boards realize that these costs can no longer be passed on to the patients, taxpayers or their insurers, they may see the light and actually take effective steps to eliminate some of these recurring problems. That is something we will be watching with great interest.

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