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Insurers Refuse to Pay for Medical Mistakes
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Errors can happen in any profession. But when those mistakes happen in a hospital, the outcome can often be very serious, and very costly. Now some health insurers are saying they won’t pay up, if medical negligence means a patient needs extra care.

Troy Brennan: Photo by Harvard Public HealthTroy Brennan: Photo by Harvard Public HealthIt goes without saying that a hospital is a place that’s supposed to make you better. But sadly, that’s not always the case. According to the National Quality Forum, a non-profit dedicated to improving standards, what are known as “adverse healthcare events” are a leading cause of death and injury in the US. The Forum has compiled a list of what it calls “never events” – mistakes so easy to prevent they should never occur. The 28 events on the list include things like surgery on the wrong limb, giving the wrong medication, and serious injury from a fall in hospital. Hartford based health insurer Aetna has now adopted the never events list, and says it will write into its contracts with hospitals that it will not pay for care associated with any of them. Troy Brennan is Aetna’s chief medical officer.

"The chief medical officer in the hospital is obviously always thinking about safety, but we want the CEO and the CFO, the chief financial officer to be thinking about it as well. So when they negotiate with us they realize that if a never event occurs they’re not going to be compensated for it."

He says the financial incentive promotes a culture of safety.

"Of course mistakes do occur. With regard to these particular kinds of mistakes what we find is that if you put appropriate systems in place, the mistakes occur far less frequently."

Allyson Kounaris from Rocky Hill is a survivor of one such mistake, after she suffered third degree burns during a uterine surgery.

"They basically insert a liquid ball of fire to burn the uterine lining, and the equipment malfunctioned and the ball of fire got bigger and it basically escaped. The entire genital area became very burned, I had third degree burns. It became very difficult to do anything, to walk to sit, and it really was a significant impact on my life."

Kounaris says if insurers withhold payment for medical errors like these, the patient will suffer.

"Let’s assume for a minute that they say there’s certain things they’re not going to cover, then as a patient, what’s going to happen when I go into that hospital for treatment. Is that hospital going to treat me if they think they’re not going to get paid back?"

Kounaris says care should be paid up front by the insurer, and then claimed back from the hospital if negligence is proved. She says transparency is the way to promote patient safety.

"Maybe we need to say to consumers ok this hospital, this is their record – this is their infection record, this is their burn record, and then the consumers can make a choice about which hospitals to go to and which not."

Connecticut does in fact collect statistics on adverse healthcare events. Between July 2004 and March 2007 there were 722 events reported by hospitals in the state, including 73 deaths. But the state Department of Public Health doesn’t disclose which hospitals have the worst record, and it does concede that there’s probably significant under-reporting. Jean Rexford is executive director of the Connecticut Center for Patient Safety. She too would like to see hospitals publish their own figures. She gives Aetna’s stand a cautious welcome.

"I do think that this movement to hold the hospitals financially responsible will be incredibly important to move them faster to doing best practices. We would have to rely on our Attorney General to deal with the hospitals if they went after the individual patients for payment."

Rexford wants to see the policy of non-payment extended to cover that most high profile of hospital problems, MRSA, or methicillin resistant staph infections.

"That probably is more detrimental to the healthcare consumer and to the finances of our health care industry. For every time somebody gets a hospital infection, it adds 36 thousand dollars to the hospital bill."

Right now, there’s no way that I would see that that would qualify as a never event category.

Troy Brennan of Aetna

"It’s too common, and care can be excellent and people still be infected with MRSA."

Hospitals are facing more and more pressure. Aetna is not the only private insurer to have made this change – Wellpoint, UnitedHealth and Cigna are among the others considering similar policies. Medicare has gone even further, adding things like hospital acquired catheter infections and blood poisoning. Dr Brian Fillipo of the Connecticut Hospitals Association says he believes transparency and not financial pressure is the way to improve patient care.

"If you look at the National Quality Forum’s list and how that was developed, it was never developed as a list of events not to get paid for. National Quality Forum clearly identifies that many times these events are not the fault of the hospital. The list was put together to try to standardize public reporting of serious events so that we can identify areas we can be working on for quality improvement."

Fillipo says individuals patients would not be pursued for the cost of care, but he also thinks Connecticut hospitals shouldn’t be stuck bearing the cost of errors that might not be their fault. But in other states, hospitals are voluntarily taking that responsibility. Massachusetts and Minnesota have pledged not to bill for the cost of care associated some of the never events.