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Hospitals Reap Big Profits From Their Own Surgical Mistakes

March 22, 2017

Hospitals Reap Big Profits from Their Own Surgical Mistakes

A recently published study uncovered that hospitals nearly triple their profits when they make surgical errors, compared to how much they make when patients don’t suffer harm, according to a new study published in the Journal of the American Medical Association (JAMA).

Hospital costs, revenues, and contribution margin (defined as revenue minus variable expenses) were compared for patients with and without surgical complications according to payer type.  On average, the hospitals studied reaped an extra $30,500 in profits when a patient developed one or more potentially preventable surgical complications because insurance plans pay more for longer stays and extra care.  “It’s shocking, crazy and perverse that hospitals are being financially rewarded for harming patients, while the prize for hospitals that are working hard to improve patient safety and reduce surgical errors is losing money,” says Barry Rosenberg, MD, a coauthor of the study.

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