Saturday, August 9, 2008

BCBS Illinois requires hospital accountability

Bruce Japsen of the Chicago Tribune reported on important new decision by Blue Cross and Blue Shield of Illinois to require that hospitals be financially accountable for serious errors. His article Mistakes to Cost Hospitals appeared in the August 7, 2008, Chicago Tribune.

To boost quality and cut costs, Blue Cross and Blue Shield of Illinois will not pay for medical errors called "never errors" (medical errors that should never happen).

Signaling an industry-wide shift toward more consumer-friendly practices long common in other businesses, the Illinois' largest health insurer will soon begin refusing to pay for bad service.

If a hospital commits a serious error—such as leaving a sponge in a patient's chest after open-heart surgery or causing a prolonged illness by mixing up a patient's medication—Blue Cross and Blue Shield of Illinois says it will no longer pay the claim.

The idea is that forcing hospitals to absorb those costs will create an incentive to improve quality of care in a business where money typically rolls in regardless of patient outcomes and customers often feel lost in a complex, impersonal system. Employers, consumers and taxpayers are increasingly demanding that providers of medical care be held more accountable, particularly as the costs of health insurance continue to rise.

As of October, the Medicare health insurance program for the elderly—the nation's largest payer to hospitals—will no longer pay if the government can determine that a serious medical error or a deadly infection occurred in the hospital.

The broader trend is for payers to pay for good performance and not pay for extremely poor performance, which is a fundamental principle of good business practices before Adam Smith, but it's never been applied to health care," said Leah Binder, chief executive officer of The Leapfrog Group, a national coalition of large health-care purchasers such as Chicago-based Boeing Co., General Motors Corp. and General Electric Co.

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