I recently read an article on a study from The Journal of the American Medical Association concluding that hospitals make more money by administering poor care. This shocked me. The study analyzed the per incidence contribution margin relative to cases in which patients suffered from surgical errors. As a result of these complications, patients needed additional treatment and additional time in the hospital. Rather than draining hospital resources, the study indicated that hospitals actually profited from these mistakes. In fact, when complications occur, insurance ends up paying hospitals more than they would have originally needed to.
Profits were not even across the board. Hospitals profited the least from patients who paid out of pocket and most from private insurers, with Medicare and Medicaid falling in the middle. You can check out the full study here.
While troubling, this phenomenon does not seem to be intentional. Conductors of the study cautioned that hospitals certainly weren’t encouraging mistakes. Furthermore, doctors certainly aren’t making deliberate mistakes, as their pay is not affected. However, it’s clear that profiting from mistakes certainly diminishes the incentive to eliminate them.
Researchers also suggested a remedy. They recommend changing the insurance payment model to refuse payment for faulty care and instead reward hospitals with top-notch care with bonuses. But with so many insurance providers, health care centers, and possible complications, a fix like this could be a long time in the making.
In the meantime, everyone seems to suffer except for the hospital. Everyone. Patients’ health is at risk from sub-standard procedures. Insurance companies pay more due to others’ mistakes. Even doctors’ records are tarnished with mistakes due to poor hospital practices.
While profiting from mistakes sounds awful, it’s only one of a myriad of other faults with hospitals and large health care centers. Genuine attention to quality care and concern for the bottom line are competing interests. One usually comes at the cost of the other. And all to often, it’s care that is sacrificed.
I believe nurses have the answers to the problems in health care. How can we improve our health care delivery system while being cost conscious?
