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Wednesday, May 18, 2005

Insurance reimbursements lead to medical errors

[Elizabeth Weise, "Medical errors still claiming many lives," USA TODAY, 18 May 2005.]

Third-party payment for health care leads to a host of perverse incentives and unintended consequences. A new study now links this payment system with medical errors:

As many as 98,000 Americans still die each year because of medical errors despite an unprecedented focus on patient safety over the last five years, according to a study released today.

Significant improvements have been made in some hospitals since the Institute of Medicine released a landmark report in 2000 that revealed many thousands of Americans die each year because of medical mistakes.

But nationwide, the pace of change is painstakingly slow, and the death rate has not changed much, according to the study in The Journal of the American Medical Association.

The researchers blame the complexity of health care systems, a lack of leadership, the reluctance of doctors to admit errors and an insurance reimbursement system that rewards errors — hospitals can bill for additional services needed when patients are injured by mistakes — but often will not pay for practices that reduce those errors.

"We really need to rethink how we pay for health care. What we do now is pay for services, but what we should do is pay for care and outcomes," [says study co-author Lucian Leape of Harvard's School of Public Health.]


The good news is that as consumer-driven plans such as HSAs become more prevalent, payment will begin to shift to being input rather than outcome-oriented.

[Richard B. Warner, MD, "How Would You Like Your Medicine?," The Flint Hills Center for Public Policy, 24 July 1999.]

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