Hospitals May Gain From Their Mistakes

[I]n a competitive environment increasingly characterized by transparency of outcomes, the surgical complication rate is an important measure of hospital performance that could strongly influence choices of care and care sites made by patients and payers. However, programs to achieve such improvements can reduce hospital revenues, as reimbursements to treat patients for complications decrease…We found that if a hospital’s surgical inpatient volume is not growing, such a program results in negative cash flow.

Source: Health Affairs.

Comments (10)

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  1. seyyed says:

    over the long term they may be able to recoup those losses when people choose these hospitals because of low surgery complications rate

  2. Robert says:

    We found that if a hospital’s surgical inpatient volume is not growing, such a program results in negative cash flow.

    So if your revenue generating abilities don’t expand, then that is bad?

    Glad we cleared that up.

  3. Buster says:

    Of course a hospital that doesn’t compete on quality doesn’t want to advertise its lack of quality. Rather, it wants to emphasize its amenities or attempts to boost its perceived quality. Likewise, you will never see a merchant advertise “our prices are higher than Walmart, despite the fact our locations are less convenient and our selection is poor.” There’s a reason hospitals doesn’t advertise their quality metrics; it is more efficient to compete on measure other than quality.

  4. August says:

    Leverage for hospitals to negotiate with providers to implement complication control measures.

  5. Cindy says:

    I agree with Seyyed — people who choose to be informed consumers will often choose to patronize a hospital with a high safety rating. In that sense, the cost to make upgrades is worth it.

  6. Jordan says:

    Yep, this isn’t about stifling their revenue streams. It’s about sacrificing transparency for their bottom line. If the government did this people would have a fit.

    Oh wait..

  7. Jenny says:

    Even if these programs reduce the revenue for hospitals…it should still remain a priority to improve the quality of surgical procedures. Hospitals could figure out other ways to get higher reimbursements. Patients would be much better off if only hospitals and physicians could focus on quality over quantity..

  8. Charlotte says:

    If you implement a new program (whether to improve surgical outcomes, or anything else for that matter) and you don’t have more patients coming in, then you know you are doing something wrong and, obviously, you can’t expect to have a positive cash flow. If they only focused on a program that offers a better quality service then they would have a better turnover and their revenue would increase.

  9. Alex says:

    Hospitals won’t tolerate reduced revenues for long, so any gain they receive from increased usage better come soon.

  10. Paul says:

    If that’s the way it is then hospitals simply won’t adopt the new programs.