Medicare is penalizing a total of 758 hospitals this year due to the hospital’s high rates of patient safety incidents. According to Medicare records, more than half of those same hospitals were fined last year as well. These penalties translate into Medicare lowering its payments by 1% over the course of the fiscal year (which runs through September 2016). This year’s penalties will cost hospitals around $364 million.
Medicare fines, created by the 2010 law, are estimated once the government gathers information on hospital’s frequency levels regarding infections, sepsis, fractures, among other complications. Although these fines seem like a reasonable way to monitor hospital’s patient safety, some argue that the fines only examine a limited amount of types of mistakes usually taking place in hospitals and additionally, that the fines are not large enough to truly affect and improve a hospital’s behavior. That said, Medicare has stated that in the future they plan to include more types of conditions and mistakes into the fines’ assessments. Moreover, hospitals that have been fined insist that these fines are counterproductive. The argument lies in that these Medicare fines are usually imposed against facilities that have in fact improved their patient safety incidence, but have been given any opportunity to catch up to other facility standards. The money they must spend paying off the government fines could be used instead to keep improving their health care services.
These fines are just one aspect of the health law’s mandate to improve hospital service quality. Aside from imposing fines based on high levels of patient safety incidents, Medicare reduces pay in hospitals that are experiencing large quantities of patients coming back within a month of treatment. Medicare also imposes other penalties based on patient satisfaction scores, death rates, and other performance measures.
One thing to note is that while Medicare may lower payments to penalized hospitals, it continues to execute payments to other hospitals based on the amount and the nature of the services conducted – a practice that some healthcare experts insist that encourages hospitals to partake in additional and unnecessary expensive procedures. According to Dr. Martin Makary, a pancreatic surgeon and researcher at Johns Hopkins Medicine who studies patient safety, “much of what we do in health care still has the incentives aligned the wrong way… For hospitals, complications are still profitable.”
So are Medicare’s hospital penalties worth it? Are these imposed sanctions efficient enough to monitor hospital behavior and actually improve it? Given that these fines are still considered recent, the verdict is still out. But one this is for sure, health care experts and regulators should strive to improve the established hospital laws and obligations because there is clearly room for improvement. As Dr. Ashish Jha, a Harvard researcher has stated, “The most common cause of problems in hospitals is medication errors, which remain absent from this program… Ultimately unless we get to clinically based, validated measures of patient safety, we’re not going to be able to move the needle.”