When Hospitals Botch Things, They Profit: Study

Hospitals are literally profiting from their own mistakes. A new study of 12 hospitals found they made an average of $30,500 more when a patient had preventable surgical complications, because insurers pay for the longer stays and extra care that ensue, the New York Times reports. The researchers emphasize that they don't believe hospitals are deliberately screwing up to make money, but a system with an economic disincentive to make improvements is problematic. "We said, 'Whoa, we're working our tails off trying to lower complications, and the prize we're going to get is a reduction in profits,'" says one author of the study, published yesterday in the Journal of the American Medical Association.

The study analyzed 34,256 people who had surgery at the hospitals in 2010. Of those, about 5% had preventable complications like blood clots and infections, and their median length of stay (two weeks) was four times longer than those without complications. The authors say insurers need to stop paying for preventable mistakes and offer bonuses for above-average care. Reforms are already under way, but "90% of the country is still functioning in the world we describe in the paper," another study author tells NPR. "It's just more evidence that payment reform is key to health care reform." (More hospitals stories.)