Patients who incur surgical complications at hospitals have to stay at facilities longer, and this leads to much higher profits at those hospitals, according to a study in the Journal of the American Medical Association.
For the study, several Harvard Medical School researchers — including Atul Gawande, MD, and Sunil Eappen, MD — looked at 34,256 discharges from a non-profit, 12-hospital system in 2010.
They found that 1,820 discharged patients, or 5.3 percent, experienced at least one postsurgical complication and required extra stay. The initial stay and extra stay resulted in roughly quadruple the median stay of a patient with no complications, leading to higher hospital revenue depending on the payor.
Hospital revenue jumped, on average, from $18,900 for a patient without complications to $49,400 for a patient with complications. Private insurance paid significantly more than Medicare, Medicaid and self-pay patients. For the studied hospital system, surgical complications led to an average of $8,084 in increased profit per patient.
The authors said payment reform that focuses on quality rather than quantity and penalties on readmissions, which are major parts of President Barack Obama's health law, could reverse this trend. In addition, safety-net hospitals stand to gain the most from quality-based reimbursement.
"Most U.S. hospitals treat patient populations primarily covered by Medicare or private payers, and programs to reduce complications may worsen their near-term financial performance. Some U.S. hospitals, often referred to as safety-net hospitals, treat populations primarily covered by Medicaid or self-payment, and complication reduction efforts might improve their financial performance," the authors wrote.
For the study, several Harvard Medical School researchers — including Atul Gawande, MD, and Sunil Eappen, MD — looked at 34,256 discharges from a non-profit, 12-hospital system in 2010.
They found that 1,820 discharged patients, or 5.3 percent, experienced at least one postsurgical complication and required extra stay. The initial stay and extra stay resulted in roughly quadruple the median stay of a patient with no complications, leading to higher hospital revenue depending on the payor.
Hospital revenue jumped, on average, from $18,900 for a patient without complications to $49,400 for a patient with complications. Private insurance paid significantly more than Medicare, Medicaid and self-pay patients. For the studied hospital system, surgical complications led to an average of $8,084 in increased profit per patient.
The authors said payment reform that focuses on quality rather than quantity and penalties on readmissions, which are major parts of President Barack Obama's health law, could reverse this trend. In addition, safety-net hospitals stand to gain the most from quality-based reimbursement.
"Most U.S. hospitals treat patient populations primarily covered by Medicare or private payers, and programs to reduce complications may worsen their near-term financial performance. Some U.S. hospitals, often referred to as safety-net hospitals, treat populations primarily covered by Medicaid or self-payment, and complication reduction efforts might improve their financial performance," the authors wrote.
More Articles on Hospital Finance:
Report: Higher Payments to HOPDs "Not Sustainable"
MedPAC: Hospitals Must Have Pressure to Contain Costs
Study: Price Information for Total Hip Arthroplasty Hard to Obtain