Hospitals profit when surgeries go wrong, study finds

Apr 18 2013

The study, which was published Tuesday in The Journal of the American Medical Association, found that hospitals earned 330 percent higher profit margins on surgeries with one or more complications, because private insurers pay them for longer stays and extra care.

The New York Times: Hospitals Profit From Surgical Errors, Study Finds
Hospitals make money from their own mistakes because insurers pay them for the longer stays and extra care that patients need to treat surgical complications that could have been prevented, a new study finds (Grady, 4/16).

The Wall Street Journal: Treatment Woes Can Bolster Hospitals' Profit
Hospitals have faced pressure for years to make visits to their wards safer. But their investments in everything from hand-washing campaigns to infection-fighting robots have done little to curb the thousands of yearly injuries and deaths caused by avoidable medical complications (Weaver, 4/16).

Politico: Study: Hospitals Profit When Surgeries Go Awry
Perverse financial incentives offered by private insurers and Medicare actually pad hospitals' profits when surgeries go awry, according to the study. Hospitals earned 330 percent higher profit margins on surgeries with one or more complications when they were paid for by private insurers, according to the study (Cheney, 4/17).

Reuters: Reducing Complications May Cost Hospitals Money
U.S. hospitals may have a financial incentive not to implement strategies and techniques that are known to reduce surgery-related complications, according to a new study.The findings do not mean that "any hospital out there is saying, 'we can make more money if we have more complications,'" said Dr. Atul Gawande, the study's senior author from Brigham and Women's Hospital and the Harvard School of Public Health in Boston (Seaman, 4/16).

Modern Healthcare: Hospital Profits Higher With Patient Complications: Study
Hospitals earn higher profit margins when their patients experience surgical complications, according to a study in the Journal of the American Medical Association. The authors claim the study is the first to quantify how complications impact a hospital's bottom line and illustrate the challenge of pushing hospitals to improve outcomes when the current system still rewards more care over better care. After looking at more than 34,000 inpatient surgical procedures, the study authors found that profit margins were 330% higher when privately insured patients suffered at least one complication. Among Medicare patients, profit margins were 190% higher (Kutscher, 4/16).

The Hill: Study: Hospital Profits Soar When Surgeries Go Wrong
Hospitals profit heavily from their own mistakes, according to a study published Tuesday in the Journal of the American Medical Association. Hospitals make roughly $30,000 more from patients who suffer at least one complication than they do from patients whose procedures go smoothly, the research found (Baker, 4/16).

CNN Money: Hospital Finances Are Broken. How To Fix Them
American health care is screwed up. It is a bizarre market where the prices that patients pay do not match the quality of care. Unfortunately, that's old news. What is new is the nitty gritty -- details about why hospitals might not have any financial incentive to follow best practices. A new paper from researchers affiliated with Harvard, Boston Consulting Group and nonprofit health care delivery system Texas Health Resources suggests that, in some cases, providing worse care pays off for hospitals. On a hopeful note, some companies are stepping in to challenge the system. The research group published a paper in the Journal of the American Medical Association on April 16 that looked at more than 34,000 surgical patients who were discharged from 12 hospitals in 2010 (DuBois, 4/17).

In other news related to quality -

Reuters: Patient-Centered Care Linked To Better Outcomes
Patients tend to do better when their doctors pay attention to their individual needs and circumstances, according to a new study…[Dr. Saul] Weiner, a physician and health services researcher at Jesse Brown VA Medical Center and the University of Illinois at Chicago, said doctors are often focused on meeting recommended guidelines, such as prescribing certain medications for a condition like high blood pressure (Seaman, 4/16).