Hospital Profits From Surgical Errors

Surgeries in the United States cost about $400 billion per year. But, if insurers gave hospitals an incentive to reduce surgical complications, it is likely that number would decrease. The study by BCG analyzed insurance billing data from over 34,000 in-patient surgeries performed in 2010 in the southern United States. Of the surgeries studied, 5.3 percent, or about 1,820 patients, saw at least one complication.

Complications can include blood clots, stroke, infection, septic shock, pneumonia, or cardiac arrest.

On average, hospitals ended up with about $17,000 of profit for privately-insured patients who didn't have a complication after surgery. That compared to about $56,000 in profit for privately-insured patients who had one or more complications.

Among Medicare patients, the hospital profited about $1,900 when there were no complications. That compared to about $3,600 in profit when Medicare patients had one or more complications.

In contrast, the hospitals lost money - regardless of whether or not there was a complication -when their surgeons operated on patients who paid for their own surgery or were on Medicaid, the federal and state health insurance program for the poor. These people only made up about one in 10 of the hospitals' patients.

Overall, hospitals ended up with about $8,000 profit for every complication.

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