When Medicare sneezes, hospitals do more than just catch a cold. The federal program pays about 40 percent of the nation's annual hospital bill.
But starting in October 2008, Medicare will stop paying hospitals for infections or injuries that occur in the hospital. Under new rules published Wednesday, Medicare will soon stop payment for at least eight conditions, including common hospital-acquired infections, blatant surgical errors, and injuries that result from a fall.
Medicare's Herb Kuhn says that Medicare specifically chose conditions that hospitals can prevent. He hopes the financial disincentives will force hospitals to change the way they do business. The hospitals are forbidden from passing the additional costs on to patients.
"Over the last few years, I don't think hospitals can assert anymore that they deliver high-quality care. They need to demonstrate it," Kuhn says.
But the hospital industry has doubts about the new rules.
"The concept of a payment policy that supports quality and safety is something that we support," says Nancy Foster, who handles quality and patient safety issues for the American Hospital Association. "Whether this particular policy is the most effective way of altering payment to help induce a higher-quality care is a question that I think we need to ask."
One problem, Foster says, is that hospitals don't know how to prevent certain things — like falls.
"People may wake up in the middle of the night, need to use the restroom, not remember that the nurse instructed them to call for help first — or think they were OK, go to stand up and find out that the surgery they had has weakened them so that they are unable to support their own weight and fall to the floor and be injured," Foster explains. "No one wants that to happen. We just don't have a perfect strategy to prevent it."
Foster also says that it may be hard to implement the rules. For example, starting in October, hospitals will have to check for certain infections in every Medicare patient coming into the hospital. That's the only way to know whether those infections started in the hospital. But Foster says getting that information from a patient being admitted through the emergency room might not be appropriate:
"They're in a great deal of pain, struggling to get their breath. They're scared because it's a life-threatening condition. Is that the right time to focus on determining whether they have a urinary tract infection?"
Lucien Leape of the Harvard School of Public Health, thinks that the changes are long overdue. Leape is one of the top experts in patient safety and an author of the 1999 report from the Institute of Medicine that documented the depth of the medical-error problem.
Back then, Leape says, "We really didn't know much specifically about what we should do. It was, 'Hospitals ought to do something.' But it wasn't quite clear what it was."
Today, he says, dozens of safe practices have been developed to prevent such errors. But he says there hasn't been enough of a push for hospitals to put them into use.
"I think it's fair to say that progress in patient safety up to now has relied on altruism. It's been largely accomplished by good people trying to do the right thing," Leape says. "And what we're saying is that hasn't gotten us far enough, and now we'll go to what really moves things in our society, which is money."
And it's not just Medicare. If the new program proves successful, private insurance companies are also likely to start refusing to pay for medical mistakes.
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