QUALITY: Getting the Party Started on Payment Reform

Forget star-studded parties in the Hamptons. The most-talked about events in health policy these days are so-called never events—serious preventable medical errors, such as operating on the wrong patient or body part. And if policymakers and payers have their way, never events will someday be non-events.

Medicare helped get the party started when it announced that come October it will stop paying for a series of preventable medical errors that result in serious consequences to patients. Private insurers across the nation have followed suit, and BlueCross and Blue Shield of Illinois, the state's largest insurer, has joined the party, according to the Chicago Tribune.

The Tribune's Bruce Jasper lays out the issue and explains the goals:

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. [...]

Never events are rare, and insurers say they typically aren't billed for the most egregious errors, such as removal of the wrong limb. Those errors often lead to malpractice suits instead. But there are many other instances in which patients or their employers end up paying more money because of hospital error, such as a re-do of a botched surgery or a longer hospital stay because of an infection.

The example of never events is interesting, because it suggests that Medicare can be for payment policy what Jackie Onassis was for Chanel jackets and neutral hues—a trend setter. If Medicare can jumpstart a movement to refuse payment for serious medical errors, imagine what it can do for the payment and practice of medicine as a whole. As the single largest purchaser of medical services in the U.S., Medicare offers one potential way of moving to a system of payment based on the quality of outcomes, not the quantity of services.

Now that's a party we'd lke to attend.