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Patient Safety and Quality

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Both hospitals and Medicare would gain financially by improving patient safety

Medicare spends more than $300 million extra per year for additional care needed due to medical error or adverse events, such as care for a bed sore or postoperative blood infection (sepsis). Yet these extra Medicare payments cover less than a third of the extra costs incurred by hospitals in treating adverse events. Both Medicare and hospitals would gain financially by improving patient safety, according to a new study by Agency for Healthcare Research and Quality (AHRQ) researchers Chunliu Zhan, M.D., Ph.D., and Bernard Friedman, Ph.D., and colleagues.

The researchers used data from the AHRQ 2002 Healthcare Cost and Utilization Project Nationwide Inpatient Sample to examine the cost impact of five patient safety problems. Five AHRQ Patient Safety Indicators (PSIs) were used to identify adverse events during hospitalization: decubitus ulcer (DU) or bed sore, iatrogenic (hospital-caused) pneumothorax (IP), postoperative hematoma or hemorrhage (PH/H), postoperative pulmonary embolism or deep vein thrombosis (PE/DVT), and postoperative sepsis (PS). The rates varied from 1 case of IP to 34 cases of DU per 1,000 discharges of patients who were at risk for these problems. The Medicare payment for these adverse events under the Prospective Payment System (PPS) ranged from $735 per case of DU to $8,881 per case of PS, and an estimated national total of $313 million a year for the five types of adverse events studied.

Nevertheless, hospitals absorbed most of the costs of treating adverse events under the Medicare PPS. For example, hospitals received no additional payment from the Medicare PPS in 48 percent of postoperative sepsis events or in 80 percent of DU events. These extra charges were estimated per case as follows: $10,845 for DU; $17,312 for IP; $21,431 for PH/H; $21,709 for postoperative PE/DVT; and $57,727 for PS.

See "Medicare payment for selected adverse events: Building the business case for investing in patient safety," by Dr. Zhan, Dr. Friedman, Andrew Mosso, M.S., and Peter Pronovost, M.D., Ph.D., in the September 2006 Health Affairs 25(5), pp. 1386-1393. Reprints (AHRQ Publication No. 07-R008) are available from the AHRQ Publications Clearinghouse.

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