Each hospital's grade is based on Leapfrog's 26-part algorithm that includes such quality measures as mortality rates after surgery, rates of infections, pressure ulcers, or avoidable surgical lacerations, and whether the hospital has installed a physician computerized order entry system (PCOE).
The cost of each medical error is calculated using federal equations prepared by the Agency for Healthcare Research and Quality and the Centers for Medicare & Medicaid Services, which are considered valid, Binder says.
A patient who develops a central line-associated bloodstream infection generally requires another 10 days of hospital care. Those costs, Binder says, are embedded in the rates hospitals charge each health plan, which hides those costs in the contract rates it charges employers.
"I think employers will want to use this tool to get a general sense of the hidden surcharge they're paying," says Binder, whose organization represents 45 large employers or business coalitions that employ 32 million people.
She likens the hidden surcharge of treating medical errors—for example removing sponge left behind during surgery and treating subsequent infection—to "paying $5,000 more for a car that is not as safe, which is ridiculous."
"When they look at these raw numbers and see, I think this is going to be a shock to purchasers and employers—people outside of healthcare"—that this practice goes on, she said.