Few savings for Medicare generated from hospital penalties

Accreditation Connection, September 14, 2009

Last year, on October 1, 2008, Medicare adopted a policy that refuses to pay hospitals' extra costs to treat 10 hospital-acquired infections and injuries, with the goal of cutting costs and saving lives. In a recent study, the Wall Street Journal reports that the government will not be saving much from this year-old policy.

The study, which was published in the September 9 issue of Health Affairs, studied California discharge data for Medicare beneficiaries in 2006. Six conditions that could be deemed "definable" were reviewed by the authors. With the information gathered from 2006, they determined that out of a sample of 767,995 cases, only 26 of the cases would have been subject to lower payments. This would render $1.1 million to $2.7 million in annual savings if applied nationwide, mere pocket change for Medicare.

"The impact could be even less since October 2008, when the penalties took effect, because the system relies on hospitals to report their mistakes," said Andrew Bindman, a study author and professor of medicine at the University of California at San Francisco, in an official statement to the Wall Street Journal.

To read more on how much Medicare is saving, click here.

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