Cost of adverse events borne by provider
Cost of adverse events borne by provider
New report issued by AHRQ
Improving patient safety can have a direct effect on the bottom line, according to a new report from the Agency for Healthcare Research and Quality (AHRQ). The analysis reveals that though Medicare pays hospitals a substantial amount of money for adverse events that occur during hospitalization, providers are left holding the bag for even more.
The study found that Medicare paid an additional $300 million per year, or 0.3% of annual Medicare hospital spending, for five types of adverse events in hospitals in 2003.1 However, these extra payments covered less than one-third of the additional costs that hospitals incurred in treating these adverse events.
Under Medicare's hospital payment system, hospitals are reimbursed a set amount for a patient's condition or diagnosis-related group (DRG), determined at admission. The study by AHRQ researcher Chunliu Zhan, MD, PhD, found the DRG changed only in a small number of cases. For example, the DRG changed in 1% of cases in which a patient had postoperative bloodstream infections, and it changed in 10% of cases for patients who experienced postoperative bleeding. Even if the DRG doesn't change, adverse events may result in additional costs, for example if the patient needs to spend more time in the hospital, Zhan says.
The study estimates that Medicare extra payments under the hospital prospective payment system (PPS) range from about $700 per case of decubitus ulcer to $9,000 per case of postoperative sepsis in the five types of adverse events identifiable in Medicare claims.
Zhan says, "We conclude that both Medicare and hospitals gain financially by improving patient safety."
Reference
1. Zhan C, Friedman B, Mosso A, et al. Medicare payment for selected adverse events: Building the business case for investing in patient safety. Health Affairs 2006; 25:1,386-1,392.
Improving patient safety can have a direct effect on the bottom line, according to a new report from the Agency for Healthcare Research and Quality (AHRQ).Subscribe Now for Access
You have reached your article limit for the month. We hope you found our articles both enjoyable and insightful. For information on new subscriptions, product trials, alternative billing arrangements or group and site discounts please call 800-688-2421. We look forward to having you as a long-term member of the Relias Media community.