Study Implies Many Hospitals Have No Financial Incentive to Reduce Postsurgical Complications
April 24, 2013 | Strategic Insights for Health System
Depending on payer mix, many hospitals could potentially experience adverse near-term financial consequences for decreasing postsurgical complications, concludes a study published in the April 17, 2013, issue of the Journal of the American Medical Association. The study, which retrospectively analyzed the administrative data for all inpatient surgical discharges from a nonprofit 12-hospital system in the southern United States during 2010, found that, when compared with an absence of complications, complications were associated with a $39,017 higher contribution margin per patient with private insurance ($55,953 versus $16,936) and a $1,749 higher contribution margin per patient with Medicare ($3,629 versus $1,880). In contrast, procedures with complications paid for by Medicaid and self-payment were associated with significantly lower contribution margins than those without complications. For the hospital system studied, in which private insurers covered 40% of patients, Medicare covered 45%, Medicaid covered 4%, and self-payment covered 6%, the occurrence of complications was associated with an $8,084 higher contribution margin per patient and with a $7,435 lower per-patient total margin. The researchers mention that, although effective methods for reducing surgical complications have been identified, many hospitals have been slow to implement them.