HMC: Hospitals lose $2 Million in errors yearly

NEEDHAM, MASS. -  March 8, 2010 - The Healthcare Management Council, Inc. (HMC) has found that by improving care to eliminate the off-quality treatment of patients, a 200-bed hospital can potentially save $2 million each year.

Using federal Agency for Healthcare Research and Quality (AHRQ) indicators, HMC has analyzed the performance of hundreds of facilities ranging in size from 75 beds to over 800 beds. Now in a recent study, HMC identified the top Hospital Acquired Conditions (HACs) and established how much extra care each of these HACs requires. HACs have resulted in nonpayment from Medicare and Medicaid, and in the future, private insurers will likely stop covering HAC-related costs, as well.

Given HACs are preventable, few would argue they shouldn't happen: moreover, some even result in death. According to the U.S. Centers for Disease Control, there are an estimated 1.7 million healthcare-associated infections (HAIs) annually, causing 99,000 deaths. The overall annual direct medical cost of the HAIs to U.S. hospitals is as high as $45 billion, claims the CDC, with an estimated cost of HAI per patient as high as $25,903.

Now, further analysis based on 2009 data from HMC revealed how just a handful of off-quality cases are the biggest drivers of these enormous extra dollar costs. These findings, which demonstrate which HACs are the most costly, can provide guidance to patient care improvement and the preservation of hospital assets and resources.

HMC has listed the HAC categories below in order of prevalence, with their average total cost per hospital annually. Also listed is each HAC's per-patient average cost increase. Because of the higher volume of some of the HACs, such as decubitis ulcers, they were more expensive overall for a hospital to treat, even if the per-patient cost was relatively low compared to other HACs.

HACs take financial toll
Decubitis ulcers were the most prevalent HAC, and because of that the second most expensive condition, costing a facility an average total of roughly $536,900 annually. A patient acquiring a bedsore requires an average of $9,200 in extra care.

Postoperative pulmonary embolism and deep-vein thrombosis (DVT) comprised the second most prevalent category, and the most expensive, costing a total of $564,000 each year. These two related HACs require $15,500 more in care expense per patient.

Accidental puncture and laceration comprised the third most prevalent category, and the fifth most costly, averaging a total of $248,100 per hospital. A patient affected by these typically requires $8,300 in healthcare dollars.

Post-operative respiratory failure was the fourth most prevalent and third most expensive HAC, at $261,000 in total per hospital. An afflicted patient requires $21,900 more in spend.

Infections due to medical care made up the fifth most prevalent HAC. It was the fourth most expensive category, costing $252,600 per hospital on average, and each afflicted patient, on average, requires $24,500 more in care.

Solutions to off quality exist
"The old saw that ‘An ounce of prevention is worth a pound of cure' is truer in a hospital than most people realize," said Shelley Burns, director of knowledge management at HMC. "With the proper focus on how physicians or diagnosis-related groups (DRGs) are actually the drivers of these off-quality results, big changes can happen."

She went on: "While the statistics paint a gloomy picture, nevertheless, virtually all these HACs are preventable. However, hospitals must follow best practices, analyze the root causes of their off-quality issues, and engage clinicians in improving processes. HMC has assembled compelling best practices from all our clients. These are not theoretical, but ones that are actually on the ground and working. In some cases, they require education or performing special patient assessments, but generally it's a small investment that can save hundreds of thousands of dollars annually."