This story‘s been floating around the blogosphere for a few days now, and I’ve been wanting to weigh in. Basically, Medicare is saying that it will no longer pay for conditions and treatments that result from hospital errors. Sounds reasonable on the surface, right? After all, if a surgeon leaves a sponge in a patient, why should the patient or the patient’s insurance company have to pay for the extra operation that it takes to remove the object and the additional hospital time? Most surgeons, at least, don’t charge a fee for the reoperation to remove a retained surgical instrument or object, although hospitals still charge for O.R. time and however long the patient is in the hospital.

The problem is, this policy goes far beyond that. It’s how it defines “medical errors” that’s the problem:

In a significant policy change, Bush administration officials say that Medicare will no longer pay the extra costs of treating preventable errors, injuries and infections that occur in hospitals, a move they say could save lives and millions of dollars.

Eileen O’Neill-Pardo’s mother, Margaret, died after an infection developed at a hospital.
Private insurers are considering similar changes, which they said could multiply the savings and benefits for patients.

Under the new rules, to be published next week, Medicare will not pay hospitals for the costs of treating certain “conditions that could reasonably have been prevented.”

Among the conditions that will be affected are bedsores, or pressure ulcers; injuries caused by falls; and infections resulting from the prolonged use of catheters in blood vessels or the bladder.

In addition, Medicare says it will not pay for the treatment of “serious preventable events” like leaving a sponge or other object in a patient during surgery and providing a patient with incompatible blood or blood products.

“If a patient goes into the hospital with pneumonia, we don’t want them to leave with a broken arm,” said Herb B. Kuhn, acting deputy administrator of the Centers for Medicare and Medicaid Services.

The new policy — one of several federal initiatives to improve care purchased by Medicare, at a cost of more than $400 billion a year — is sending ripples through the health industry.

I know what some of you are thinking, particularly those less inclined to like doctors. You’re probably thinking: Greedy doctors! No wonder they oppose something like this. There’s just one problem. Most of the items on the list, although potentially preventable, are not 100% preventable even under ideal conditions. Take pressure ulcers (bedsores), for example. There are certainly nursing care interventions that can greatly decrease the risk of pressure ulcers, but no intervention will reduce that risk to zero. I’ve seen patients where everything was done right, the patients were turned frequently and placed on the latest beds designed to minimize pressure, who still got ulcers. Remember, Christopher Reeve, who presumably got the best skin care available after he became quadriplegic, died from sepsis due to an infected pressure ulcer.

The same is true of catheter-related infections. If a patient has a Foley catheter in place, it’s a path for bacteria to make it to the bladder and cause infection. There are things that can be done to decrease this risk, but there’s nothing that can be done to reduce it to zero–or even close to zero. Infection is a fact of life with indwelling catheters, and the risk increases the longer the catheter is in place. Worse, as the article points out, this initiative could have a paradoxical effect of increasing testing and costs, as hospitals do more diagnostic studies and bloodwork on patients admitted to the hospital to determine whether there is any preexisting infection that only manifested itself during the hospital stay. It’s also not difficult to foresee the increased use of “prophylactic” antibiotics for dubious indications, with the attendant increase in the number of resistant organisms that overuse of antibiotics results in.

Pay-for-performance is not a bad thing in and of itself (although most proposals that I’ve seen provide meager incentives compared to the documentation required), but this proposal is just plain stupid because it’s such a blunt instrument. It would make a lot more sense to set standards for the maximum rates of these particular infectious complications for each hospital based on the mix of patients and the rates that could reasonably be expected if the best evidence-based infection control guidelines are used. Hospitals that exceed that rate by, say, two standard deviations (or even less) would then be penalized in this manner until they got their hospital-acquired infection rates down to an acceptable range. To sweeten the pot, hospitals that exceed these standards by two standard deviations could receive more money for their services. Such a system would make far more sense than this proposal.

Of course, the problem with these regulations is that they are not designed to improve patient care, the justifications of Medicare notwithstanding. That’s just the P.R. In reality, these regulations are primarily intended to save money. That’s their primary purpose. The only thing of which we can be certain in assessing the likely effect of these new regulations is that the law of unintended consequences will be obeyed. For example, in the cause of decreasing falls, it’s not hard to guess that some hospitals may start using more physical restraints or sedatives for demented patients with a tendency to wander. In the case of central venous catheter-related infections, the risk of infection increases with time that the catheter is in place; the only way to reduce it is to remove the catheter and place a new one at a new site. Changing catheters more frequently will (1) cost more money, because it’s a surgical procedure that can be billed for, and (2) potentially expose the patient to more complications, such as bleeding or a collapsed lung, from more frequent catheter placement/replacement. Changing a catheter over a wire is useless for preventing infection, and frequently changing it to a new site has a price, as do the newer antibiotic-impregnated catheters, which also lower infection rates.

There’s no such thing as a free lunch, and cost containment is not a motivation that will necessarily lead to better patient care.

Chris Rangel has more.


  1. #1 Russell
    August 23, 2007

    I have a relative who has lost one hip joint and suffered years of surgeries due to an MRSA infection acquired, no doubt, during the treatment of a broken bone. Should insurance coverage for that therefore be yanked? That’s nuts.

  2. #2 gonzoknife
    August 23, 2007

    This is just cost shifting to the patient. For something like an infection caused by a catheter, the hospital is still going to bill for antibiotics and any associated treatment. That bill will go to the insurance company or Medicare who will promptly deny payment.

    The hospital will then expect payment from the patient per every billing arrangement in existence.

    The result of these rules will be increased costs for patients and increased costs for hospitals (for recovering the bills and eating the ones that don’t get paid).

    Meanwhile, insurance premiums will continue to rise.

  3. #3 daedalus2u
    August 23, 2007

    Actually, this is an interesting cost saving policy, not to pay for fixing mistakes caused by incompetence or negligence. There are much better places to apply it than Medicare.

    If we are going to apply this policy, it shouldn’t stop at Medicare. It should include the Pentagon, NASA, FEMA, the Army Corp of Engineers, Department of Agriculture, EPA, there are a whole slew of agencies that have pissed away countless billions and countless lives.

    How about Iraq? The Pentagon has pissed away half a trillion dollars and several thousand American lives and for what? On what basis? It was gross negligence (at best) from the beginning until now.

  4. #4 wolfwalker
    August 23, 2007

    Orac, might I suggest that you wait until the new regs are actually published before getting angry? Your source, after all, is the New York Sl-, er, Times, which isn’t exactly known for either its reliability or its friendliness to this administration. The truth may not be as bad as the paper paints it.

    That said, I agree that this is primarily a cost-cutting move, no matter what candy-coating is being put on it. I also agree that it will have unintended consequences — certainly expensive ones, and probably directly damaging to patients in at least some cases. I also suspect that before long you’ll see either the feds or the states, whoever has jurisdiction, will start to pass laws that say something along the lines of “hospitals and doctors can’t charge for care made necessary by caregivers’ negligence.” (As a sidebar, I admit to some surprise that apparently no such laws already exist — it seems to me unfair to charge a patient for a doctor’s bad act, no matter the exact circumstances.)

    Call it one more of the ways in which lawyers, accountants, and politicians have joined forces to pull the health-care system in conflicting directions, resulting in a system that can’t possibly fulfill all the demands placed on it. And as usual, the people at the heart of the storm — doctors, nurses, and patients — are the ones who will suffer the most.

  5. #5 Orac
    August 23, 2007

    Orac, might I suggest that you wait until the new regs are actually published before getting angry? Your source, after all, is the New York Sl-, er, Times, which isn’t exactly known for either its reliability or its friendliness to this administration. The truth may not be as bad as the paper paints it.

    Actually, it’s been reported in several other sources. In fact, I think it was first reported in the New Jersey Star-Ledger.

    Be that as it may, I doubt it could be any better than it sounds. Five out of the eight areas that are being targeted are not anywhere close to 100% preventable, as Dr. Rangel points out.

  6. #6 Coin
    August 23, 2007

    Your source, after all, is the New York Sl-, er, Times, which isn’t exactly known for either its reliability or its friendliness to this administration.

    What on earth?

  7. #7 N=1
    August 23, 2007

    Two other points to consider, Orac:

    Hospitals in their desire to cut un-reimbursed costs have looked to cut staff in the past – mostly registered nurses. There is a direct correlation with decreased morbidity and mortality when patients are cared for by baccalaureate educated registered nurses. (IOM/U Penn 2004) This might create a negative cycle of decreasing reimbursement/staff/patient outcomes that will benefit no one.

    This policy also will place patients in adversarial positions to hospitals, physicians and insurers as all will be motivated to pin the blame for errors and their consequences on another party to avoid incurring costs.

    In more unintended consequences, it is feasible to wonder how many patients deemed at high risk to incur “preventable” complications will be turned away from risk averse physicians and hospitals.

  8. #8 plunge
    August 23, 2007

    Yay! One MORE reason for fewer and fewer doctors to accept patients on Medicare! Just what we needed!

  9. #9 AnnR
    August 23, 2007

    It is true that some patients are going to get bedsores no matter what. I have a relative in the advanced stages of dementia from a stroke and it’s an uphill battle. She’s so thin and weak, anything that rubs against her body it’s likely to break the skin open.

    At this point we really don’t want her going to a hospital for anything. She picks at the IV, is totally confused by the change of scene — anything they’d do isn’t going to bring her back for improve the quality of her life. We just want her to live out her life as comfortably as possible.

    If these rules spare a dying person from interventions that aren’t ever going to restore them to health then I think they may be worthwhile. Haven’t I read somewhere that 80% of Medicare funds are spent on 20% of the people, and that for many of those people it’s in the last 120 days of their lives?

    We are willing to say no, but not all families are. It may be that for the VERY ill and failing this creates institutional mind shift to make people’s last days better and not hooked up to tubes trying to combat something brought on by a treatment that wasn’t going to do much anyway.

  10. #10 Jud
    August 23, 2007

    gonzoknife said: “This is just cost shifting to the patient. For something like an infection caused by a catheter, the hospital is still going to bill for antibiotics and any associated treatment. That bill will go to the insurance company or Medicare who will promptly deny payment.

    “The hospital will then expect payment from the patient per every billing arrangement in existence.”

    That’s incorrect, gonzoknife. During periods of Medicare coverage for inpatient hospitalization, hospitals are barred from billing patients for amounts beyond those Medicare approves. (The amounts approved for inpatient hospitalization under Medicare Part A include relatively low deductibles and coinsurance that are the patient’s responsibility.)

  11. #11 Coin
    August 23, 2007

    During periods of Medicare coverage for inpatient hospitalization, hospitals are barred from billing patients for amounts beyond those Medicare approves.

    Okay, so that’s good. Would it be correct though to say that if private insurers adopt similar policies, that the insurees will have no such protection?

  12. #12 Sid Schwab
    August 23, 2007

    coin: with most private insurers, providers are barred by contract from “balance billing,” ie collecting from the patient what the insurer doesn’t pay. And it’s generally been the case that as medicare goes, so go the private insurers. So such rules will expand, almost for sure.

    Orac: I posted about this too, and my feelings are like yours. In theory, measures to stimulate safe practice are welcome. It’s in the execution that it becomes problematic in general; and, as you said, in particular the list raises lots of questions. Unintended (or maybe not?) consequences are sure to follow. As a side note, what’s interesting to me is that they seem to be projecting only $20 million in savings.

  13. #13 Jonathan Vos Post
    August 23, 2007

    Is there a scientific consensus on the distribution by age, geographic location, income, experience of doctor, and other variables on iatrogenic morbidity and mortality?

  14. #14 pelican
    August 23, 2007

    I wonder if this is the next step in the public/private divide that is developing informally? In 20 years, I suspect health care in the States will look more like Britain than Canada. If you’ve got private insurance, you’ll get rapid quick care in a MRSA-free hospital, from well-trained MDs, with a low patient:nurse ratio, and a flat screen TV. But, If you’ve got Medicare/Medicaid, you’re at the County, where you’ll get what you get. Informal rationing.

    I wonder if private hospitals will just stop offering emergency care altogether, to avoid EMTALA, and implement systems to facilitate transfer into their medical and surgical beds from public hospitals and urgent care centers?

    Maybe there will be a switch from private hospitals advertising “ER care in 30 minutes or less” to advertising supporting ‘patient’s rights’ … “did you know you can be transfered to any hospital you’d like, just by asking?”

  15. #15 Flex
    August 24, 2007

    Let’s see, in the guise of claiming to make care-givers responsible for their actions, they will create another source of worry for them.

    Maybe this is really an economy-stimulous package. For it probably won’t take long before the hospitals start docking the pay of caregivers to cover the costs of ‘preventable events’. This will require all caregivers to take out some sort of insurance to avoid losing their life savings to ‘preventable events.’ Thus stimulating the insurance industry.

    It is truly a cunning plan.

    All satire aside, Sid Schwab (or someone else), how does this affect billing patients without private insurance?

  16. #16 Sid Schwab
    August 24, 2007

    Flex: interesting question. As it now stands, people with no insurance are in fact the only ones that get charged full-freight for service. In fact, it’s illegal to discount a fee to such people, because Medicare sees that as fraud (ie, if you bill medicare a certain fee, and less to someone else, that’s an offense…. Despite the fact that medicare and other payers don’t really pay attention to what you bill. They pay what they pay.) So I suppose in theory a person with no insurance could end up being charged for all those services that, in the case of a person with coverage, a hospital or physician would eat.

  17. #17 Jud
    August 24, 2007

    plunge wrote: “Yay! One MORE reason for fewer and fewer doctors to accept patients on Medicare!”

    Anything you may have read about fewer doctors accepting Medicare is either “sky is falling” nonsense, or someone speculating about the future, saying “If X situation continues, doctors will stop accepting Medicare.”

    In fact, the percentage of doctors accepting Medicare nationwide is something on the order of 92-96% and rising every year (rising slowly, since it doesn’t have far to go). Medicare (the federal Centers for Medicare and Medicaid Services) has the statistics available for download – look up the downloads associated with the Data Compendium if you’re interested. I don’t remember the 2006 numbers precisely, but my somewhat hazy recollection is that the states with the lowest percentages of doctors accepting Medicare still have figures in the high 80s or low 90s.

  18. #18 akaka
    August 24, 2007

    Of course, that doesn’t help too much if 99% of family practice physicians take it and 4% of plastic surgeons do when you need facial reconstruction. Medicare can slash reimbursements all day long for the ~50% of physicians who are primary care and they’ll probably just have to eat it and hire more PAs. Try doing that to a dermatologist or surgical specialists, where there is often one per 100,000 people or more and you’re going to get some mighty angry old people when they find out none of the 3 otolaryngologists within 50 miles is looking to bend over for Medicare to put their cochlear implant in.

  19. #19 Samantha Vimes
    August 25, 2007

    I suspect this will influence diagnoses. No, seriously. The smart doctors/hospitals will find ways to treat what needs to be treated and still be able to bill it. And I kiss their lies, because the alternative is going to be patients left untreated, because the truth will mean there’s no money for the treatment. A patient can’t get the doctor’s malpractice insurance to pay if they can’t afford a second doctor to prove there was error(and I doubt it will pay anyway for preventable-ish but normal complications).

    My grandmother had a wad of cotton left in her and had to go back for a second surgery, and she heard while under anesthetic what the problem was. But no one wanted to admit it officially. Now, maybe she dreamed it, but at least she got the thing out and got well. With the new regulation, I’m not sure if anyone would touch her.

    The patients are the ones most likely to suffer. And it may help insurers in the short term, but thank to the “donut gap” in medicare’s prescription coverage, my long-term Republican father is talking about universal single-payer plans and how good people have it in Canada.

  20. #20 Amy Alkon
    August 25, 2007

    I have a friend with lung cancer who I saw, firsthand, had the best of care (beyond the doctors the nurses were heroes/saints) at Cedars-Sinai, and she still had bedsores. Disease is a bitch, and with it sometimes come corresponding conditions, and they should be covered. Obvious malpractice, well, fine, quibble with it.

  21. #21 Justin Moretti
    August 26, 2007

    This is madness.

    I can see the stress levels of junior medical staff (interns and junior residents) rising exponentially. I can’t even begin to imagine what nurses’ stress levels will do.

  22. #22 BladeDoc
    August 27, 2007

    Yet another reason this is insane is because it will provide (even more) incentives for certain subspecialists to not take hospital call. For instance, say someone is admitted by an orthopod for a broken hip and during their stay they develop a decubitus for which Medicare won’t pay. The orthopod will then consult a plastic surgeon for the wound care (trust me when I tell you that you don’t want an orthopod (bone surgeon) trying to perform muscle flaps to treat a decubitus) who will then GET PAID NOTHING.

    Our hospital already has trouble keeping subspecialists on staff (particularly hand and plastics). If these rules apply to consults brought in post complication I’m guessing a lot of “lost pagers” in the future.

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