Carrots and sticks to improve patient safety.

Implications: The last several years as seen the growth of financial incentives to stimulate improvements in patient safety and patient outcomes.  Clearly society has an interest in improving patient safety, and aligning providers and payers financially is a laudable goal. The use of denied payments raises the bar in that rather than rewarding safe practices, presumed unsafe practices are punished.  While plausible this approach has some potential downside (from the hospital/provider point of view): pressure  to underreport errors, messy and perhaps litigious relationships on the definition of medical errors,  a public and high visibility paper trail that might support civil litigation.

Analysis: The approach to deny payment for billing related to well defined errors changes the financial approach to improving patient safety from a bonus for good practice to punishment for bad.

This is not necessarily a bad thing.  However, a number of issues should be considered.

1) Much of the current patient safety movement is moving towards open reporting of errors, encouraging physicians and staff to report errors.  A financial penalty might push providers to underreport or misreport such issues, and lead to overall less disclosure and accountability.

2)  to some extent, current DRG payments do not pay for errors, as long as the error doesn't lead to a change in coding.  If someone gets a hospital infection, and that leads to upcoding, proving in an individual case might be difficult.

3) It isn't that easy to prove that a result, such as a nosocomial infection, was an error in the individual case, as oppose to the aggregate.

4) The other errors listed in the article, retained sponges, blood transfusion errors, etc, are sufficiently rare and of such great consequence that a financial penalty would not have any significant additional value in limiting their occurrence.