Improving quality, reducing costs: SOA research on medical errors

by Jim Toole, SOA Board Member

JimToole When people talk about the Patient Protection and Affordable Care Act (PPACA), they usually focus on the bill’s short-term implications to access to care and pressure on costs. This slights the bill’s long-term goals of improving quality of care, patient outcomes and reducing costs. Effective July 1, 2011, a little-noticed portion of the bill included putting Medicaid “never events” on the same footing as Medicare. The Medicaid regulations prohibit federal payments to states for certain healthcare acquired conditions known as never events, similar to the regulation that has been in place for Medicare since 2008.

The intent of these regulations is to start creating a culture of improving the quality of care while reducing costs. It will encourage hospitals and healthcare professionals to reduce preventable infections and eliminate serious medical errors throughout the system. Although the cost savings are small in comparison to the total costs of these federal programs, they are the first steps in creating a culture of quality in these provider settings. For years, hospitals have been encouraged to take such simple steps as using checklists to improve care. The drumbeat in the literature goes on, most eloquently in Atul Gawande’s May 26, 2011 commencement address at Harvard Medical School, but still does not reach the ingrained cowboy cultures of hospital surgical rooms.

Recent SOA research has quantified the cost of medical errors to the U.S. economy to be conservatively estimated at $19.5 billion. This figure underestimates the true costs by as much as a factor of 10 as a result of the limitations on available data and conservatism inherent in the methodology. These preliminary steps to impose some semblance of quality standards, limited as they are, will translate into better quality for all stages of care, resulting in leveraging greater savings and better patient outcomes down the road.

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