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Are Hospitals Profiting From Making Mistakes?

The Journal of the American Medical Association (JAMA) recently released a study which showed a surprising trend in our nation's hospitals. The study revealed that hospitals have a much higher profit margin when patients suffer from complications after surgery. Profit margins rise even higher when the patient who experienced complications after surgery is covered by private insurance.

Complications after surgery commonly include infections, wound disruption, pneumonia, strokes, pulmonary embolisms, and even cardiac arrest, among others. These complications can affect patients in hospital and outpatient settings. According to statistics compiled by the U.S. National Library of Medicine, National Institutes of Health, healthcare provider error contributes to a significant proportion of surgical complications.

On average, a hospital received $17,000 in revenue from a privately insured patient, according to the study. This number increases to $56,000 in revenue when the patient suffers a complication. The hospital's revenue increases an average of 330% when a privately insured patient suffers from complications, and the revenue increases 190% when a patient covered by Medicare suffers from complications.

A co-author of the study stated that, "this research provides dramatic evidence that hospitals lack financial incentives to invest in improving surgical quality. Policymakers talk about paying for performance, but instead Medicare and private payers are rewarding hospitals for complications. The U.S. healthcare system is paying for harm."

The system – which currently operates counter-intuitively for the fact that complications produce higher profits – needs to be reformed to provide incentives for the quality of care administered. Reformation of the healthcare system can also improve the quality of medical care patients receive – something that should be the highest priority for all healthcare providers. Unfortunately, however, the healthcare system is not free from the attraction of profits and we see just how negative an impact this can have with the numbers provided by this study.

A representative for America's Health Insurance Plans suggests that insurance providers should move away from the fee-for-service models, which actually cause hospitals to value the number of patients over the quality of care given. The authors of the study are not suggesting that these complications are in any way intentional, but drawing attention to this trend may help to ensure that higher quality health care is provided in hospitals nationwide.

At Chaikin, Sherman, Cammarata & Siegel, P.C., our Washington, DC medical malpractice attorneys believe that patients who make the decision to accept treatment from a healthcare provider deserve care that, at the very least, meets acceptable standards. When healthcare professionals fail to meet these standards for any reason, injured patients and their families have the right to explore their options for recovering their losses by filing a medical malpractice claim. If you would like more information about medical malpractice and how our legal team can be off assistance, please contact a Washington, DC personal injury lawyer from our firm.