Hospitals nearly triple their profits when they make surgical errors, compared to how much they make when patients don’t suffer harm, according to a new study published in the Journal of the American Medical Association (JAMA).
On average, the hospitals studied reaped an extra $30,500 in profits when a patient developed one or more potentially preventable surgical complications because insurance plans pay more for longer stays and extra care, the study found.
Some surgical mishaps boosted profits by up to $44,000 per patient, reported researchers from the Boston Consulting Group, Harvard, and Texas Health Resources, a large nonprofit hospital system.
“It’s shocking, crazy and perverse that hospitals are being financially rewarded for harming patients, while the prize for hospitals that are working hard to improve patient safety and reduce surgical errors is losing money,” says Barry Rosenberg, MD, a coauthor of the study and a partner in the Boston Consulting Group.
Lethal Hospital Mistakes on the Rise
In 1999, the Institute of Medicine published a report saying that hospital errors killed nearly 100,000 Americans a year—a rate of lethal medical harm comparable to four jumbo jets crashing each week.
Overall, an estimated 15 million Americans (out of 37 million who are admitted) suffer medical harm in hospitals annually, according to the Institute for Healthcare Improvement. Along with the human toll, hospital errors cost the healthcare system $17.1 billion a year, another recent study reported.
A System That Rewards Substandard Care