Wednesday, May 1, 2013

Complications and Profits

This paper from JAMA had the health blogosphere in a tizzy recently.  The Boston Consulting Group reviewed surgical discharge data from a 12-hospital system in the southern US to see if there was a "relationship" between surgical complications and hospital profits.  Their findings were obvious and unsurprising:
When a privately insured patient experiences one or more complications -- such as blood clots, stroke, infection, septic shock, pneumonia or cardiac arrest -- hospitals' profit margins are 330% higher compared to a patient with no complications, the report found.

For Medicare patients with complications, hospitals' profit margins are 190% higher, according to the report...
So if a patient develops a medical condition that requires further medical treatment with utilization of resources and involvement of other specialists then we are supposed to be astounded that the resultant costs will be higher?  This may sound controversial but who cares?  Why is this an issue? The problem is being painted as one of doctors expecting to be paid for doing the hard work of managing a surgical complication.  Complications are part of medicine, especially surgery.  A major part of what makes a good general surgeon is his ability to manage a difficult case, including the judgment as to when to return a patient to the operating room.  Anastomotic leaks in Crohn's patients on steroids will happen.  Bile leaks from the liver bed will occur at a fairly regular statistical probability.  Old ladies who undergo major abdominal resections will develop post op pneumonias despite the best preventative measures.    Sometimes you have to try to make a chocolate cake out of mud and stones.  You do the best you can.  Success is not measured in terms of cost overlays but as to whether or not you can get the patient from the ICU to a rehab bed in a safe, timely fashion.      

Barry Rosenberg MD sort of tip toes around the implications:
Hospitals make more money the longer a privately insured or Medicare patient stays, said Rosenberg, a partner with BCG's health care practice. As a result, they may lack financial incentives to take steps to reduce surgical complications, he said. 
 "Insurers are rewarding hospitals when there are complications," he said. "This is not the type of incentive you want ... in the healthcare system for your family."
So what do you mean by that Barry? 
 The report isn't suggesting that complications are caused intentionally, said Dr. Rosenberg, a co-author of the study. But he hopes the findings provoke discussion on the "absolute need for payment reform,"
Ah, that's nice.  He doesn't "believe" that doctors are causing complications intentionally in order to gin up a few extra buckaroos.  That sort of validation ought to set everyone's mind at ease.  Jesus.  Healthcare workers intentionally harming patients for cash.  It's like a plot line out of a bad Robin Cook novel.

What I would like to see is a discussion not so much on payment reform but on the baseline costs of healthcare.  Why do medical device companies operate at such obscenely high profit margins?  Why are the pricing data at large hospitals so shadowy and obscure?  Why can't Medicare negotiate reasonable prices with Big Pharm?  If the starting costs were a little more reasonable, then it wouldn't be so controversial for a physician to expect to be compensated for his/her work. 


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