China plans a major revamp of its public hospitals as part of its long-awaited reform of the national healthcare system. Health Minister Chen Zhu said a key part of the reform will be aimed at changing the way hospitals make profits. "As China aims to provide universal medical service to 1.3 billion people, state-run hospitals must be overhauled," Chen was quoted as saying at a national health meeting. China's hospitals have been criticized for their lack of access, huge fees and poor doctor service.

Learn from your mistakes. That ubiquitous tenet of quality improvement theory inevitably surfaces in conversations between supervisors and subordinates, parents and children, coaches and players . . . and healthcare leaders and caregivers. That's the whole premise of adverse event reporting—to document errors and other flaws in patient care to help create safer practices and prevent those adverse events from happening again.

So do U.S. hospitals generally have adverse event reporting systems in place? Yes, according to an extensive new study. Are they actually using the data to effect improvements? Well, that's where the trouble starts.

The study, "Adverse Event Reporting Practices by U.S. Hospitals: Results of a National Survey," found that centralized systems for collecting reports on adverse events are almost universal—more than 94% of some 1,600 hospitals reported having such a system in some form. But the survey—funded by the Agency for Healthcare Research and Quality and conducted by researchers from AHRQ, the RAND Corporation, and The Joint Commission—also provided some less-than-encouraging findings:

• Although nearly every hospital reported having an adverse event reporting system, only 21% fully distribute and consider summary reports on the reported events.
• Slightly less than a third of hospitals have established environments that support adverse event reporting. The study defines a "supportive environment" as one that allows for anonymous reporting for all adverse event reporters and one that always keeps identities private for reporters who do choose to identify themselves.
• Only 13% have broad staff involvement in adverse event reporting. The study found that 96% of reports are submitted by nursing staff members.

The bottom line is that the "learning from mistakes" part of the equation is largely getting lost. "There's a lot of reporting going on, but not much being done with the information generated," says James Battles, PhD, senior service fellow for patient safety at AHRQ and one of the study's researchers.

OK . . . so why not? In a competitive healthcare landscape of increasingly savvy consumers—a landscape in which quality is supposed to be a market differentiator—why wouldn't a hospital want to actively utilize such data to improve its care processes, if only for its own self-interest? There are plenty of answers to that question, of course, but the overarching reason may be the most basic of all: fear.

"One of the big fears we get is that in many cases, hospitals have used event reporting for disciplinary action," says Battles. "We've got to create a more supportive environment where the information is used for learning, not for discipline or risk management issues." What's more, Battles adds, there's an "increased fear of sharing information that could be used against the institution."

One glimmer of hope in mitigating that fear, Battles says, may be patient safety organizations. In November, the U.S. Department of Health and Human Services published the final rule for the establishment of PSOs, initially authorized by the Patient Safety and Quality Improvement Act of 2005. The rule goes into effect later this month. PSOs are designed to remove the fear of disciplinary action or legal liability felt by both clinicians and healthcare organizations by providing a confidential place to which providers can report adverse events and other information for analysis. PSOs can then offer feedback to provider organizations for quality improvements.

Whether PSOs can significantly improve healthcare quality and safety remains to be seen. I suspect the reluctance to utilize reporting systems may be deeply ingrained in many cases, so the promise of anonymity and protection from sanctions may need some time to take hold. But even small steps toward a more productive use of adverse event data would be welcome. "The big push moving forward is how to make these hospitals' event reporting systems more useful as a learning tool," says Battles. "It shouldn't be just an exercise to fill a requirement of accreditation."

With patients already facing out-of-pocket healthcare expenses ranging from $20 copays with traditional insurance to $3,000 deductibles with some consumer-directed plans—assuming they're insured at all—a fragile economy will make it even more difficult to get patients in the door.

As a result, "we will see many boutique practices and medi-spas folding or redesigning their business models," predicts Judy Capko, a California-based consultant and president of Capko & Company in Thousand Oaks, CA.

However, this does not mean the disappearance of the small medical group is imminent or even likely, experts say. Survival "is about being systemized, about giving care, and about using technology. A small group can be systemized using an electronic medical record just as well as a big practice," says Bruce Bagley, MD, the American Academy of Family Physicians' medical director for quality improvement.

"Technology will be the holy grail for financial survival of medical practices nationwide," Capko says. Although the tandem messages to invest in technology and control expenses may seem contradictory, they go hand in hand.

"EMRs are going to become the standard in order to practice good medicine—period," Bagley says. "It serves as the foundation for doing some of the information management that allows us to give better care."

So as patients and payers are increasingly seeking proof of quality healthcare, the technology required to capture quality and performance data will be a must.

In a similar vein, practices, particularly primary care, "are going to need to get on the office redesign bandwagon" to promote the primary care office as the medical home, Bagley says. To make the medical home concept work, enhance efficiency, and decrease repetition, specialty offices will also have to consider revamping their practices to support the team approach to care, better electronic access for patients, and better support for patient self-management, he says.