Using Medicare’s paying power to change hospital behavior

If you’re anything like me, you have been seeing a lot in the news lately about medical errors and hospital acquired infections and how expensive this problem is becoming. If not, don’t worry, I turn off my TV during election season too! Fortunately, I get to catch up on the highlights online, without most of the ads. One article caught my eye last week and I wanted to share. It’s a report on a recent study published in the Annals of Internal Medicine. In 2008, there was a lot of hullaballoo when Medicare and Medicaid published a new rule saying that they were no longer going to pay hospitals for treating preventable hospital acquired infections.

The goal was to give hospitals and doctors a financial incentive to reduce their infection rates. It made sense to me; draining my bank account has always been a pretty good incentive for me to change my shopping habits!

The idea was sound; the execution was a little shaky.

But perhaps unsurprisingly to the health care professionals out there, this isn’t working out quite like they had planned. A recent analysis from the University of Michigan showed that hospitals are not correctly identifying infections in their coding/billing systems so that they can continue to get paid!

“For all adult hospital stays in Michigan in 2009, eliminating payment for [urinary tract] infections decreased hospital pay for only 25 hospital stays (0.003% of all stays).” This drastically underestimates the number of people who get infections. The CDC estimates that 560,000 catheter-associated urinary tract infections (CAUTIs) occur annually and leads to an estimated 13,000 attributable deaths each year.


When they originally announced this program , Medicare expected savings of $20 million annually and Medicaid estimated a further savings on their side of $35 million over 5 years. They expected the savings to come from reduced reimbursements for ten “never events” including UTIs and pressure ulcers. It is now clear that this is NOT going to happen without a major change within hospital systems.

“The policy was well intended but its financial savings from non-payment for catheter-associated UTIs are negligible because of the data used to implement the policy,” says author Jennifer Meddings, MD, MSc, an assistant professor in the Department of Internal Medicine, Division of General Medicine at U-M Medical School.

But why should this matter to you? There are lots of reasons, but the top three are below:

  1. You or someone you know may be at risk of a UTI right now. Over half a million patients develop a catheter-associated urinary tract infection (CAUTI) in a U.S. hospital each year.

  2. You’re paying for it. The Government funds Medicare and Medicaid through my and your taxes. We are continuing to pay top dollar for lower quality care.

  3. It’s about to get worse. Effective 2015, Medicare is going to start penalizing hospitals with high infection rates. Sounds like a good idea, right? The problem is that they are using data that we already know is wrong. In effect, this new policy is going to disproportionately penalize hospitals who are declaring their infections correctly and allow hospitals that skirt the system to benefit even more. That hardly sounds fair, does it?

The best thing we can do as consumers is insist that hospitals report their infection rates honestly so that patients can make informed decisions and know what they’re getting for their money! So the next time you’re in the hospital, stay away from the Foley. Ask for alternatives and make your infection concerns known to the doctors and nurses. Demand better!

(And just a little shameless self promotion to the men reading this, there are better urinary management options out there. An indwelling catheter isn’t always the best answer –talk to your doctor about alternatives like Men’s Liberty.)