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The Other Kind of Quality Costs

Jay Moore, for HealthLeaders Media, March 5, 2009

Improving quality costs money. A lot of it.

Not improving quality costs money. A lot of it.

This could get complicated. Let me try it this way:

Just in case you've been a.) unconscious; b.) pinned under a heavy object; or c.) both, for the past couple of weeks, we have a $787 billion stimulus package on our hands—the American Recovery and Reinvestment Act of 2009. Within that sweeping package is more than $19 billion dedicated to healthcare information technology adoption.

But you know this. Some of my HealthLeaders Media colleagues have already offered insightful analysis from a variety of angles, anyway. So I'm not going to spend a lot of time talking about whether electronic health records can improve quality, or whether this legislation helps eliminate many providers' financial excuse for not adopting EHRs, or whether questions of interoperability, practicality, and provider culture mean this problem is about more than just money. Although they can, it does, and they do.

In short, there's been considerable talk about how quality improvement can be a monumentally expensive proposition. But what about the costs of inaction—of failing to make patients safer and care more effective?

When patients are harmed or even die because of something that happens to them within the walls of the hospital, that's a human cost that transcends money. But there's a financial price, as well. An Agency for Healthcare Research and Quality study published in the journal Health Services Research found that potentially preventable medical errors occurring during or after surgery may cost up to $1.5 billion a year. In using 14 AHRQ patient safety indicators to identify medical errors among more than 161,000 surgical patients, the authors found that additional expenditures likely due to the PSIs ranged from $646 for problems like accidental laceration to as high as $28,218 for acute respiratory failure.

Twenty-eight grand is a lot of money for a medical mistake when you start doing the math and extrapolate the data to a national annual level. Also, the study found additional costs in numerous other areas when associated with medical errors. Some examples:

  • Nursing care—33% higher costs than patients who did not experience an error.
  • Metabolic problems—32% higher costs.
  • Blood clots or other vascular or pulmonary problems—25% higher costs.

Many of you may not be all that surprised by such numbers. But to me, an even more significant finding of this study is that one-third of the patient deaths attributable to preventable errors occurred after the initial hospital discharge. In other words, the costs—both human and financial—continue to accrue after the patient has left the hospital.

The umpteen-billion-dollar question, of course, is whether EHRs—even if the stimulus package actually does clear the way for their implementation—can reduce those costs in the revolutionary way proponents contend. The fact is, no one knows the answer to that question. Not really. But I do think focusing exclusively on the price and pitfalls of technological advancement is missing part of the cost equation—and that the paralysis that can result from examining the complexities of potential solutions is not an answer.

At stake is not only organizations' financial health, but human lives and, ultimately, the future of an entire healthcare system. So I will continue to watch as this $19 billion attempt at a solution unfolds. What do we have to lose besides everything?


Jay Moore is managing editor for HealthLeaders magazine. He can be reached at jmoore@healthleadersmedia.com.
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