The real money is in the mistakes

The following video is valuable to watch. It discusses the significance of medical error as a cause of death and injury in hospitals in the US (and likely all over the world). Many of the facts presented are correct but at a certain point, the video takes on a tone that sounds as if it is exposing a conspiracy theory about the pharmaceutical industry. You can argue about what is legitimate business practices when health care is involved. But you need to stay clear of extreme statements.

For example, at one point, the video claims that vaccines are part of the over prescribing practice of modern medicine. This is simply incorrect. Vaccines are relatively inexpensive (overall) and are incredibly cost-effective in terms of preventing disease. And preventing disease is the best way to deal with disease. And vaccines do not cause autism. That is the latest research. Word of mouth does not constitute proof.

I should also point out that there is NO connection between prices for medications/profits by pharma companies and medical errors. Yes, there are lots of medications around and the more meds, the greater likelihood of an error. But that does NOT constitute guilt on the part of pharma for the medication errors.

Barring such technical errors with the video presentation, I still think this video is valid. Now, I want to address the issue of medical errors, the statistics of which are presented at the beginning of the video. I have heard these statistics many times before. What is fascinating is that no one seems to be taking them seriously. Why could that be?

The question you really have to ask is, what does it cost to have a patient get sick or even die from a medical error. If the hospital gets paid anyways and is not sued for the error, then in fact there is no advantage to stopping such poor care. If the patient stays in the hospital longer and generates more billing to the insurance company, then there really is no advantage to getting the care right.

Stopping mistakes would unquestionably cost money. You would have to institute more oversight or better software to track medical procedures and to spot errors before they occur. All of this is expensive.

As frightening as it may sound, you have to find a business reason to deliver good care. Of course, there are many doctors and even many hospitals that focus first and foremost on the patient. But if they run out of money, they will unfortunately close. If you want every hospital and individual doctor to put in the effort to avoid mistakes, you need to have a successful business plan. 

There is no question that limiting medical errors is an area that deserves tremendous research and solutions, many of which can come from startup companies. If a startup has a mechanism for reducing such medical errors, it should become very wealthy very quickly. But this is simply not the case. The startup must show that they save more money than they cost, for the reasons I noted above. This is the foundation for anyone trying to truly fix this problem.

I should also point out that the situation is different in the United States than any other country where they have a socialized system of medicine. In a socialized system of medicine, the payer ultimately pays for all the care whether in hospital or in the community. In a private system, a hospital has its own costs and profits and the HMO has its own costs and profits. And the success of one can impinge on the other. Therefore the socialized system of care may be much more interested in reducing medical error (because the payer always pays no matter where the error happens) than a private medical system (where the hospital could make money from such errors while the HMO loses money).

I have discussed medical errors regarding medications, before in this blog. I do not want to review options for reducing all kinds of errors here. I simply want people to appreciate that CEOs of hospitals and medical services focus first on paying the bills. We need smart people to come up with solutions that are favorable financially and medically. Simply put, if you can save money AND lives, then you have a golden product.

Thanks for listening



About the Author
Dr. Nahum Kovalski received his bachelor's of science in computer science and his medical degree in Canada. He came to Israel in 1991 and married his wife of 22 years in 1992. He has 3 amazing children and has lived in Jerusalem since making Aliyah. Dr. Kovalski was with TEREM Emergency Medical Services for 21 years until June of 2014, and is now a private consultant on medicine and technology.
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