The more you learn about the American healthcare system, the more you can see that we have a perversely twisted medical setup that costs us money and does a poor job of helping health. A study by Harvard, the Boston Consulting Group and Texas Health Resources shows that when doctors mess up your surgery, the hospital triples its profits on your operation.
“We found clear evidence that reducing harm and improving quality is perversely penalized in our current health care system,” says researcher Sunil Eappen, M.D., chief medical officer of the Massachusetts Eye and Ear Infirmary.
The study demonstrated that if you have private health insurance and are having an operation, the hospital hits the jackpot if your doctor botches your procedure. These kinds of complications generate an average of more than $39,017 extra profit per patient: $55,953 vs. $16,936. For Medicare patients, the margin per patient increases by an average $1,749 ($3,687 vs. $1,880). In contrast, for Medicaid and people paying for their own care, complications were associated with significantly lower contribution margins than those without complications.
“It’s been known that hospitals are not rewarded for quality. But it hadn’t been recognized exactly how much more money they make when harm is done,” says researcher Atul Gawande, M.D., director of Ariadne Labs, professor in the Department of Health Policy and Management at the Harvard School of Public Health. “This is clear indication that health care payment reform is necessary,” said Gawande. “Hospitals should gain, not lose, financially from reducing harm.”