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Gawande: Hospitals Profit When Surgeries Go Wrong

Cheryl Clark, for HealthLeaders Media, 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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4 comments on "Gawande: Hospitals Profit When Surgeries Go Wrong"


16788044 (4/18/2013 at 12:37 PM)
No kidding, the doctor has to do more work because of a complication and additional revenue is generated, who would have thought. Why is this article is printed, it doesn't take a genius to see this risk. So what's the solution, all procedures have to be taped and review to ensure doctors are not be unethical. Come on, this risk has always been there and always will be. Are there doctors that take advantage of this, yes, and again, there always will be. Do the vast majority of doctors have the ethical sense not to do this, yes, and they always will.

Naomi Price (4/17/2013 at 7:52 PM)
What a cascade of horrors. It's good that your surgeon has been kind and compassionate and that your hospital at least apologized. However, it's impossible to know from your comment, at least, the source of the infection. It could trace to the surgeon. Or not. I do hope you continue to improve and that your knee replacement goes well. As for "paperwork" interfering with safety, what kind of paperwork interferes with hand hygiene? With use of surgical checklists, each and every time? With CLABSI prevention protocols? With attention to environmental cleaning? With pre-surgery MRSA screening & education of patients? With VTE & DVT protocols? This study dealt solely with surgical/post-surgical care, nothing else.

Tara Bukowsky (4/17/2013 at 12:12 PM)
Approximately a year and a half ago, I underwent a simple knee arthroscopy for a torn medial meniscus at Cox Walnut Lawn in Springfield, Mo. Following surgery, I developed a severe enterococcus hospital acquired infection deep in the joint resulting in septic arthritis. Five additional surgeries, 2 inpatient hospitalizations, drains, a picc line, seven weeks of IV antibiotics, a DVT, Lovenex injections, home health nursing and months of lab draws were required to treat the infection. I lost my job and my health care coverage as a result of this ordeal. The hospital billed my insurance company (that I had at the time), then balance billed me. My surgeon, who I feel was not responsible for this infection in any way not only saved my life, but remained compassionate and supportive throughout this entire ordeal. I do feel though that the hospital was responsible, but they feel differently and have offered an apology for the immense physical, emotional and financial strain this has placed on me and on my husband. I have remained under care, still unable to work and now require a total knee replacement. The hospital could have responded to my repeated requests to assist with some of the financial burden, but said I was a "statistic" and they felt that I had not received improper care. My care was appropriate for the circumstance, but was required due to an event that should never have occured in the first place.