When the Centers for Medicare and Medicaid in August announced it wouldn’t pay for hospital mistakes and infections, I expected discussion and debate.
Today’s issue of The New England Journal of Medicine delivered as promised. In it, Meredith Rosenthal, an associate professor of health economics and policy at the Harvard School of Public Health, provided a good, balanced overview of the change’s likely effects.
The rule change, she noted, implemented a congressionally mandated change in hospital reimbursement. It makes the agency’s payment policies “far less passive” than they once were. She further pointed out an interesting — albeit perverse — phenomenon: Hospitals that have improved patient safety and addressed problems such as “nosocomial” (hospital-acquired) infections have seen their Medicare revenues reduced. This she attributed to quirks in the payment system.
I don’t want to go into specifics, and I imagine you’d prefer I don’t.
“The new rule will result in hospitals seeing substantial reductions in payment for the care of individual patients with preventable complications,” Rosenthal wrote. She predicted, however, that the change wouldn’t substantially affect total payments to hospitals because they would be reduced only when the preventable complications were the only factors causing an illness to be reclassified under a more expensive diagnostic code.
Translation: It must be clear that additional problem was related entirely to the hospital stay, and the conditions covered are limited. I imagine proving fault will be a challenge.
The importance of the change is that it tip-toes toward “pay for performance.”
“Hospitals may therefore view the new policy as a harbinger of things to come and act in anticipation of more substantial reimbursement changes,” Rosenthal wrote, predicting hospitals may adopt further quality measures as a result of the new rules and improve reporting.
This began in earnest with reporting a limited number of measures, which the public can view at http://hospitalcompare.hhs.gov.
Today it’s pressure ulcers, bed falls and other things that shouldn’t happen. Tomorrow it’s more complicated stuff.
According to Medical News Today, starting in 2009 Medicare won’t cover “preventable” conditions. Because rules don’t allow hospitals to pass on the cost, they must shoulder the burden. Because Medicare and Medicaid participants make up a large percentage of hospital visitors, the agency has tremendous clout nationally to force changes in the health care system.
The commentary in the medical journal and this week’s news on the prevalence of hospital-acquired infections make this a particularly interesting time. I’ll be curious to see how hospitals respond to the change and if there is an effect on the bottom line.
Because information on hospital-acquired infections isn’t publicly disseminated (at least nowhere I’ve found) or reported to the state, determining the extent of the problem is nearly impossible. Maybe this will shed some light on it.
Jeff Raymond, Medical Writer
November 27th, 2007 at 4:52 pm
The Medicare part d plan does not address enough. Sure it helps some people, but a large minority are still stuck with major bills if they reach the doughnut hole.
Thanks for pointing out the not so obvious pitfalls of preventable conditions
July 30th, 2008 at 4:36 pm
I believe that the analysis in the NEJM significantly underestimates the impact that this will have on the industry.
For example analysis in one Midwestern hospital identified that the average cost to treat a CRBSI was $91,000, whereas the average reimbursement was about $67,000 – an operational loss of $24,000. As of Oct. 1, 2008, reimbursement will be zero. The CDC estimates 250,000 central line-associated infections occur in the United States annually, with an attributable mortality rate of 12 to 25 percent.
Many American health systems are significantly underinvested in quality management Infrastructure, Process, and Organization. I believe that Medicare’s move towards “pay for performance,” which will undoubtedly be embraced by private insurers as well, will provide significant incentive for hospitals and health systems to improve their quality. To achieve breakthrough improvements in quality, patient safety, and resource utilization hospitals and health systems must develop a “world class” quality management foundation that includes:
Strategy: including a clear linkage of quality and patient safety to the organizational strategy and a Board-driven imperative to achieve quality goals.
Infrastructure: incorporating effective quality management technology, EMR and physician order entry, evidence based care development tools and methodologies, and quality performance metrics and monitoring technology that enables “real time” information.
Process: including concurrent intervention, the ability to identify key quality performance “gaps,” and performance improvement tools and methodologies to effectively eliminate quality issues.
Organization: providing sufficient number and quality of human resources to deliver quality planning and management leadership, adequate informatics management, effective evidence based care and physician order set development, performance improvement activity, and accredition planning to stay “survey ready every day.”
Culture: where a passion for quality and patient safety is embedded throughout the delivery system and leaders are incented to achieve aggressive quality improvement goals.
My firm has assisted a number of progressive health systems to achieve such a foundation, and to develop truly World Class Quality.