Penalties make hospitals accountable

Sooner or later the medical profession is going to have to realise that health funders are serious about no longer simply paying for medical ‘inputs’ but are serious about paying for ‘outputs’ — quality outcomes for patients.

Aided and abetted by an increasingly health literate population, with smart watches and mobile internet, both consumers and funders want to know more about the care being provided. And why shouldn’t they?

The government’s proposal to penalise hospitals for preventable mistakes which cause death or serious harm — i.e. ‘sentinel events’ such as operating on the wrong person, a newborn being sent home with the wrong family, patient suicide and fatal medication errors — will launch on July 1 of this year.

Public hospitals will not receive funding for any episodes of care that contain a sentinel event, potentially saving taxpayers millions of dollars.

The real objective, of course, is to improve safety and quality across Australia’s public hospitals — which still fail to meet benchmarks and demonstrate significant clinical variance.

State health departments maintain that half the sentinel events to attract a penalty are “not preventable” and the list should be narrowed. Nevertheless, it is anticipated the policy will be extended to include other hospital-acquired complications; a step the AMA is hoping to delay until 2020.

Other critics argue the new regime will encourage hospitals to hide mistakes: so much for open-disclosure and patient-centred care, not to mention the integrity of health professionals.

More alarmingly, some commentators have suggested that sentinel events (even if they are acknowledged) don’t reflect hospital quality. The argument that financial penalties are unlikely to significantly improve “the bottom line” on health spending misses the point about greater demands for the transparency of health outcomes.

A good way to improve outcomes — and one that has been successful in other sectors of the economy — is consumer feedback. Penalising hospitals for medical errors is just a different, and very valuable, kind of feedback. And one that holds hospitals accountable for the care they provide.