Tag Archives: hospital safety score

Employers: Don’t Pay for ‘Never Events’

The initial installment in this series expressed concern that too narrow a focus on wellness diverts companies’ attention from more compelling opportunities to save money and improve employee health outcomes. This installment starts with a related  shocker: By far the most costly inpatient diagnosis code, septicemia, is not addressed by any wellness program in the country.

Here is the government’s official ranking:


Septicemia due to contamination, which is just one of many avoidable hospital errors, shows that there is a major opportunity to save money by directing employees to hospitals that are most likely to avoid errors. To back their commitment to avoiding errors, such hospitals also usually offer a “never-events” policy, meaning they agree not to be paid for events that are their fault and that should never happen. So your employees will be more likely to have a safer experience—and, if they don’t, you don’t pay. (To be fair to hospitals, not all septicemia is contracted there. At the same time, many blood infections contracted in hospitals are not primary-coded as septicemia.)

The opportunity for you would be to highlight hospitals within your network that agree to a list of specific items that make up a never-events policy. “Highlighting” might include waived deductibles or co-pays for employees who choose highlighted hospitals over others, thus noodging more employees to safer hospitals.

What is included in a “never-events” policy?

The Leapfrog Group, which is the nation’s leading arbiter of hospital quality, has a policy that requires hospitals to undertake five steps following a never-event:

  • apologize to the patient;
  • report the event;
  • perform a root-cause analysis;
  • waive costs directly related to the event;
  • provide a copy of the hospital’s policy on never-events to patients and payers upon request.

Examples of never-events culled from this complete list are:

  • Certain hospital-acquired infections/septicemia
  • Wrong-site/wrong surgery/wrong patient
  • Objects left in body
  • Wrong blood type administered
  • Serious medication errors
  • Air embolisms
  • Contaminated or misused drugs/devices
  • Death

Any given never-event is rare, but in total 5% to 10% of inpatients suffer a significant adverse event during their stays. The consequences – in cost, suffering and lost productivity – could be substantial.

No need to take my word for the cost: The Leapfrog Group provides a Hidden Surcharge Calculator that can be used to estimate the financial impact of hospital errors.

Do hospitals in your network have a never-events policy?

At the very minimum, by default they have such a policy for Medicare, which doesn’t pay extra for certain never-events. Medicare still pays the standard diagnosis-related group (DRG) case rate but doesn’t reimburse “outliers” separately if the added hospital time was caused by a never-event. Obviously, the DRG rates are set a little higher to begin with. So hospitals that do a good job – typically Leapfrog-rated “A” and “B” in the Hospital Safety Score report – embrace this payment scheme, while others would have been better off getting paid the old-fashioned way.

Some hospital systems extend this policy to employers – or will, if you or your carrier ask and you are a large enough customer, and their quality is high enough that the economics work out for them.

Leapfrog A-rated hospitals are therefore the most likely to be willing to negotiate a never-events policy for your employees. These hospitals aren’t necessarily the name brands in your marketplace. In Washington, for example, Virginia Mason Medical Center (VMMC) is the hospital consistently earning the highest Leapfrog scores. Not surprisingly, it was among the first hospitals in the country to offer a never-events policy to employers. The hospital was highlighted in Cracking Health Costs for its many best practices. VMMC is one of the few hospitals that Walmart, Lowes and other jumbo employers will actually fly employees into, to ensure the best care. And yet you’ve never heard of VMMC, have you?

So what should you do?

You still need to offer a wide local hospital network to employees. It simply isn’t worth the inevitable pushback to require a narrow hospital network.

Instead, just ask existing network hospitals to offer you a never-events policy, or let you become part of a policy they already offer to employers. There is plenty of precedent of this. For years, the state of Maine has tied hospital payments for its own employees to quality and safety standards, including Leapfrog standards. And Maine, despite being among the poorest states, consistently ranks #1 or #2 in Leapfrog quality ratings. Coincidence? I think not. Particularly if you can contract in conjunction with your local business coalition, you have the chance to influence hospital safety, just like Maine did.

Additionally, you can follow the lead of those other jumbo employers named above and contract with the country’s safest hospitals for any employees who wish to make the trip. Yes, I know, you aren’t a “jumbo employer.” But a firm named Edison Health helps small employers with the contracting and logistics of such arrangements. It also offers a tool, validated by the Validation Institute, to help you figure out if medical travel would be a worthwhile endeavor for you.

This type of contracting requires a little work on your end, but if all you want is discounts and coverage and don’t want to put in the work, you could punt to an exchange. On the other hand, you self-administer your health benefit for one good reason: to influence employee health, and this is a clear opportunity to do so. By contrast, wellness is a LOT of work…and likely increases your costs in the short run. Wellness will take years to pay dividends, if any, whereas you can start influencing employee hospital choice immediately.

How to Avoid Paying for Hospitals’ Errors

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.

The Most Dangerous Place In The World

One Friday afternoon three years ago, Harvard Professor Ashish K. Jha found out his father had been taken to “one of the most dangerous places in the world.” Knowing as I do the energetic and courageous Professor Jha, I pictured a more senior version of him sky diving or climbing Mt. Katahdin. Unfortunately, the reality was far more banal, though still dangerous — Dr. Jha's father was taken to an American hospital.

The good news is Dr. Jha's father made a full recovery after only a few days in the hospital. The bad news: at least three potentially harmful errors occurred during those days. “On Saturday afternoon, he was given an infusion of a medicine intended for another patient — an infusion that was stopped only after I insisted that the nurse double-check the order,” recounts Dr. Jha. “After she realized the error, she tried to reassure me by saying, 'Don't worry, this happens all the time.'”

Indeed, Dr. Jha agrees this “happens all the time,” but it's not reassuring to him at all. In addition to being a concerned son, the professor is an expert in patient safety. He knew only too well the dangers his father faced — the legions of rampant errors, accidents and infections in hospitals throughout the United States.

The safety problem is an open secret among people in the health care industry. “When I tell this story, most of my colleagues shake their heads, but they are rarely surprised. We have come to expect such failures as a routine part of health care,” says Dr. Jha. The statistics are staggering. Each year, one in four people admitted to a hospital suffer some form of harm, and more than 500 patients per day die.

Dr. Jha has three recommendations. First, he calls for a better approach for tracking harm in the hospital. For a variety of reasons, this is not as easy as it should be.

Second, he says that hospitals need to feel the financial consequences of providing unsafe care. “A large proportion of hospitals have not adopted cheap and easy interventions that substantially reduce harm,” he points out.

Why is this? For one thing, the financial incentives aren't there. Most hospitals get paid for all the work they do, regardless of whether it helped or harmed the patient. The more they do, the more they make. There have been efforts to address this nonsensical financing system by paying hospitals for achieving the right outcomes for patients, including in the Affordable Care Act. But a recent study by Catalyst for Payment Reform found that only 11 percent of payments to hospitals or doctors are in any way dependent on good quality or safety.

Professor Jha's third recommendation is to create accountability for patient safety: “Senior health care leaders have to feel that their jobs depend on delivering safe care.” I would add another level of accountability implied but not stated in this recommendation: accountability to the American public. Hospital performance data should be publicly available to consumers, so we can choose doctors and hospitals with the best records. Hospitals that fail should lose market share. Last year, my organization, The Leapfrog Group, initiated one such effort, the Hospital Safety Score, a letter grade rating the safety of 2600 hospitals, which Dr. Jha advises us on. The Score is available to the public for free on our website or as an app, and it holds promise for driving a new market for safe care.

The Hospital Safety Score is useful to consult before you or your family members are admitted. But what should you do when you're already in the hospital and worried sick? Every hospital inpatient in America should navigate right now to this just-published AARP Magazine article and its virtual hospital room. The magazine noted features used in safer hospitals that all of us should look for in our own hospital. Among them:

  • readily available faucets with infrared lights that remind people entering the room to wash their hands when they see a patient;
  • IV poles, bed rails and faucets made with copper alloys, which prevents transmission of germs;
  • sensors that alert nurses when patients are attempting to get out of bed;
  • linen closets designed so staff can replenish supplies without having to enter the patient's room, which minimizes the spread of infection and disruption of the patient's rest.

The article also notes how safer hospitals use electronic systems for managing prescriptions — the best known way to prevent the kind of error Dr. Jha encountered during his father's hospital stay.

No doubt hospital leaders will read the AARP coverage without much surprise; all of this is well-known among clinicians and taught and studied throughout the health sciences. The premier textbook on patient safety advises most of what AARP found in its observations of excellent hospitals. Yet, too many hospitals still don't have the right precautions in place, and most consumers don't know to look for them. Until families make it clear to hospitals that safety matters to us, none of us, not even Harvard professors, can depend on safety when the ambulance arrives.

This article first appeared on Forbes.com.