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The move to value-based payment models could mean improvements in patient safety.
Sylvia Mathews Burwell, secretary of the U.S. Department of Health and Human Services (HHS), recently announced ambitious plans for transitioning the traditional Medicare fee-forservice program, which covers 70 percent of beneficiaries, to value-based payment models, with the goal of having at least 50 percent of payments flowing through accountable care organizations (ACOs) and bundled payment programs by the end of 3018.a Many major private payers and state Medicaid programs also have embraced value-based payment models, making it increasingly likely that the U.S. healthcare system will soon reach a tipping point in terms of payment reform. This shift provides an exceptional opportunity to improve the quality and safety of health care.
For health systems in the process of transitioning to value-based payment programs, improving patient safety can be key to financial survival. ACOs with shared savings/risk arrangements tied to the total cost of care and patient outcomes feel the financial consequences of unsafe care directly. Under bundled and capitated payment programs, the costs of treating injuries resulting from errors erode hospital margins. Reducing preventable harm will benefit the bottom lines of all.
National estimates of the impact of preventable adverse events on hospital costs are in the range of $16 billion to $18 billion annually, with healthcare-acquired infections alone accounting for nearly $10 billion.b Because of underreporting of adverse events, these estimates understate the actual costs.0 In addition to hospital costs, catastrophic medical malpractice payouts ($1 million or greater) total about $1.4 billion per year.d More difficult to estimate, but far greater than healthcare costs and malpractice combined, are the societal costs associated with preventable adverse events, such as lost days of work, lower workforce productivity, pain and suffering, and long-term disability.0
The healthcare industry in recent years has realized significant improvements in certain aspects of patient safety, demonstrating that the knowledge and tools exist to tackle safety issues. HHS estimates that national reductions in infections, adverse...