The Harvard project evaluated coded charges at a 12-hospital healthcare system in Texas, and discovered that when privately insured patients developed complications, the system made three times as much money, as it did when insured patients' procedures went without a hitch.
The paper is being seen as a call for health plans to renegotiate how they pay for care when something goes wrong. It also is being seen—incorrectly I believe—as evidence that hospitals and doctors are purposefully causing complications to increase profits.
Wachter emphatically insists that, despite the implications of the Harvard report, "I do not believe there is any hospital or doctor in the country who is trying to harm people to make more money. Nobody sits there at a board meeting or in the C-suite and says 'We're okay with these complications because we're being paid for them.'
"But what they do say is, 'Boy, we need to build a new OR, or we need to do more marketing or hire another cardiac surgeon and that will cost a lot of money. Do we do a teamwork training program or buy a bar coding system? Well no. This year we can't afford it.'
"If the business case were stronger, then (quality improvement) would rise higher in the priority list," Wachter says.
Some hospital officials and doctors will argue that quality measurement as they're reporting to these registries is fine for that purpose, but not fine for a platform on which to base how they're paid and publicly reported.