The cost of complications


The cost of complications

Healthcare ratings company Healthgrades has produced a report that highlights dramatic differences in quality and safety between hospitals—and also the financial cost of increased mortality and complication rates. HRMR asks what can be learned from these findings.

The American Hospital Quality Outcomes 2014: Healthgrades Report to the Nation from healthcare quality and safety ratings company Healthgrades makes informative reading for risk managers. It emphasizes the fact that not all hospitals are equal, showing that variations in clinical outcomes exist, even within the same city.

In Atlanta, for example, 24 hospitals were evaluated for stroke and although these hospitals are within minutes of each other, risk-adjusted in-hospital mortality rates ranged from 0.8 percent at the low end to 13.4 percent at the high end—a 17 times higher risk of death.

Healthgrades evaluated data from 40 million patient records from 4,500 hospitals nationwide to generate its report, which gives a useful overview of the inconsistences that exist across US healthcare.

“The report highlights why quality is important as we move further into the implementation phase of the Affordable Care Act (ACA),” says Sonja Baro, vice president, quality products & media for Healthgrades. “We highlight how three stakeholders in healthcare—hospitals, physicians and patients—each have a role to play in reaching the goals of improving quality and lowering costs.

“Risk managers play an important part in improving quality, and the report spotlights several areas that they are most likely to be focused on—such as lowering unexpected complication and in-hospital mortality rates. In addition, we highlight how length of stay and increased mortality and complication rates are connected to the direct costs hospitals incur.”

The effect on costs is dramatic: the report found that direct costs of caring for a patient who experiences a complication will, on average, increase to nearly double the costs for patients who did not experience complications. For mortalities, direct costs tripled.

“The data show that direct costs incurred by hospitals increase for both mortalities and complications—mainly due to the increase in length of stays,” says Baro. “With increasing pressure on lowering costs this could be an area for risk managers to assist their organizations in improving their financial health.”

When Healthgrades looked at the risk of mortality across the entire US hospital base it found that the highest amount of risk was in COPD, followed by colorectal surgeries, pneumonia, stroke, heart attack and sepsis. In complication-based cohorts it found the largest amount of risk was in hip replacement surgery, then carotid surgery, knee replacement and gall bladder surgery.

A connection between unexpected complication rates and the method used in certain procedures was also found.

“It shows the benefits of evaluating whether minimally invasive surgery is an option,” says Baro. “Opportunities to use these techniques, if clinically appropriate, should be explored.”

She adds that such findings can be a useful tool to risk managers seeking to demonstrate the value of their role to their organizations.

The report—and its power to influence customer decisions—will undoubtedly set many healthcare professionals wondering how to raise a hospital’s Healthgrades rating. Since the rating is based on an evaluation of clinical outcomes as documented by the hospitals, the key is to identify the variation, where it is occurring, and research the detail for the specific cases, advises Baro.

“This usually requires chart reviews and discussions of specific processes, including intake protocols, documentation requirements and care protocols,” she says. “Hospitals who take the time to understand what the rating means, and what the data behind the rating is highlighting, find they can make changes that have real impact.

“In many cases they find by zeroing in on the ‘symptoms’—the actual cases behind the rating—they can then identify the cause and can make changes that correct the process. When those changes are implemented and we see in the data a reduction in either mortalities or complication rates, the ratings follow accordingly.”

Baro adds that recent healthcare legislation is helping to improve quality by putting a connection between reimbursements and quality performance and has helped broaden the reasons to focus on quality for US hospitals.

“The ACA helped to put more emphasis on the costs, availability and transparency of healthcare. We believe that the more transparency and information you have, the more you can drive improvements in clinical performance, save lives and decrease costs. All these are goals of the ACA,” she says.

Despite these advances, Baro concedes that the question of why some hospitals perform so much better remains difficult to answer.

“We asked that question ourselves and our next report features what high performing hospitals say has made the difference for them,” she says. “I wish we could answer that question across the board—all hospitals are dedicated to providing high quality care for their patients. They use evidence-based medicine, process measures and other techniques, yet we still see dramatic variation. Our data can only show what the outcomes are—not the why.

“That’s where risk managers play a pivotal role—their expertise in identifying where to focus, root causes and steps for improvement, combined with the clinical input and analysis provided by others focused on quality is necessary for organizations to make meaningful, lasting change.

“Being aware of the larger picture—inclusive of costs and reimbursements—and looking to innovations both in and outside of healthcare and championing the cause of quality are all ways risk managers can help lead the way to improved quality and lower costs.”

Summary of Healthgrades' 2014 report to the nation

1. Patients’ choice of health plan can influence the outcome when having hospital care. Since healthcare networks identify what care providers users can access it’s important to evaluate those doctors and the hospitals where they provide care.

2. Not all hospitals perform equally—variations in clinical outcomes exist, even within the same city.

3. Higher complication and mortality rates not only have a personal impact on patients, they have a financial impact on the healthcare organization.

4. Minimally invasive procedures, if appropriate, can lower mortality/complication rates and direct costs. For colon resection surgeries, mortality rates were 2.5 times lower when performed using laparoscopic methods as compared to open surgery methods.

5. Every healthcare stakeholder has a role to play in improving outcomes and lowering costs:

a) Hospitals can improve outcomes and lower direct costs by focusing the causes and reducing complication and mortality rates.

b) Physicians can consider and offer minimally invasive procedures when clinically appropriate.

c) Patients can take charge of their healthcare by informing themselves regarding the performance of hospitals for the procedures they are considering.

Why quality matters

From 2010 to 2012, if all hospitals as a group, performed similarly to hospitals receiving 5 stars as a group, on average:

• 234,252 lives could potentially have been saved*

• 157,418 complications could potentially have been avoided*

*Statistics are based on Healthgrades’ analysis of MedPAR data for years 2010 through 2012 and represent three-year estimates for Medicare patients only.

The data show the difference in the risk of dying between a hospital receiving 5 stars versus 1 star for the six mortality-based procedures and conditions (average mortality rate for hospitals receiving 1 star versus average mortality rate for hospitals receiving 5 stars):

• Heart attack: 48.1 percent lower risk
• COPD: 81.0 percent lower risk
• Pneumonia: 65.9 percent lower risk
• Stroke: 54.6 percent lower risk
• Colorectal surgeries: 70.4 percent lower risk
• Sepsis: 41.9 percent lower risk

The data show the difference in risk of experiencing a complication between a hospital receiving 5 stars versus 1 star for the four primary complication-based procedures and conditions (average complication rate for hospitals receiving 1 star versus average mortality rate for hospitals receiving 5 stars):

• Total knee replacement: 63.4 percent lower risk
• Hip replacement: 69.1 percent lower risk
• Carotid surgery: 66.9 percent lower risk
• Gallbladder removal surgery: 52.5 percent lower risk

Additional data and examples are available within the full report, as published at

More information on the methodology

What do the star ratings mean?

Healthgrades’ ratings are scientifically determined by comparing the risk-adjusted expected performance against the observed performance of that hospital. When observed performance is statistically significantly better than the risk-adjusted expected performance (complications or mortality rates) for a particular cohort, a rating of 5 stars is designated for the particular cohort being evaluated.

When observed performance is statistically significantly worse than the risk-adjusted expected performance for a particular cohort, 1 star is designated for the particular cohort being evaluated. When observed performance is not statistically significantly different from expected performance, 3 stars are designated for the particular cohort being evaluated.

How is the risk adjustment done?

Healthgrades risk adjusts for severity of patients and takes into consideration demographic attributes (gender, age), procedure and comorbidity factors in its risk adjustment. Detailed information regarding the risk adjustment, including the list of complications, inclusions and exclusions, is available in the methodology white paper, available online for review.

Who is rated?

All US acute care hospitals participating in the Medicare program are rated. Hospitals can’t opt in or out. The approximately 4,500 hospitals evaluated every year represent about 90 percent of all acute care hospitals.

What measures does the Healthgrades report use?

Healthgrades examines risk-adjusted mortality and complication rates for 31 of the most common inpatient conditions and procedures, based on risk-adjusted models using MedPAR data, with mortality and complications outcomes.

It also looks at risk-adjusted mortality and complication rates for four inpatient conditions and procedures, based on risk-adjusted models using All-Payer data. In addition, it examines measures of patient safety based on Agency for Healthcare Research and Quality (AHRQ)-developed patient safety indicator (PSI) definitions and rates, and AHRQ software applied to MedPAR data, as well as taking into account patient experience based on Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) patient survey data; and readmissions rates and timely and effective care measures provided by the Centers for Medicare and Medicaid Services (CMS).

American Hospital Quality Outcomes 2014, Healthgrades Report, Sonja Baro, ACA, US