Navigation Links
Patients with surgical complications provide greater hospital profit-margins

Boston, MA -- Privately insured surgical patients who had a complication provided hospitals with a 330% higher profit margin than those without a complication, according to new research from Ariadne Labs, a joint center for health system innovation at Brigham and Women's Hospital (BWH) and Harvard School of Public Health (HSPH), Boston Consulting Group, Texas Health Resources, and Massachusetts Eye and Ear Infirmary. Medicare patients with a complication produced a 190% higher margin. The findings mean that, for hospital managers, efforts to reduce surgical complications could result in substantially worsened financial performance.

The study appears in the April 17, 2013 issue of the Journal of the American Medical Association (JAMA).

"We found clear evidence that reducing harm and improving quality is perversely penalized in our current health care system," said Sunil Eappen, MD, the lead author and chief medical officer of Massachusetts Eye and Ear Infirmary.

"It's been known that hospitals are not rewarded for quality. But it hadn't been recognized exactly how much more money they make when harm is done," said senior author Atul Gawande, MD, director of Ariadne Labs, professor in the Department of Health Policy and Management at HSPH and a surgeon at BWH.

An estimated $400 billion is spent on surgical procedures each year in the U.S. While effective methods to reduce complications have been identified, hospitals have been slow to implement them. Financial incentives may be a reason. The goal of the study was therefore to evaluate the hospital costs and revenues associated with having one or more major complications with surgical patients covered by four primary insurance typesprivate insurance, Medicare, Medicaid, and self-payment.

The researchers analyzed data from 34,256 surgical inpatients discharged in 2010 in a non-profit, 12-hospital system in the southern U.S. They looked at ten severe, preventable surgical complications and the contribution marginrevenue minus variable expensesper patient. A total of 1,820 procedures were identified with at least one complication.

The results showed that, for privately insured patients, complications were associated with a $39,017 higher contribution margin per patient ($55,953 vs. $16,936). For Medicare patients, the contribution margin per patient was higher by $1,749 ($3,687 vs. $1,880). For Medicaid and self-payment, complications were associated with significantly lower contribution margins than those without complications.

What that means, say the researchers, is that who pays for patients' care determines the financial implications of surgical complications. In this hospital system, private insurers covered 40% of patients, Medicare covered 45%, Medicaid covered 4% and 6% were self-pay, a breakdown that is comparable to the average U.S. hospital in 2010. Overall in this hospital system, complications were associated with a more than $8,000 higher contribution margin per patient.

At safety-net hospitals, which treat patients primarily covered by Medicaid or self-pay, reducing complications could improve financial performance. However, the study shows that at most U.S. hospitals, programs to reduce complications would worsen their financial performance.

"This is clear indication that health care payment reform is necessary," said Gawande. "Hospitals should gain, not lose, financially from reducing harm."

The research was funded through support from the Boston Consulting Group and from Texas Health Resources.


Contact: Marge Dwyer
Harvard School of Public Health

Related medicine news :

1. Higher-spending hospitals have fewer deaths for emergency patients
2. Researchers uncover a viable way for colorectal cancer patients to overcome drug resistance
3. Vaccine yielded encouraging long-term survival rates in certain patients with NSCLC
4. Study finds doctors have exaggerated fears when starting patients on insulin
5. Diagnostic Scans Tied to Radiation Risk for Gastro Patients
6. Predictors identified for rehospitalization among post-acute stroke patients
7. Pulse pressure elevation could presage cerebrovascular disease in Alzheimers patients
8. Breast cancer patients suffer treatment-related side effects long after completing care
9. Heart failure patients with diabetes may benefit from higher glucose levels
10. Gastro Woes Often Strike Rheumatoid Arthritis Patients
11. Short Walks May Ease Fatigue in Pancreatic Cancer Patients
Post Your Comments:
(Date:6/27/2016)... ... ... recently awarded their highest five-star rating to Best Buy Eyeglasses, an ... United States and Canada wear eyeglasses. Once considered to be a purely functional part ... fashion statement. Even celebrities use glasses as a way of creating an iconic image—like ...
(Date:6/26/2016)... Battle Creek, Michigan (PRWEB) , ... June 26, 2016 , ... ... abuse, joined as sponsor of the 2016 Cereal Festival and World’s Longest Breakfast Table ... held in honor of the city’s history as home to some of the world’s ...
(Date:6/26/2016)... ... 2016 , ... PawPaws brand pet supplements owned by Whole Health ... the health of felines. The formula is all-natural and is made from Chinese herbs ... Cat Kidney Support Supplement Soft Chews are Astragalus Root Extract and Rehmannia ...
(Date:6/26/2016)... , ... June 26, 2016 , ... ... once they have been diagnosed with endometriosis. These women need a treatment plan ... require a comprehensive approach that can help for preservation of fertility and ultimately ...
(Date:6/25/2016)... ... 25, 2016 , ... Austin residents seeking Mohs surgery services, can now turn ... to Dr. Russell Peckham for medical and surgical dermatology. , Dr. Dorsey brings specialization ... selective fellowship in Mohs Micrographic Surgery completed by Dr. Dorsey was under the direction ...
Breaking Medicine News(10 mins):
(Date:6/23/2016)... , June 23, 2016 Research ... Devices Global Market - Forecast to 2022" report to ... the treatment method for the patients with kidney failure, it ... excess fluid from the patient,s blood and thus the treatment ... potassium and chloride in balance. Increasing number ...
(Date:6/23/2016)... June 23, 2016  In a startling report released today, ... residents by lacking a comprehensive, proven plan to eliminate prescription opioid ... ranking of how states are tackling the worst drug crisis in ... states – Kentucky , New Mexico ... . Of the 28 failing states, three – ...
(Date:6/23/2016)... , June 23, 2016 ... CAPR ), a biotechnology company focused on the ... announced that patient enrollment in its ongoing randomized ... has exceeded 50% of its 24-patient target. Capricor ... the third quarter of 2016, and to report ...
Breaking Medicine Technology: