Why Medibank wants hospitals to be more accountable for mistakes…

It’s not surprising and rather nice to know that our large and quite heated discussion at Starts at 60 saw the Chief Medical Officer of Medibank contact us to explain why they are restructuring their agreements with hospitals this week.  Read it here: [“Readmission to hospital within 28 days might not be covered by your policy!“] .

Medibank was caught in a media storm this week after a part of their major contract changes with hospitals was leaked to the media. Their decision to place pressure on hospitals to have to pay for readmission costs themselves if a patient has to come back within a 28 day period for complications to a treatment got everyone talking.

The conversation with Dr Linda Swan, Chief Medical Officer of Medibank Private was enlightening. I dare say we should all consider the merits of the debate that a health fund holding a hospital accountable for doing a good job might be better for the patient than a health fund offering to pay out indefinitely for sloppy workmanship that might lead to someone’s demise.

Dr Swan was adamant in our discussion yesterday that Medibank has the interests of the patients at heart in their renegotiation of contracts with hospitals to include this new 28 day readmission rule.   And she assured me personally that no patient would have to pay for the change to contracts with hospitals.

She went on to explain…

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“If you go in for a hip replacement, we will of course pay for the cost of the hip replacement and your normal length of stay in the hospital. If you fall out of bed and break your arm and that extends your hospital stay, then we are negotiating with the hospital that they cover the cost of the extended stay to ensure their continuity of treatment is a priority.”

The intent seems to be that the hospitals agree to absorb the additional cost associated with the complication and it drives them to have a greater obligation to care in the post-treatment phases of ailments in future in their attempt to reduce their own costs.

“Bizarrely, the reverse happens at the moment, if you go into hospital and there is a complication or adverse event, and the procedure doesn’t go well, the hospital gets paid more for that than if it was a fabulous procedure where there was no complications.

“That is a crazy perverse incentive and we think the better incentive is that the hospital should bear the cost. The good news is complication happen to less than 1%,” she said.

Dr Swan also assured me that those people suffering from cancer or severe and chronic disease which sits within a selected group will not be held under this rule. If it is “treatment” you are expected to come back time and time again for it.

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Interestingly, when I spoke of a dear loved family friend who passed away from non cancer complications after a cancer surgery several years ago, the conversation took another path. She says these are one of the biggest areas of concern that Medibank is trying to tackle.

“People with cancer are more prone to develop infection, that doesn’t mean that we shouldn’t and cant do things to stop infections from occurring. Infections in people with cancer are a major cause of morbidity and mortality (sickness and death)

Consequently, we should be calling out for more to be done to prevent infections in people with cancer. Our view is that there is more that can be done. But, given all the advancements in modern medicines, we’re not seeing the expected reduction in these complications in hospitals at this time, so we’ve decided to obligate it.

“Our best customer is one who lives long and well,” said Dr Swan in closing.

It is interesting to note that Calgary Hospitals have reentered negotiations with Medibank Private after previously abandoning talks.

Does it sound like the right thing to be doing to drive hospitals to greater financial accountability for bad service?  How do you feel hearing it from this angle?