In The Race For 'Fanciest Hospital In Town,' Patient Safety Loses Out

Did you hear about the hospital that spent $100 million to eliminate medical errors? Or the large healthcare system that guaranteed patient safety, fully compensating any patient who was harmed?  You might have missed these stories because, as far as I know, they didn’t happen. But as hypothetical scenarios they make an interesting contrast to two recent real news stories.

The first, reported in The New York Times, describes how hospitals are investing tens, sometimes hundreds, of millions of dollars upgrading their amenities: nail salons, around-the-clock room service, spas, concert pianists in the lobby, etc. The article includes a photo quiz, testing the reader’s ability to tell the difference between a hospital and a hotel. (I didn’t fare very well.)

The second story, from NPR and Propublica, focuses on the number of Americans killed each year due to medical errors. A decade ago, the Institute of Medicine estimated that the number was around 100,000 each year. Now, a new paper in the journal Patient Safety estimates that between 210,000 and 440,000 Americans die each year, at least in part, due to medical errors. That would make medical errors the third leading cause of death in the U.S., behind heart disease and cancer.

To be sure, many patients were already sick. The error either made their condition worse or created new problems (such as hospital-acquired pneumonia for the patient undergoing hip surgery).

So while there is some debate about how to account for those patients, there is no controversy about this: Medical errors are a major cause of suffering and death across America (and the world). These errors are often preventable but get little attention.

How did we end up with a system where hospitals make big investments in nail salons and flat screen TVs but little on making care safer?

So how did we end up with a system where hospitals make big investments in nail salons and flat screen TVs but little on making care safer? Simple. It’s the sensible thing for hospitals to do. As businesses, hospitals have to meet payroll, maintain facilities, and attract top talent. Investing in patient safety is not a financial winner. People have called on hospitals to “do the right thing” and invest in patient safety, but understanding why hospitals behave the way they do, and what we can do to change their behavior, would be far more effective.

Currently, improving patient safety requires real investments of time, effort, and money with little payoff. Yes, some patient safety interventions are cheap (like washing hands) but others are expensive (such as redesigning intensive care unit management). Investing in these efforts save lives, but they can also reduce revenue. Asking hospitals to engage in efforts that increase cost, reduce revenue, and ultimately hurt their bottom line? Sorry, but that’s a pretty hard sell.

Investing in hotel-like amenities, on the other hand, can pay off handsomely. The Medicare Value-Based Purchasing program puts a small amount of money (currently, 0.4 percent of Medicare payments) on the line for hospitals that have poor quality healthcare. Although it pays minimal attention to the epidemic of deaths from medical errors, it does include hospital performance on patient experience surveys. It has even gotten some hospitals to pay attention to customer service. But the bigger payoff comes when negotiating with insurance companies. Hospitals want to keep their beds full and extract the highest prices they can. The fanciest facilities become the “must have” in any insurance network. Insurance companies have a hard time getting and retaining customers if their network excludes the hospitals with beautiful lobbies, nice salons, and great food. So, we now have an arms race — who can be the fanciest hospital in town. There is no race for who can be the safest hospital in town.

The challenge of poorly aligned incentives was brought home for me in a recent conversation with a CEO of a large hospital system. His board, made up of caring, committed people, usually approved small investments in safety. But when he wanted to do something big with a potentially large financial downside, the resistance was stiffer. During a particularly tough financial year, he proposed a pricey but highly effective program to reduce medication errors: having pharmacists round with every medical team. When the finance department calculated the impact on the bottom line, his board said no.

We now have an arms race — who can be the fanciest hospital in town. There is no race for who can be the safest hospital in town.

So what’s our bottom line? Until we make it financially smarter to reduce medical errors, we are not going to make serious progress. Unfortunately, neither insurance companies nor the biggest payer in America, Medicare, is signaling any meaningful efforts in this area.

The solution is reasonably straightforward: first, Medicare should require that every hospital systematically collect data on medical harms and report it publicly. Second, payers should not pay for any hospitalization where a patient is hurt from a preventable medical error. Businesses generally don’t send you a bill when they screw up and nor should hospitals. Until this happens, we shouldn’t expect to see any headlines about the millions being spent to ensure that when you go to the hospital, you get the care you need and make it home safely — with or without a pianist playing in the lobby.

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