Quality doesn't have to be a cost center

January 12th, 2015

Last week, JAMA ran a well-done (and by now, widely publicized) study that showed hospitals actually have larger profits when surgical patients have complications – particularly if the patient has private insurance.

The New York Times jumped on this with an article with this inflammatory headline: “Hospitals profit from surgical errors, study finds.” Other news outlets soon followed suit.

In all the coverage I’ve seen, the researchers have been quick to note that they don’t think anyone’s screwing up surgeries on purpose to drive up profits. But they’ve made the point pretty clearly that their data illustrate that in some cases, there are perverse incentives in place that don’t reward healthcare providers for reducing the risk of medical errors.

As I’ve stated before on this blog, I’m a big believer that things don’t change on a large scale in health care until reimbursement changes. With healthcare reform, we’re starting to see some movement in that regard, and even many private insurers have been exploring pay-for-performance and other models that reward higher-quality care, error reduction, and preventive health services. We aren’t all the way there yet, as the JAMA study demonstrates, but I think we’re getting closer.

The last thing I want to see is healthcare decision-makers using this study to justify curtailing quality improvement efforts, but it could happen. Last week, Evan Albright wrote about the study in Forbes, concluding, “Hospitals will take a financial hit (and in many cases a substantial financial expense) with every initiative that improves quality even by a small percentage.”

I don’t believe that, and I hope any hospital board members out there reading this don’t believe it either. It’s important to root out instances in which payment reform is necessary, but it’s going too far to claim that quality improvement is always a money loser. There is a business case to be made for how quality improvement can improve the financial health of hospitals – even in the current payment environment – and it’s up to quality professionals to make it.