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A recently published article in the Journal of the American Medical Association states that surgical complications bring in more money to hospitals, on average $40,000 per privately insured patient. Is this why surgical complications are so common?

Medical care in the United States is extremely expensive. Botched medical care in the United States is even more expensive.

Robert received six stents in five procedures for blocked arteries after a heart attack, and after six weeks in the hospital was released with a bill of $474,301. Ten days later his cardiologist told him, "Oops, we really should have done a bypass," and he was readmitted for another hospitalization that cost $250,000.

Jill was diagnosed with a cancerous bone tumor in her right leg. The surgeon, however, amputated her left leg. She had to have her right leg amputated, too, and her insurance company was billed for both procedures. 

Reggie was admitted to the hospital to receive a pacemaker. When the interventional cardiologist took a look at his EKG, however, he realized that Reggie probably wouldn't survive cardioversion, restarting the heart, which is required if a pacemaker is installed. Not willing to waste half an hour in the operating room, however, the surgeon just installed a defibrillator instead, at a cost of $45,000. Three months after the procedure the same doctor put Reggie in a hospice program, and Reggie died six weeks later. Reggie's family was horrified that the hospice nurse did not know how to turn off the defibrillator after Reggie died.

Doctors are human. They make mistakes. But unlike other humans, doctors get paid whether they are right or wrong. And hospitals do, too.

In fact, mistakes make hospitals lots of money. A team of researchers affiliated with the Massachusetts Eye and Ear Infirmary and Harvard Medical School, publishing their findings in the Journal of the American Medical Association found that:

  • Depending on the procedure, between 3% and 17% of patients suffered at least one post-surgical complication.
  • The average cost of a surgical complication was an additional $8,084, when all payment types (self-pay, Medicaid, Medicare, and private insurance) were considered.
  • The average post-surgical complication netted the hospital system the authors studied $1,749 per patient when Medicare paid the bill.
  • The average post-surgical complication netted the hospital system the authors studied a whopping $39,017 per patient when private insurance paid the bill.

So when doctors make mistakes, hospitals make more money. The clear finding of this study, which only considered nine common surgeries, ten common complications, and 12 hospitals in a non-profit hospital system in the southern United States, is that hospitals don't have an incentive to get you well. They have an incentive to treat you longer. What can you do about that?

Continue reading after recommendations

  • Eappen S, Lane BH, Rosenberg B, Lipsitz SA, Sadoff D, Matheson D, Berry WR, Lester M, Gawande AA. Relationship between occurrence of surgical complications and hospital finances. JAMA. 2013 Apr 17. 309(15):1599-606.
  • Lapar DJ, Bhamidipati CM, Walters DM, Stukenborg GJ, Lau CL, Kron IL, Ailawadi G. Primary payer status affects outcomes for cardiac valve operations. J Am Coll Surg. 2011 May. 212(5):759-67. doi: 10.1016/j.jamcollsurg.2010.12.050. Epub 2011 Mar 12. PMID: 21398153.
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