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Government Tracking Hospitals to Crack Down on High Error Rates

HospitalHallway-300x173.jpgThe federal government is tracking data to crack down on hospitals that consistently commit high rates of avoidable or preventable errors in patient care. The government is relying on patient data collected by Medicare. The purpose of the program is to reduce "hospital-acquired conditions."

This new program was instituted as part of the healthcare reform enacted under the Affordable Care Act. As of 2013, Medicare penalized 1,231 hospitals and reduced Medicare payments for another 1,451 for each Medicare patient treated.

The Judgment Criteria

Medicare judges hospitals on a series of criteria. First, the rating system is curved. Hospitals are judged based on the performance of other hospitals. Therefore the more a particular hospital improves, the more it pulled up the "curve" which puts pressure on other hospitals to improve. Medicare assesses around two-dozen different criterion.

25 percent of a hospital's score is derived from the death rates. Mortality rates are calculated in the hospital or within a month of discharge. Medicare explicitly considers the rate of death for patients admitted for pneumonia, heart failure, or heart attacks.

Next, 30 percent of a hospital's score is derived from patient satisfaction surveys. Patients are asked to rate how well they were treated. For example, whether or not the doctor and nurses adequately communicated each step of the process and were available to answer questions.

Finally, the remaining 45 percent of a hospital's score is calculated from clinical care. Clinical care covers three primary topics.

First, Medicare reviews the frequency of central-line bloodstream infections. The central-lines are used to pump fluid or medicine directly into a patient's veins. The invasive nature of these devices is such that infections are incredibly dangerous therefore hospital staff must follow strict disinfectant procedures to protect patients.

Second, Medicare reviews infection rates for tubes inserted into bladders to remove urine, which often result in severe infections that endanger patient's lives. Even the slightest failure to observe proper handling techniques could cause a dangerous or deadly infection.

Finally, Medicare examines the rates of a compilation of eight serious complications that occurred in hospitals including:

  • Surgical cuts, tear and reopened wounds;
  • Collapsed lungs; and
  • Broken hips.

Medicare also assessed how well a particular hospital improved over the previous two years.

Medicare used this information to rate hospitals on a scale of one to ten. Medicare determined that scores of seven and above "excessive" and assessed penalties against the offending hospitals.

Criticism of the Program

Some hospitals argue that this measurement system unfairly penalizes hospitals that serve disadvantaged areas or that provide high-risk procedures. For example, specialty hospitals owned and run by doctors that only offer a few services scored exceptionally well under measurement regime.

Conversely, some hospitals argue that they are unfairly penalized due to their location, budget, and the people they serve. Hospitals in disadvantaged areas are inherently underfunded and overworked. Therefore, when Medicare cuts their funding, it is only succeeding in pushing their standards of care even lower.

Hospital Performance

The review system rewards hospitals that do well and punishes hospitals that do poorly. For example, some hospitals in Wisconsin, Utah, North Carolina, New Hampshire, Nebraska, Massachusetts, and Maine are doing very well. 60 percent of hospitals in those states are receiving a bonus. Conversely, two-thirds of hospitals in 17 states, including California, Nevada, New York, Washington, Wyoming, and others are receiving reduced reimbursements.

Moreover, it appears that many previous winners continue to receive bonuses. Similarly, poorly performing hospitals continue in their poor performance. These numbers indicate that the "curved" grading system seems to reinforce prior held advantages.

Effect of the Program

Hospitals are about evenly split on whether or not the dual approach of punishment and shame will change hospital practice. Some argue the data allows hospitals to compare performance with their competitors. Before this system, a hospital may operate under the mistaken belief that it was doing well, when in fact, it was not.

The penalties are based on the amounts paid for each Medicare patients. The penalty can range from around 0.05 percent to a maximum of two percent. These amounts are minor compared to the full operating budget of the hospital. However, they do serve a significant role in reminding hospitals to improve their practices. The purpose of the program is to encourage improvements, not saddle struggling hospitals with additional problems.

It is unclear what effect if any; these results will impact on potential lawsuits against poorly performing hospitals. A standard element in any medical malpractice or tort case is to prove that the injury was reasonably foreseeable. There are an infinite number of ways to establish this element. However, many people rely on "notice." Notice is when the defendant is aware that there is a problem and fails to act. These reports may serve as notice for certain high-risk hospitals.

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