Hospital quality crackdown yields pros and cons

In what is considered a major win for healthcare consumers, the new health law contains dozens of provisions, including financial penalties for hospitals, to reduce medical errors, hospital-borne infections and costly preventable readmissions. But although cracking down on these three occurrences alone could save the healthcare system billions of dollars and potentially save lives, the possible penalties are a concern for hospitals.

Provisions include, but are not limited to:

  • In 2012, Medicare will stop paying hospitals for preventable readmissions tied to health conditions such as heart failure or pneumonia. In 2014, HHS will expand that policy to cover four additional health conditions.
  • Beginning in 2012, hospitals will be paid commensurate to their performance scores for patient satisfaction and care quality tied to treatment of conditions such as heart failure, pneumonia and hospital-borne infections.
  • In 2015, HHS will start reporting each hospital's record for medical errors and infections pertaining to Medicare patients. Medicare will reduce its payments by 1 percent to hospitals with the highest rate of medical errors and infections. The government will also no longer pay hospitals for treatment when a Medicaid patient is harmed during a hospital stay.

According to analysts, a medium-sized general hospital could lose upward of $1 million a year from these penalties at a time when all providers are struggling to keep up with escalating healthcare costs, reports CNNMoney. And for a larger hospital, ensuing damage to its reputation could cost exponentially more.

"Think about a town with three or four hospitals," said Brad Bowman, director with PricewaterhouseCoopers' healthcare advisory practice. "Once the local press has access to hospitals' detailed quality and performance scores, consider the impact a story about a poor-performing hospital can have on its business."

Meanwhile, the Community Health Alliance in northern California is among one of the first regions to invite residents to view quality rankings for local physicians and hospitals. The data is pulled from the existing Medicare Hospital Compare website and presented on in a more easily accessible format, Laura McEwen, executive director of CHA, told the Times-Standard.

"It's probably scary for a lot of physicians, but I always look at rankings as a baseline. They give you something to work on," said Dr. Ann Lindsay, who was speaking as a private practitioner and not in her role as the county's public health officer, the newspaper reports. "It's not going to necessarily have people move from one practice to another, but it may change how people utilize health services and work with providers."

To learn more:
- read this CNNMoney piece
- check out this Times-Standard article