Indy hospitals stung by Medicare penalties for patient injuries

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Five Indianapolis-area hospitals stand to lose more than $7 million in Medicare payments as a penalty for having rates of infections and patient injuries that run higher than most hospitals nationwide.

In the Indianapolis area, Eskenazi Hospital, Indiana University Health’s Methodist Hospital, Community North Hospital, Community Heart & Vascular and Lebanon’s Witham Health Services will also see 1 percent less in Medicare payments, starting with the fiscal year that began on Oct. 1.

Statewide, another nine hospitals will have their Medicare payments reduced because of high rates of mistakes: Community Howard Regional in Kokomo, Dupont Hospital in Fort Wayne, the Franciscan Alliance hospitals in Crown Point and Munster, Memorial Hospital in Jasper, Methodist Hospital in Gary, Physicians’ Medical Center in New Albany, Saint Joseph Regional hospital in Plymouth and Union Hospital in Terre Haute.

As a whole, Indiana’s hospitals performed better than their peers nationally. The 14 Hoosier hospitals on the list account for 16 percent of the 88 Indiana hospitals Medicare assessed as part of this program.

That ranked Indiana as the 11th best state, for fewest preventable errors, according to data compiled by Kaiser Health News.

Nationally, 22 percent of the hospitals assessed were penalized. The list of penalized hospitals includes some of the best-known and most highly regarded hospitals, including the Cleveland Clinic, Brigham and Women’s Hospital in Boston and Geisinger Medical Center in Pennsylvania.

Hospitals are getting better at avoiding unnecessary patient deaths. A report released in November by the federal Agency for Healthcare Research & Quality found that preventable deaths in hospitals had declined by 17 percent from 2010 to 2013.

Community Health Network spokesomwan Lynda de Widt noted in a statement that the data used in Medicare's analysis is as much as three years old, and fails to capture recent improvements the hopsital system has made.

"Community has created performance improvement teams that have reduced hospital-acquired conditions by more than 50 percent," she wrote in an e-mail. "As a result of this work, Community was honored this past fall at an Indiana Hospital Association event for participating in the national Partnerships for Patients program, and for significantly reducing hospital-acquired conditions. Community will continue to strive to be the safest health network in Indiana."

But hospitals remain dangerous places to be.

The problem of preventable deaths in hospitals first gained national prominence 15 years ago when the Institute of Medicine released its landmark “To Err Is Human” report, which claimed that nearly 100,000 Americans die avoidable deaths each year in hospitals.

That estimate was at first met with significant skepticism but has since been confirmed by additional studies. In fact, some studies now estimate as many as 440,000 Americans die unnecessarily each year in hospitals.

David Goldhill summed up the situation in his blockbuster 2009 article in The Atlantic, when he noted that twice as many people die from avoidable infections and injuries in hospitals as die from car accidents. Five times as many people die unnecessarily in hospitals as the total number of homicides each year.

“How does a nation that might close down a business for a single illness from a suspicious hamburger tolerate the carnage inflicted by our hospitals?” Goldhill asked in his article, written after his father died from a hospital-acquired infection in a New York City hospital. “How did Americans learn to accept hundreds of thousands of deaths from minor medical mistakes as an inevitability?”

Medicare, the federal health insurance program for seniors, isn’t accepting it as inevitable anymore. It announced last week that it will hold back 1 percent of its payments to 721 hospitals whose rates of hospital-acquired infections and injuries were in the top 25 percent nationally.

According to Kaiser Health News, Medicare evaluated three types of potentially avoidable harms to patients, which are called “hospital-acquired conditions: bloodstream infections from contaminated central lines, which are the tubes inserted in patients to inject fluids, blood or nutrients into hospital patients; urinary tract infections caused by contaminated catheters, and serious complications, which includes eight types of injuries, such as blood clots, serious bed sores and falls.

Medicare did not assess nearly 1,400 hospitals, most of which provide specialized treatments such as psychiatry, rehabilitation or services to children or veterans. Also, small “critical access hospitals,” most of which are in rural areas, are exempt from this Medicare program.

The Medicare revenue that hospitals will lose will not be trivial.

In 2013, Community North Hospital received $80 million from Medicare. If a 1 percent penalty had been applied, Community would have not received $800,000.

Also based on its 2013 Medicare revenues, Community Heart & Vascular hospital would have seen nearly $457,000 less from Medicare’s 1 percent penalty.

Eskenazi would have received $861,851 less from Medicare, based on its 2012 Medicare revenue, the most recent report available. Witham Health would have received $260,775 less, based on its 2013 Medicare revenue.

IU Health has the most to lose. Its Methodist Hospital is the reporting entity to Medicare for all three of its downtown hospitals and its Saxony hospital. In 2012, the most recent year for which IU Health has reported campus-specific information for those hospitals, Medicare revenue totaled $463.2 million.

A 1 percent penalty, therefore, would have totaled $4.6 million.

All told, that’s more than $7 million in penalties, just for the five penalized hospitals in the Indianapolis area.

IU Health and Eskenazi probably have some room to complain. Kaiser Health News hired a Harvard researcher to examine the Medicare penalties, and he concluded they fell disproportionately on academic medical centers and hospitals with the poorest patients.

Ashish Jha, a professor at the Harvard School of Public Health, found that penalties were assessed against 32 percent of the hospitals with the sickest patients. Only 12 percent of hospitals with the least complex cases were punished. Hospitals with the poorest patients were also more likely to be penalized.

“I’ve worked in community hospitals, I’ve worked in teaching hospitals. My personal experience is teaching hospitals are at least as safe if not safer,” Jha told Kaiser Health News. “But they take care of sicker populations and more complex cases that are going to have more complications. The [Medicare] penalty program is really a teaching hospital penalty program.”

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