[HSF] RES: [OT?] Why should Health Purchasers pay for the cost of complications?

Thu Oct 4 18:15:07 EDT 2007

Sorry, 
Computer was wiser and faster than me to send the unfinished message.
All that I say was with all doe respect.
Tea as always thinks and writes better than me. Congratulations
Theofilo Gauze

-----Mensagem original-----
De: openheart-l-bounces at lists.hsforum.com
[mailto:openheart-l-bounces at lists.hsforum.com] Em nome de Tea Acuff
Enviada em: quinta-feira, 4 de outubro de 2007 16:50
Para: OpenHeart-L at lists.hsforum.com
Assunto: Re: [HSF] Why should Health Purchasers pay for the cost
ofourcomplications?

The analysis is more complex than average cost. Businesses are and
rationally should be very risk adverse. Risk in this sense is not high or
low risk patient, but the possibility that low (or not so low) probabilities
may occur and wipe out all incentive. This is how insurance came into
existence years ago from shipping companies that might lose the whole ship
and all supplies which limits who will be in the shipping business at all.
This factor is independent in that even if everything else about the
business plan is excellent it may still occur. The rational solution for
your (or rather CMS) proposal is for hospitals to buy "poor out come"
insurance. This is another level of cost that is not directly for patient
care. It clearly is not the same thing as reducing the reimbursement by $500
verses $2500 dollars up front which is a repetitive cost. For a small
program or small shipping company this risk is potentially a prohibitive or
limiting viability
 for the business. But that is exactly the push from govenment and big
programs. And why I distrust both.

tea

tea

----- Original Message ----
From: Ani Anyanwu <anianyanwu at hotmail.com>
To: openheart-l at lists.hsforum.com
Sent: Thursday, October 4, 2007 2:14:43 PM
Subject: RE: [HSF] Why should Health Purchasers pay for the cost of
ourcomplications?

But that is exactly what should happen - hospitals that have high
complication rates or that cannot figure out ways to curtail complications
and their costs will go out of the business of treating high risk cases.
They can focus on ambulatory surgery and low-risk inpatient surgery where
risk of such complications is high. Those hospitals that can figure out ways
to keep complications down and keep costs down when the complications occur
will flourish. That is what happens in any other economy.

It is simple. For example if you earn 5000 dollars for each cataract
operation you do then you keep aside 100$ to cope with complications. If you
have one infection in 500 and this costs $30,000 to mange then you are fine.
If on the other hand you have 15 infections then you have a big financial
problem. Current reimbursement systems allow both of these examples to be
equally profitable even though one is doing a much worse job. This is how
all insurance based businesses work - you keep aside some of your profit to
deal with the setbacks. 

Say if you are an airline you set aside certain amount to deal with
compensating passengers for flight cancellations and delays. The onus will
then be on you to keep this number down to the bare minimum the number of
cancellations and bumps (by good planning, equipment maintenance,
efficiency, customer service etc) to maximize profit. You could not argue -
as physicians do - that the costs of cancellations arising from your
inefficiency or poor quality should be paid for by the government or
customer. If you cannot, or refuse to keep the cancellations down, then you
should not be in the business of selling air transportation - you could for
instance sell newspapers instead where risks are low. 

Hal surprises me when he says he will not take one or two patients because
of a 2% infection risk (I actually do not believe he would take this stance
when he thinks about this more). All Hal's hospital needs to do is to factor
the cost of treating these infections in their budget (just like they factor
unforeseen legal costs for example). Hal is actually a beneficiary of these
market forces even if unwittingly so. Part of the reason why Hal is very
busy with high-end complex cases is because he is doing (at high quality and
low risk) the cases other surgeons cannot do or refuse to do. The same would
apply if CMS refused to pay for any complications - surgeons and hospitals
that figured ways of treating high risk cases with low morbidity will
flourish and others will struggle or perish. The patients will be better of
because they will be left with fewer hospitals offering services at higher
quality.

Mind you I am not necessarily giving my opinion here just explaining that
this makes a lot of sense from the perspective of the health purchaser,
health policy maker, and the patient.

Shoot me....

Ani

> Subject: RE: [HSF] Why should Health Purchasers pay for the cost of
ourcomplications?> Date: Thu, 4 Oct 2007 07:54:20 -0700> From:
ecdouville at orclinic.com> To: OpenHeart-L at lists.hsforum.com> CC: > > Ani, I
respectfully disagree. It is one thing to insist on excellent mortality
statistics; there was the long standing worry about denial of care to high
risk patients. The shifting of risk to out of state hospitals was one
documented side effect of this. Once you get in to $100,000 of free care for
an unavoidable, albeit rare, complication, I believe you then force a
dialogue between hospital leaders (business folks) and physicians, which
will unavoidably lead to denial of care to higher risk patients, not as much
for death, as for complications.> Maybe it is ok, as long as it is someone
else?> > ________________________________> > From:
openheart-l-bounces at lists.hsforum.com on behalf of Ani Anyanwu> Sent: Wed
10/3/2007 5:34 PM> To:
 openheart-l at lists.hsforum.com> Subject: RE: [HSF] Why should Health
Purchasers pay for the cost of ourcomplications?> > > > I think this issue
of Medicare not 'paying' for mediastinitis is being looked at the wrong
way.> > Medicare is not refusing to pay for a complication per se - what is
happening is that they are penalizing (fining) hospitals for complications
that occur. This then provides an incentive for hospitals to reduce their
complication rates. Similar approaches have been used in the British
National Health Service with hospitals fined, or subsidies deducted, if they
did not meet specific Department of Health quality targets.> > Hospitals
will still get paid for doing the procedure but what it means is hospitals
with high complication rates will have higher unreimbursed costs. There is
nothing wrong with this situation per se as it exists in most walks of life
- people who provide less quality service or inferior goods get penalized
 financially and people or products which deliver higher quality service
cost more to purchase. Health economists will have no problem at all with
this. Indeed they would wonder why, for example, a hospital with a 5%
mortality rate, one with a 10% infection rate, one that transfuses 70% of
patients should all be paid the same for a CABG as one with a 1% mortality,
0.5% infection and 10% transfusion rate. The present state of affair where
there is uniform reimbursement for all manners of delivery of health care is
scandalous. If you went to buy any other commodity you would not expect to
pay the same for products of such diverse quality. A car manufacturer could
not charge 20,000 USD for a car whose brakes failed every other day and
expect to stay in business, yet we would keep getting paid same for a
pneumonectomy, and feel we are entitled to be paid the same, even if all our
patients died or developed bronchopleural fistula.> > Of course I know I am
in
 the minority but changes like this are inevitable because the present
system of US healthcare funding and payment, and that of even welfarist
systems like the United Kingdom, and self-pay systems as in many less
developed countries, is not sustainable.> > Ani> > > > > From:
msfirst at gmail.com> Subject: Re: [HSF] post op mediastinitis discussion>
Date: Wed, 3 Oct 2007 00:18:27 -0400> To: OpenHeart-L at lists.hsforum.com> CC:
> > This is going to be a disaster. By not willing to pay for a problem, >
CMS thinks that the problem will go away. We think that these (and > other
major non-cardiac wound problems) will all end up at major > medical centers
because the primary surgeons will not take them back > (in part since they
and their systems will not get paid - and who can > blame them since we do
enough free work). Although, from what I > heard, you can still get paid for
someone else's problems - which > means all of the major medical centers
will get all of
 these patients > - gee, that sounds like a money saving plan. Who is going
to win > out? Of course the MedMal lawyers - that is a no brainer.> On Oct
2, 2007, at 11:47 PM, Douville, Chuck wrote:> > > This discussion is
relevant to our cardiac surgery colleagues > > around the world, although it
is a financial issue only in the USA. > > CMS (center for medicare
services), the agency responsible for > > medicare healthcare funding in the
US recently announced it would > > no longer pay hospitals for costs due to
postoperative > > mediastinitis in cardiac surgery patients effective within
the next > > year. Despite perfect glucose control, antibiotic timing etc,
my > > own recent morbidly obese re-do AVR pt had his chest open 7 hours > >
due to difficult adhesions. S. epi wound infection on day 6 > > required
opening his sternum, VAC therapy and IV antibiotics and an > > extra week in
the hospital. The only way to avoid the infection in > > this pt that I
 can think of is to deny the operation to a 60 yr old > > man with critical
AS after previous CABG 6 years earlier. I do not > > believe the incidence
of this problem can ever be zero. Thoughts?> >
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