Study Finds Hospitals Are Paid More for Worse Care

Little Rock   Atul Gawande is best known to many of us as a doctor who writes important articles about healthcare in the New Yorker magazine.  To his patients he is known as a good surgeon in Boston, and to other surgeons, he is also known as someone who advocates and develops simple checklists for other surgeons to run through to avoid stupid errors that can also mean life or death, big bills or small.   The checklists include things like double checking medicine reactions, patient identifications, and even the place on the body where the knife will slice. 

            The results are now being reported widely on an internal assessment using his checklists and looking at results, errors and costs in a chain of a dozen hospitals in Texas run by Texas Health Resources.   The complication rate was a bit over 5% of the cases (1820 out of 34256), which might not be that bad, unless it was happening to you or someone you know, I guess.  The bloopers though led to patient charges paid by insurance companies being an average of almost $50,000 rather than $20,000 without the complications. 

            So hospitals that messed up made more money.   The incentive system that so many believe is the iron law in all matters is that financial incentives should reward good care, rather than bad care, not the other way around.   That’s not the way insurance currently works.  And, here’s more bad news, a lot of what we are doing under the Affordable Care Act is dependent on these same insurers.   In fact in Arkansas with a number of Republican holdout states watching closely, the legislature is about to pass a form of this managed care that relies even more heavily on private insurance companies to run the show.  The incentive for politicians is that this kind of plan keeps the campaign contributions coming, but as we can see, the incentive for the rest of us seems to be longer stays in hospitals, assuming we live through it.

            It’s good to know they are studying all of this pretty hard, but I think we would feel a bit better if they were doing something more about it!

Audio Blog on Hospital Care


Jackson-Hewitt Figures Costs for Employers for State Refusals under Obamacare in Billions

New Orleans  Credit to where credit is due, you have to give the devil his due, Jackson-Hewitt, the tax preparers, performed a public service in trying to calculate what businesses are going to have to pay, partially as a result of recalcitrant, Republican denials of full coverage protections under the Affordable Care Act (ACA), and the price tags are in the billions.  I know Jackson-Hewitt well, having been out to the New Jersey suburbs to their offices to negotiate with them regularly when we were not meeting in Manhattan with their general counsel at their spaces near Times Square, and met with their folks from top to bottom to negotiate agreements to reduce the practices and the costs of refund anticipation products.

In the summary of their report they cite the cost to Texas to mid-sized employers with over 50 workers due to the Governor’s refusal to accept ACA at between $250 million and almost $500 million.  In just the 22 states where governors are denying health care, the estimated burn ranges from $800+ million to $1.2 billion.  Nationally all of the potential penalties could range several billion for employers.

Governors’ like Louisiana’s Bobby Jindal are clearly sweating the numbers because they have been pretending that all they were really doing was killing off more poor people by denying coverage expansion, and figuring that their base doesn’t really care so much about that, but these mid-sized businesses are their bread and butter.  Jackson-Hewitt called the Louisiana number for employer payments of penalties at between $51 million and $72 million.  Meanwhile in the Baton Rouge Advocate reports clearly on the dispute as Jindal’s head of Health and Hospitals tried to defend his claim that the cost would only be about 10% of what Jackson-Hewitt’s conservative numbers showed.  The Jackson-Hewitt spokesperson volunteered to meet with Jindal’s folks and show them the math, pointing out that they didn’t have a “dog in the race” because they actually make more money doing the tax returns for businesses having to pay the penalties.  What a painful irony this is!   Jindal’s guy tried to claim that he was sticking to his story, no matter what the facts were, which I read as him really saying that his own job depended on his “lying eyes” as Richard Pryor called it.

The piper is going to be paid by more than just poor people for this last stand at the schoolhouse by these governors.  Here are the Jackson-Hewitt numbers, and thanks again for them!