The Problems with Medicare and Patient Safety in America’s Hospitals

Under the Affordable Care Act (ACA), Medicare will lower payments to the 25% of hospitals that have the highest rates of hospital-acquired conditions (HACs).

Medicare is focusing on avoidable complications like blood clots, bedsores, and infections from central line catheters. Not all hospitals are subject to this particular Medicare rule, however. Around 1,400 hospitals are exempt because they offer specialized treatments like rehabilitation or psychiatry, or because they treat specific patient populations, like veterans or children. Additionally, critical access hospitals – ones that are usually located in rural areas and provide hospital access where otherwise there would be none – are exempt, and hospitals in the state of Maryland are also exempt due to a payment arrangement that state has with the federal government.

In the latest round of penalties, Medicare has reduced payments to 758 hospitals with the highest rates of infections and other theoretically avoidable complications. This number accounts for almost half of the academic medical centers in the US, including many of the most prestigious ones. Are these respected medical centers more dangerous, or do they face more complications because they take on the sickest patients, as opposed to ordinary hospitals that tend to treat more routine conditions?

What Are Hospital Acquired Conditions?

Hospital acquired conditions (HACs) are exactly what they sound like. They’re conditions that the patient ends up with after a hospital stay that they didn’t have when they were admitted. They include a range of conditions, from air embolism to blood incompatibility to falls, burns, foreign objects retained after surgery, diabetic complications, and pressure ulcers.

Under the Medicare program designed to incentivize steps to reduce rates of HACs, the federal government issues each non-exempt hospital an HAC score. Scores range from 1 to 10, with 1 being best, and 10 being worst. Currently, hospitals with scores above 6.75 are being penalized through Medicare cuts.

Medicare says that the program is getting good results. Quality Director Dr. Kate Goodrich has said that rates of HACs decreased faster in penalized hospitals than in non-penalized hospitals, indicating improvement due to the program. This held true for large teaching hospitals as well. A 2013 study concluded that the policy is associated with a decline in rates of hospital acquired vascular catheter-associated infections.

Penalties for Aggressive Patient Screening?

Some doctors at the hospitals that have faced Medicare cuts due to HACs contend that they’re being penalized for having excellent patient screening. After all, lots of times you won’t know about an infection if you don’t test for it. Do hospitals with lower HAC rates really have fewer problems, or do they catch fewer problems because they don’t test as much?

Furthermore, some hospitals have complained that sometimes there is hardly any difference between the hospitals that sustain the penalties and those that barely escape them. And they say the penalties take away critical resources that these facilities need to address their performance.

Still, advocates of the Medicare penalties, like Lisa McGiffert, director of Consumer Reports Safe Patient Project, contend that the complications and infections hospitals are being penalized for are errors that “just should not be happening.”

Many Hospitals Facing Medicare Cuts Take on Especially Difficult Cases

Another point doctors at top-rated, yet penalized hospitals make is that Medicare doesn’t sufficiently adjust its data for the different sickness levels of hospital patients, as well as ages or other factors that could make patients more susceptible to GACs. For example, academic medical centers may handle extremely complex cases, like organ transplants, and practitioners say that comparing them to hospitals that generally only handle routine cases is unfair.

An analysis done for Kaiser Health News reported that penalties were levied against 32% of hospitals that handle the sickest patients, while they were levied against only 12% of hospitals handling the least complicated cases. Another finding was that hospitals with the poorest patients were more likely to face penalties, which could be a problem since these hospitals are considered “safety net” hospitals for the poor. It could be seen as Medicare punishing hospitals for taking on patients (the sickest and / or poorest) that nobody else takes.

Hospitals Can Improve and Still Face Payment Cuts

Another fact that many hospitals find distressing is that hospitals can make marked improvements in rates of HACs, yet still face penalties again the following year if they remain in the 25% of facilities with the highest rates. Congress requires Medicare to fine 25% of non-exempt hospitals every year, and in many cases these hospitals were also fined the previous year. They may have made statistically significant improvements, yet still face penalties for not catching up to peers.

Doctors: Medicare Is Measuring the Wrong Things

A study published in the Journal of the American Medical Association based on the first year of the Medicare penalty program found that hospitals that were penalized were also those with characteristics typically associated with high quality. In other words, hospitals with the most extensive trauma centers, those with more nurses per patient, and those accredited by the Joint Commission, which accounts for 88% of the accreditations of hospitals in the United States.

There are doctors who contend that the penalties assessed by Medicare are based on just a fraction of the types of problems patients may experience in the hospital. For example, medication errors are not part of the program, even though medication errors are the most common source of problems in hospitals. Are hospitals concentrating on improving the wrong measures in order to avoid the Medicare penalties?

Processes That Effectively Cut Error Rates

Boston health researcher Dr. Eric Schneider says that research shows medical errors can be reduced by practicing a number of relatively low-tech procedures. For example, entering physician orders into computers rather than writing them down on paper can cut error rates, as can better hand-washing protocols and the use of checklists of procedures to follow with surgeries. When these basic techniques are used with consistency, they can move the needle in the right direction with regard to medical errors.

Counting and quantifying medical errors isn’t easy, because cause and effect are not always clear. Moreover, reporting is largely voluntary. Plus, how is it possible to determine with confidence which medical mistakes are truly preventable? How avoidable a problem is can be subject to debate in many cases.

Hospitals are improving, it appears. From 2010 to 2014 hospital patients experienced 2.1 million fewer HACs, a 17% decrease. An estimated 87,000 fewer deaths occurred due to HACs during that period, and in monetary terms it caused $20 billion of savings in healthcare costs. Can these reductions in HACs be attributed to programs like the Medicare incentives? In part, yes, but there are other factors, like other insurers’ payment policies, public reporting of hospital-level error results, and the efforts of the Department of Health and Human Services Partnership for Prevention initiative.

Medicare is leading the national shift away from fee-for-service reimbursement for healthcare services and toward value-based reimbursement. It’s a shift that will include a lot of “growing pains,” and many top academic hospitals have found themselves on the wrong side of Medicare penalties based on HACs. As long as patients understand the full picture, including the fact that many of the penalized hospitals are the very ones that take on the most difficult cases, they can make more informed choices about which hospital to choose for care.

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