Medicare Should Reconsider Its Approach to Improving Infection Control

By: Abhas Gupta

Several weeks ago, Bush administration officials announced their plans to revise Medicare policy to no longer cover hospital-acquired infections. Although a laudable step by the Administration, I feel the policy is designed to score political points more than actually reduce nosocomial infection rates.

The CDC estimates that every year, 1.7 million people develop nosocomial infections and almost 100,000 die from them. Having worked on the inpatient medicine floors of several hospitals now, I am struck by the disparities that exist in infection control practices between even affiliated hospitals. At one hospital, the attention to infection precautions borders on obsession--nurses repeatedly remind physicians and visitors to gown, de-gown, wash their hands, and disinfect their stethoscopes. However, the situation at an affiliate hospital is decidedly more lax. Caregivers and visitors frequently enter isolated rooms without the proper precautions and nurses reflexively insert Foley catheters on all of their patients. The cause of these startling differences is multi-factorial and may include arrogance or laziness of hospital staff, the lack of a rigorous infection control culture, infrequent screening on admission, and misaligned financial incentives (hospitals get paid for treatment, not prevention).

The change in Medicare policy presumably addresses the misalignment of financial incentives in infection control. The central idea behind the policy is that hospital-acquired infections will no longer be reimbursed, so hospitals will need to reduce infection rates or lose money. Unfortunately, I do not believe that hospitals will react in this way, at least in the short term. Instead, I suspect that they will do what they have been doing with lost revenue from the uninsured--shift costs by simply pricing their expected losses into private insurance billing.

I feel a more constructive policy change would incorporate at least the following elements:

• Allocate resources to monitor infection rates - the public should be able to monitor hospital rates to a) ensure that value is being generating from their monies spent, b) identify and address poor-performers, and c) create an avenue for patient and insurance provider pressure. Addendum: some twenty-two states have already introduced such legislation


• Provide appropriate financial incentives - this is hands-down the best thing we can do to address infection rates. Organizations respond better to incentives than deterrents, and we--the public--are willing to spend more to save lives. If a framework is already in place for monitoring infection rates, we can implement "pay for performance" type incentives. For example, a hospital that decreases its infection rate by 10% from one year to the next would receive a medicare bonus. This amount should be substantial enough to create a market for outside consultants that come in and introduce rigorous infection control practices


• Recognize differences in patient complexity - tertiary institutions can be expected to have higher rates than primary care centers. Therefore, tertiary centers should not be penalized disproportionately, nor should primary care centers be additionally compensated.


• Allocate resources for all parties in the care cycle - eradication of nosocomial infections will require cooperation from (and funding for) nursing homes, rehabilitation centers, ambulatory services, etc.


• Support a forum for sharing best-practices - the VAMC Pittsburgh has aggressively addressed hospital infection rates and has subsequently generated some impressive results in the past few years. All hospitals should benefit from their findings.

Addendum: Instituting a performance-based bonus would be expensive, but create tremendous value per dollar spent. Also, there would be significant savings recouped from decreased hospital stays. I haven't been able to find a specific number, but if the incidence of nosocomial infections is 1.7 million patients annually, the cost of poor infection control must surely be in the tens of billions.

Medical Errors: A Leading Cause of Death in the United States

By: Abhas Gupta

Even as medical students, we routinely observe errors being made by our mentors—the residents, fellows, and attendings charged with cultivating our professional skill. Many medical errors are caught later in the care-cycle and others persist undetected. From our vantage point, only rarely do these errors place the patient in severe discomfort and almost never do these errors result in a patient's death. On the contrary, a 2004 study conducted by HealthGrades indicates that the issue is much more grave than we think: preventable medical errors result in 195,000 deaths annually.

The cost of medical errors is equally alarming. Adverse drug-related events, on average, extend a patient's hospital stay by 4.6 days and increase a patient's hospital bill by $4,685. Post-operative infections can cost over $57,000 per patient and re-opened wounds can cost over $40,000 per patient.

Several studies indicate that the medical errors problem may be even worse abroad. "Adverse medical events are estimated to be between 10.6 and 16.6 percent in Australia, between 10 and 11.7 percent in the United Kingdom, and about 9 percent in Denmark, versus in the range of 3.2 and 5.4 percent in the United States" (Porter). This transnational discrepancy may be attributed to the aggressive malpractice litigation in the United States; however, such an environment promotes "doctors to practice 'defensive' medicine in the form of unnecessary tests, overdiagnosis, and redundant or unnecessary treatment", further driving up the cost of health care. The practice of "defensive" medicine is still unable to limit medical errors to an acceptable rate. Moreover, additional cost in the United States is not correlated with better quality. A 2006 study by the Pennsylvania Health Care Cost Containment Council showed a significant difference in fees for coronary bypass surgeries between small and large hospitals ($20,000 vs. $100,000, on average) with no significant differences in lengths of stay or mortality rates.

The factors contributing to the prevalence of medical errors are broad and largely structural. Our current system of care places a tremendous burden on physicians, making medical errors predictable but, fortunately, preventable. Correcting these structural flaws will require a dramatic change in the fundamental elements of our health care system. Some of the structural flaws in American health care are listed below:

• Inadequate financial incentives - provider reimbursement is presently based on services rendered, implicitly discouraging providers from improving quality and minimizing mistakes. A 1999 publication by the Institute of Medicine entitled, "To Err is Human: Building a Safer Health Care System", spurred an effort to reward quality called pay for performance. Although a step in the right direction, this effort is criticized as being "pay for compliance" (providers are additionally reimbursed based on government-defined treatment criteria) and does not do enough to spur improvement beyond the criteria


• Decentralized care - the divvying of care to general practitioners and multiple specialists inevitably introduces errors in the absence of a well thought-out system of interoffice communication. Moreover, patient charts can lack a consistent organizational structure. Important details can be easily obfuscated and identifying potential adverse effects is left to the capacity of individual caregivers. Electronic medical records coupled with intelligent (automated) warning systems could greatly minimize these errors


• Slow-adoption of clinical trials results - "it takes, on average, seventeen years for the results of clinical trials to become standard clinical practice" (Porter). Eliminating the disincentives to improve the quality of care will immediately improve the rate of adoption


• Poor standardization of care - in every other industry, repetition results in increased quality, increased efficiency, and decreased cost. Unfortunately, best-practices adoption in American health care is notoriously slow. The recent discussion of launching a national commission dedicated to disseminating best practices should significantly decrease the incidence of medical errors

Michel Porter accurately states that "attempting to require participants in the system to behave contrary to their interests is futile." As future physicians, our best interests are served by educating ourselves on the misaligned incentives in American health care and advocating for not just short-sighted, stop-gap measures but for long-term, effective change.

References:
1. Porter, M. E., Teisberg, E. O. Redefining health care: creating value-based competition on results. Boston, MA: Harvard Business School Press, 2006.
2. Gratzer, D. The Cure: How Capitalism Can Save American Health Care. New York, NY: Encounter Books, 2006.

The McKinsey Quarterly: 'Transforming US Hospitals'

By: Kurt D. Grote, Paul D. Mango, and Saumya S. Sutaria
Reviewed By: Abhas Gupta

This short article outlines preëmptive steps that hospitals can take to stave off competition and increase profits in the next decade. Before diving into the article, let's quickly outline the two basic approaches for revenue growth:

Increase margins
• Decrease operational costs (salaries, day-to-day expenses, etc.)
• Decrease supplier costs (medical devices, medical equipment, administered drugs, etc.)
• Lower malpractice insurance (improved service quality leads to decreased premiums)
• Increase reimbursement (the federal government is increasing reimbursements of top-performers thanks to an August '06 Executive Order)

Increase volume
• Capture larger market share (get more patients)
• Improve turnover rates in abundant service areas (many cardiologists have month-long waiting times for appointments; improving their turnover rates directly increases profits)
• Market directly to patients in consumer-driven services

One important caveat to hospitals increasing margins is that insurance companies would be inclined to reimburse less, so hospitals may actually have little incentive to improve on this front. Also, approaches to increase patient volume only apply to areas where competition for patients exists (urban hospitals, primarily). 'Transforming US Hospitals' identifies several best practices of hospitals around the country and predicts the changing landscape of the health care industry. The primary recommendations to hospitals include:

• Reorient operations along clinical-service lines -- these are essentially "focused factories" (see previous post), but are more applicable to a hospital setting. By dividing a hospital up into its clinical-service lines (diagnostic imaging, cardiology, orthopedics), management can more easily isolate low performers, adopt best practices within these divisions, and hold people accountable for poor performance


• Restructure relationships with physicians - physicians need incentive to modify their behavior for not just efficiency, but also costs (i.e. selecting cheaper devices, prescribing generic drugs, etc.). One important suggestion: give physicians lower than average base pay with performance pay "linked to metrics on quality, service, and cost"


• Commit to superior service and quality -- with increasing information about service and quality available to insurance companies and patients, hospitals will need to excel in order to attract more customers. Moreover, better quality service should result in lower malpractice insurance premiums


• Improve collection means - more and more medical services are being paid out-of-pocket each year; however, only 50-60% of patient charges are collected (compare this with 95% for the credit card industry). Hospitals need to either "learn from retailers about how to manage revenue cycles and improve collections" or partner with financial firms

As I mentioned in the first post, everyone in healthcare is looking for ways to cut costs. Physicians need to realize that performance-based pay is likely to become the standard compensation structure in the next decade. Therefore, it is imperative that physicians attain a basic knowledge of economic and management principles so they're not caught off guard. I will soon publish a series of posts entitled "Consulting Frameworks 101", so stay tuned.

This article can be accessed at McKinsey Health Care. Registration and subscription may be required.