Insurers pay $39K more for surgical errors

If insurers better motivated hospitals through financial rewards to provide high-quality care--and decrease surgical mistakes, in particular--they could save a lot of money. That's the take away message for payers from a new study published Tuesday in the Journal of the American Medical Association.

The problem is that when doctors make errors during surgery, insurers inadvertently pay hospitals more as result of the patients staying in the hospitals' care longer to treat the preventable complications, the study found.

And private insurers are the primary subjects of these higher hospital bills, paying an average of $39,000 more for patients with surgery complications, compared to the $1,700 additional medical claims for Medicare.

That's why, the researchers say, insurers must overhaul the payment system so they stop rewarding poor care. They added that insurers should consider providing extra financial bonuses when hospitals provide above-average care to help reduce the number of avoidable surgical errors.

America's Health Insurance Plans spokeswoman Susan Pisno told The New York Times the study demonstrates how the health system should move away from the "perverse incentives of the old fee-for-service system that emphasized quantity over quality and toward methods of payment that reward better care."

For Blue Cross Blue Shield of North Carolina, aligning hospital payments with complication levels recently has become a priority. It even removed certain surgeons who frequently commit errors from some of its plans, BCBSNC Chief Medical Officer Don Bradley told The Wall Street Journal. But despite these efforts, "we're still undoubtedly paying for complications," he conceded.

To learn more:
- here's the study abstract
- read the New York Times article
- see the Wall Street Journal article

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