The need to deliver proper health care as quickly as possible has forced physicians to compromise on quality and attention-to-detail at times. This is evident by the rate of errors committed during hospitalization or the necessity of patients to return to the hospital or physician after their initial visit to reverse complications. The recent decision by Medicare and insurance companies to refuse to pay hospitals for complication reversals and errors committed during initial hospitalizations has many implications. Although this decision will lead to cost savings and superior care for patients, the resulting increase in hospital costs will shift to the patients and may potentially diminish the overall benefit of the new policy by reducing access to care.

The direct result of the policy is that hospitals are held more accountable for the care they provide and for the timing of patient discharge. Since physicians are no longer promised payment for any errors they commit or for any preventable complications that arise at the hospital, they are forced to practice extra diligence when providing health care. This leads to superior care for the patient, potentially multiplying savings and health benefits later on. Countless lives are also saved that may have been lost from careless surgery or accidental contraction of disease in inpatient care facilities. The Centers for Disease Control and Prevention estimated in 2007 that patients develop 1.70 million infections per year while in the hospital. Out of these 1.70 million cases, about 99,000 are fatal due to the effects from the infections.

This new policy also leads to cost savings for Medicare and insurance companies. The previous system effectively rewarded physicians and hospitals for services related to treating preventable conditions that originated at the hospital. Medicare and these insurance companies save money by refusing to compensate for these blunders because they no longer have to pay for the complications arising from subpar medical care. The broader positive implication from the refusal to reimburse readmissions is that greater attention is paid to patient health care across the continuum. Hospitals can no longer exist in a silo and only be concerned with the care they provide directly. Hospitals must now be more engaged to prevent future readmission, may it be through playing a greater role in post-hospitalization care, scheduling follow-up appointments, and more.

Despite the prospect of superior care, many negative implications also arise from the new policy. There may be lower access to proper care for discharged patients because hospitals will be reluctant to readmit them unless the reasons are deemed significant enough. Consequently, patients that are wrongfully denied readmission may sue hospitals. Illnesses with low chances of treatment, regardless of hospital intervention, also exist. This incentives hospitals to specifically pick patients with higher chances of recovery; hospitals may be more likely to selectively treat healthier patients that will respond to treatment and can afford their services (i.e. do not require Medicaid or Medicare), or hospitals may alternatively opt to not provide treatment options for those illnesses at all.

In addition, hospitals will have to gather data to ensure they are being fairly and properly reimbursed for conditions that arise from out of their control. Hospitals will need to individually learn about infection types, rates, and causes at their own institutions to ensure they are not refused reimbursements resulting from factors outside of their control. This leads to increased administration costs because workers and statisticians must be hired to conduct the data collection, in addition to the workers that need to be hired to handle the further-complicated Medicare and insurance company reimbursement process. Increased complexity directly causes increased administrational expenses.

Also, more information from the patient will have to be collected to ensure fair reimbursement. The new policy forces hospitals to conduct extra screening tests upon patient admission to ensure fair payment for treating complications not caused by the hospital. Many patients, for example, contract urinary tract infections during hospitalization (from catheter use, for instance). Treatment for such infections would not be reimbursed under the new policy. Financial solvency issues for hospitals arise when it is unclear whether a condition developed before or after hospital admission. Hospital records typically do not indicate this information, unless the patient was aware of the preexisting condition and notified the physician upon initial examination. Additional testing increases hospital costs.

Hospitals are also ultimately responsible for the cost of readmissions that may be another care provider’s fault. Certain readmissions may be due to a lower quality of follow-up care after the initial hospitalization. The blame in this case should be rightfully placed upon the primary care providers hired after the hospitalization. There is also the possibility that the patient returned to the hospital for the same condition because he was unable to purchase prescription medication due to financial or language barriers. The data collection, extra laboratory tests, and potential unfair penalization of hospitals lead to greater costs for the hospital, which are transferred to patient bills. This equates to greater costs for Medicare and insurance companies, which make up for the extra cost by mandating higher copays, premiums, and deductibles, or reducing health care benefits overall. In the end, the individual patient and the public are worse off.

By analyzing the positive and negative implications of the decision by Medicare and insurance companies to refuse reimbursement for hospitals for complication reversals and errors committed during the initial hospitalization, one can assert that the greater costs incurred by hospitals in the form of data collection, extra lab testing, and unfair penalization detracts from the cost savings initially proposed as a positive result of the policy. The new policy will result in greater costs for hospitals and may potentially decrease access to care for some patients. The best implication of the policy is superior care for the patient across the health care continuum because subpar care will no longer be incentivized by additional reimbursement.