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Do hospitals cash in after surgical errors are made?

A study released earlier this month reveals an alarming phenomenon: Hospitals stand to make more money after surgical errors are made. That’s because hospitals end up getting to charge more for corrective procedures that would not have been necessary but for the surgical errors.

The study, which was published in the Journal of the American Medical Association, found that hospitals stand to make a 330 percent higher profit margin on patients who suffer surgical errors and are privately insured. Hospitals make about a 190 percent higher profit margin on patients who are covered by Medicare and fall victim to surgical errors, the study shows.

“We found clear evidence that reducing harm and improving quality is perversely penalized in our current health care system,” said one of the study’s authors. He added that it has been evident for quite some time that hospitals are not awarded for providing quality care, but until now it wasn’t evident exactly how much more hospitals profit from surgical errors.

The co-author said the study should make it clear that health care payment reform is needed. There has been plenty of research completed that demonstrates more effective ways of keeping patients safe, but the co-author said hospitals have been slow to implement the strategies. Perhaps it is because hospitals stand to lose profits if fewer errors are committed.

That’s why reform is needed, the study concluded, to make sure that hospitals that provide the best services make the most in profits. As the other co-author of the study explained,”Hospitals should gain, not lose, financially from reducing harm.” Until these changes are made, medical malpractice lawsuits will remain one of the only ways hospitals to hold accountable for their mistakes.

Source: The Raw Story, “Disturbing report finds U.S. hospitals profit more when surgery goes wrong,” Agence France-Presse, April 16, 2013