Reducing surgical complications for patients has the obvious benefits of better patient safety and quality of care, but it may perversely hurt hospital revenue and reimbursements as well, according to a study from Health Affairs.
The authors of the study looked at data of inpatient surgery cases from 2010 and analyzed how the costs, reimbursements and other financial metrics coincided with both surgical complications and surgical volume.
They found that a hospital is reimbursed roughly $36,000 for a patient with surgical complications compared with $24,000 for a patient without complications. Further, the average hospital loses, on average, roughly $1.2 million in annual reimbursement revenue for each 1 percent drop in the surgical complication rate.
"Our analysis leads to a distressing conclusion: A program to reduce complications from surgery, while clearly in the interest of patients and payors, will result in a negative cash flow for hospitals whose caseloads of surgical inpatients are not growing," according to the report.
Better surgical standards will only increase hospital cash flow if inpatient surgeries grow in volume or if the length of stay for patients with complications exceeds that of those without complications, the authors said.
The study epitomizes the current, awkward state of the healthcare system that is both trying to live in a fee-for-service world while moving to a more collaborative, value-based system. Hospitals may still want to engage in these types of surgical quality improvement programs because it "is the right step to take," according to the authors, and it is in hospitals' best interest to negotiate gain-sharing and shared savings agreements with payors for these types of programs.
The authors of the study looked at data of inpatient surgery cases from 2010 and analyzed how the costs, reimbursements and other financial metrics coincided with both surgical complications and surgical volume.
They found that a hospital is reimbursed roughly $36,000 for a patient with surgical complications compared with $24,000 for a patient without complications. Further, the average hospital loses, on average, roughly $1.2 million in annual reimbursement revenue for each 1 percent drop in the surgical complication rate.
"Our analysis leads to a distressing conclusion: A program to reduce complications from surgery, while clearly in the interest of patients and payors, will result in a negative cash flow for hospitals whose caseloads of surgical inpatients are not growing," according to the report.
Better surgical standards will only increase hospital cash flow if inpatient surgeries grow in volume or if the length of stay for patients with complications exceeds that of those without complications, the authors said.
The study epitomizes the current, awkward state of the healthcare system that is both trying to live in a fee-for-service world while moving to a more collaborative, value-based system. Hospitals may still want to engage in these types of surgical quality improvement programs because it "is the right step to take," according to the authors, and it is in hospitals' best interest to negotiate gain-sharing and shared savings agreements with payors for these types of programs.
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