Gawande: Hospitals Profit When Surgeries Go Wrong

Cheryl Clark, April 17, 2013

Hospitals make a lot more profit when an insured surgical patient develops complications than when the procedure proceeds error-free, says a new study by Boston surgeon Atul Gawande, MD.

Hospitals also profit, though to a lesser degree, when complications occur in Medicare patients.

Gawande insists that hospitals are not making essential quality improvements to avoid complications, even though many strategies have been proven effective.

"It's no surprise that they [hospitals] have not made the major kinds of investments in quality control that you might expect, given these kinds of cost figures we're seeing," says Gawande, of Brigham and Women's Hospital and author of numerous books and articles on healthcare improvement.

Gawande emphasizes that he doesn't think hospitals or doctors are deliberately causing their patients to have complications so they can bill for more reimbursement.

"I know of no hospitals that are deliberately accepting or provoking complications for the sake of profit," he says. He adds that until now he's "not sure anyone, even the hospital systems themselves, really understood the financial magnitude of the profit margins that come from these complications."

The report, published in Wednesday's Journal of the American Medical Association, was prepared by Sunil Eappen, MD, Gawande and others. It analyzed 34,256 surgical discharges from an unidentified 12-hospital system in the southern part of the country.

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