‘Hid­den sur­charge’

Leapfrog Group in­tro­duces er­ror cal­cu­la­tor

Modern Healthcare - - THE WEEK IN HEALTHCARE - Rachel Lan­den

Slightly more than a year af­ter the Leapfrog Group un­veiled con­tro­ver­sial let­ter grades for hos­pi­tal safety, the or­ga­ni­za­tion in­tro­duced an on­line tool to help em­ploy­ers cal­cu­late the “hid­den sur­charge” they pay hos­pi­tals for er­rors, ac­ci­dents and in­fec­tions.

“It’s coun­ter­in­tu­itive and out­ra­geous, but you will pay a lot more for hos­pi­tals that have more er­rors, ac­ci­dents and in­fec­tions,” Leah Bin­der, Leapfrog pres­i­dent and CEO, said in a news re­lease. “Er­rors aren’t typ­i­cally marked as a line item on a bill, but pur­chasers and con­sumers are pay­ing mil­lions of dollars for them, and we’ve sub­stan­ti­ated it with our re­search.”

The Amer­i­can Hos­pi­tal As­so­ci­a­tion, which along with many of its mem­bers has been crit­i­cal of the method­ol­ogy Leapfrog uses to gen­er­ate let­ter grades, is du­bi­ous about the ac­cu­racy of the er­ror cal­cu­la­tor.

“With­out ad­di­tional ref­er­ence points or val­i­da­tion, the method­ol­ogy of this new tool is se­ri­ously flawed,” AHA spokes­woman Marie Wat­teau wrote in an e-mail.

By in­putting claims data and hos­pi­tal safety rank­ings, em­ploy­ers can cal­cu­late the costs they bear for hos­pi­tal er­rors and the aver­age amount spent on er­rors per pa­tient ad­mis­sion each year. Leapfrog es­ti­mates that the aver­age toll is $7,780 when a pa­tient is ad­mit­ted to a hos­pi­tal with a safety score of C, D or F. The cal­cu­la­tor in­cludes an ex­am­ple of an em­ployer with 1,000 an­nual hospi- tal ad­mis­sions that would pay a $7.7 mil­lion sur­charge for the year.

Bin­der said that fig­ure could ac­tu­ally be higher be­cause the cal­cu­la­tor as­sumes that pri­vate health­care pur­chasers pay twice what Medi­care pays for avoid­able ser­vices, and at least one re­cent study sug­gests a wider gap.

At one hos­pi­tal sys­tem in the South, ac­cord­ing to an April 2013 study pub­lished in the Jour­nal of the Amer­i­can Med­i­cal As­so­ci­a­tion, the mar­ginal cost for pri­vately in­sured pa­tients who ex­pe­ri­enced at least one sur­gi­cal com­pli­ca­tion, com­pared with those with no com­pli­ca­tions, was 22 times higher than for Medi­care pa­tients ($39,017 ver­sus $1,749).

The AHA, how­ever, takes is­sue with Leapfrog’s use of Cal­i­for­nia in­fec­tion data pro­jected na­tion­ally with­out a clear ex­pla­na­tion of how the data are ad­justed. The AHA also crit­i­cizes the tool for in­cor­po­rat­ing com­par­isons across re­ported data and claims data. And, Wat­teau added, the cal­cu­la­tor fails to re­flect that sicker pa­tients need more pro­ce­dures and present more open­ings for com­pli­ca­tions and er­rors.

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