November 14, 2014
How to Avoid Paying for Hospitals’ Errors
by Leah Binder
An employer pays an average of $8,000 for every error by a hospital -- but it doesn't have to be that way.
There’s been a lot of talk lately about value-based purchasing and price transparency in the U.S. healthcare system. With the proliferation of high-deductible health plans, consumers and payers are now actively chasing “value”— high-quality care at the right price. But what happens when “value” calculates to a grand total of zero—or even less than zero?
Only in healthcare is that even possible. “Zero value” occurs when healthcare is harmful—and you, the patient or purchaser, pay extra for the privilege of that harm. This is the issue currently facing employers and other purchasers paying out of their own pockets when a hospital commits an error that results in injury, infection or other harm to a patient. It’s backwards and incomprehensible, but healthcare purchasers are at the mercy of these zero value “hidden surcharges.” The payer gets the bill for the added length of stay and treatment of the infection or the medication error, even if they were preventable. This is common, and it’s not cheap.
The Leapfrog Group created the Hidden Surcharge Calculator, which estimates that, on average, an employer pays approximately $8,000 per hospital admission for errors, injuries, accidents and infections. The calculator was recently awarded a “Certificate of Validation Seal” by the Care Innovations Validation Institute, an organization established by Intel and GE to rate healthcare tools, plans and vendors to help industry consumers make educated choices. The Hidden Surcharge Calculator is free and allows plans and employers to determine surcharges they pay for their covered lives.
To build on the findings from the calculator, Leapfrog crafted additional tools to help purchasers apply their leverage with hospitals in their communities, communicate effectively with their employees about patient safety and try to reduce some of these shocking surcharges. So we launched the Hospital Safety Score Purchaser Toolkit, also free, created with the support of a grant from the Robert Wood Johnson Foundation. The toolkit is being released at a crucial time of year—the beginning of open enrollment season. We know that employers want to help their employees make the best decisions about their healthcare, and we hope that our toolkit will foster genuine conversations on these issues.
We include downloadable “plug-and-play” communications, including newsletter articles, internal memos template emails and even sample tweets. Messages educate employees about the problem of patient safety and what they can do to protect themselves and their families. It provides background and instructions for using the Hospital Safety Score, letter grades that assess the safety of general hospitals. There’s also a series of whiteboard videos that explain the issues in plain language and can be downloaded at no cost.
Just as importantly, we want to encourage purchasers to use their own leverage to effect change. Despite the harm to employees and expense to the bottom line, patient safety is rarely observable in claims data. Purchasers have to rely on hospitals to voluntarily report on safety to the Leapfrog Hospital Survey. By putting pressure on hospitals to publicly report to Leapfrog, healthcare purchasers can ensure that transparency and accountability are at the top of every hospital’s agenda. The toolkit offers suggestions on joining local business coalitions on health to maximize regional leverage, communicating with hospitals and getting needed provisions in contract language with plans.
Value-based purchasing is nonsensical when value is less than zero, so plans and purchasers need to be more aggressive on patient safety. Otherwise, payment reform loses its raison d’etre.
Because the safety problem is so large and hard to pinpoint, many payers just give up. The Purchaser Toolkit, Hospital Safety Score and Surcharge Calculator are meant to provide them with concrete steps that will make a difference immediately.