Medicare tightening the screws on medical mistakes

Three years ago, a Minnesota health insurer said it would stop paying for things that should never happen to patient in a hospital, such as leaving a sponge in the body after surgery.

The move by HealthPartners sparked an uproar. Hospitals complained that it would discourage staff from reporting errors. Patients worried they'd be hit with a fat bill if the insurer refused to pay.

Now Medicare officials are taking a leaf out of Bloomington-based HealthPartners' playbook. Starting next year, the Centers for Medicare and Medicaid Services (CMS) will stop paying for eight hospital-associated conditions widely seen as preventable.

Medicare not only is rolling out the controversial concept nationwide, it's including common hospital infections that affect a much wider swath of patients. The money Medicare hopes to save isn't a lot -- just $20 million a year from its budget of $400 billion. But it's a significant shift from the usual tactic of paying hospitals and physicians bonuses for sticking to medical guidelines and may prod private insurers to follow suit.

"We see this as a marker of success, that our policy on this raised awareness nationally," said Babette Apland, senior vice president for health and care management at HealthPartners.

Some unusual conditions in Minnesota prompted HealthPartners' action. In 2004, Minnesota was the first state to require hospitals to report serious medical errors, making it possible to track them.

Whether something like this can work nationally or becomes an administrative nightmare remains to be seen. Even Minnesota hospitals, ahead of those in most other states when it comes to patient safety initiatives, foresee some difficulties with the new policy.

But Medicare officials seem undaunted.

"We hope this creates a lot of discussions [in hospitals]," Herb Kuhn, director of the Center for Medicare Management, told reporters. "This is not only critical to the success of the Medicare program ... but absolutely critical to [hospitals'] success."

Fewer than 10 'never events'

In its policy, HealthPartners chose not to cover 27 types of "never events" identified by the National Quality Forum, a health-industry think tank -- events so egregious that they should never happen. They include such errors as operating on the wrong limb or the wrong patient.

Since the HealthPartners policy took effect in January 2005, the insurer has been billed for fewer than 10 never events. Other errors were caught by hospitals before billing HealthPartners, but the insurer has not tracked those.

Nor has it tallied savings. Since such serious errors are rare, the policy was never intended as a big money-saver, Apland said.

After the policy was announced, HealthPartners received inquiries for information from state agencies and health plans around the country, Apland said. HealthPartners officials met several times with Medicare and the Leapfrog Group, a health quality coalition of big employers, to share their experience, she said.

In Minnesota, some of the initial dismay has dissipated.

"Hospitals have fully embraced the notion that no one should pay for these events. Most of the time, they catch it before it gets into billing," said Bruce Rueben, president of the Minnesota Hospital Association and an early critic of the HealthPartners policy.

Rueben said he expects other private insurers to follow Medicare's lead. Blue Cross and Blue Shield of Minnesota and Medica said they are studying the issue.

Nor has the move driven reporting of errors underground. Many hospitals are organizing care around teams, and it's increasingly difficult for any individual to hide an error.

At Regions Hospital in St. Paul, surgical teams now have standard briefings before and after surgery. And they're starting to count and recount not just the sponges and needles most likely to be left in a patient, but even unlikely objects such as clamps, said Dr. Troy Boffeli, a foot and ankle surgeon at Regions who heads a multihospital coalition on improving patient safety.

Need to tweak policy?

Medicare's policy includes three "never events" as well as five other hospital-related conditions such as urinary tract infection from cathethers, fractures from falls and bedsores. On Oct. 1 it will start collecting more data when a patient is admitted to figure out if the patient got sicker while in a hospital. A year later it will stop paying for those conditions.

Medicare used three criteria for the list of conditions: high cost, high volume or both; conditions that result in a procedure being billed in a higher-cost category, and those that could reasonably have been prevented.

Dr. Penny Wheeler, chief clinical officer at Allina Hospitals and Clinics, applauded the policy's overall goal but said it may need to be tweaked.

Assigning blame for infections can be tricky, for example. People whose immune systems are compromised, such as cancer or transplant patients, may be likelier to get infections, despite precautions. "As any program like this starts, it's always a little bit messy," she said.

The nonprofit status of Minnesota hospitals also may be a problem, said Dr. Charles Fazio, chief medical officer at Medica. "If you end up not paying for these things, where do these costs go? They end up getting transmitted into the system somehow," Fazio said.

"This is just a baby step in trying to connect how we pay for health care and the quality of that care," said Suzanne Delbanco, chief executive of the Leapfrog Group in Washington. "It's highly likely it will expand over time."

Chen May Yee • 612-673-7434

Chen May Yee • mychen@startribune.com