Hospitals seek to hike prices by up to 15% as safety, quality concerns grow

howardhospitallogoHospitals have raised major alarms with insurers, businesses, and patients by asserting that spiking costs for medical staff, especially nurses, will lead them to increase their prices in the days ahead by as much as 15%.

This would be a budget-busting move, breaking contracts the caregiving institutions have struck with employers and insurers, leading not only to potential premium shocks but sharply higher charges for patients, the Wall Street Journal reported.

The newspaper noted that the soaring hospital price plans are coming up in negotiations now among chains like HCA Healthcare and Universal Health Services, companies, and insurers, differing markedly from typical discussions on this always tough issue:

“The requests are more than the 4% to 6% price increases hospitals typically seek, according to employers and insurers. The hospitals have usually won an average 3% price increase in recent years, according to Altarum, a nonprofit that does health care research.”

Warnings about hospital harms

While hospitals seek to blame nurses for their current financial bind, their pricing demands likely will not sit well with their major customers: patients. Most of them, of course, praise hospitals for their recent fortitude in battling the coronavirus pandemic in too often dire circumstances. At the same time, though, critics say that the quality and safety of care at too many hospitals fell off significantly as institutions were overwhelmed by coronavirus cases.

A federal watchdog has sounded major alarms about the issue, USA Today reported, noting:

“One in 4 older Americans covered by Medicare had some type of temporary or lasting harm during hospital stays before the Cobif-19 pandemic, government investigators said in an oversight report …The report from the U.S. Department of Health and Human Services Office of Inspector General said 12% of patients had ‘adverse events’ that mainly led to longer hospital stays but also permanent harm, death, or required life-saving intervention. Another 13% had temporary issues that could have caused further complications had hospital staff not acted. Investigators reviewed the medical records of 770 Medicare patients discharged from 629 hospitals in 2018 to formulate a national rate on how often patients were harmed, whether preventable or not. An earlier Inspector General review published in 2010 found that 27% of patients experienced some type of harm – an investigation that led to new patient safety efforts and incentives … While Inspector General investigators noted improvements in certain safety measures, officials said the 25% harm rate is concerning and deserves renewed attention from hospitals and two federal agencies that oversee patient safety: the Centers for Medicare and Medicaid Services and the Agency for Healthcare Research and Quality.”

Those agencies and others have scrutinized giant stresses put on the health care system and how they also brought to light the difficult and economically disparate role that nurses play in hospitals — providing crucial front-line care but too often with too few personnel getting paid too little, critics say. Nurses showed their unhappiness with their lot by leaving hospitals in droves and demanding new, significantly higher wages, as the Wall Street Journal reported:

“Nurses’ salaries, overtime and bonuses have increased during the pandemic, as the strain pushed some into early retirement while others left for higher-paying temporary jobs traveling to virus hot spots. As of March, average yearly base pay for hospital nurses reached $86,674, up 9% from $79,172 in June 2021, when the Delta variant took hold in the U.S., according to Premier Inc., a health care consulting, contracting and data-analytics company, which analyzed salaries of about 116,000 nurses.”

When hospitals try to recoup part of these higher labor costs, though, the shocks will reverberate, too, the newspaper reported:

“Hospitals are one of the primary drivers of U.S. health spending, accounting for $1 trillion a year, according to federal actuaries. Compensating the roughly 1.9 million nurses who work at hospitals nationwide is a big part of their costs.”

When hospitals will resume fuller normality from the pandemic and their broad responsibilities for safe, excellent patient care is less clear, and the institutions, particularly in the nation’s capital, have a ways to go, as the annual ratings issued by the Leapfrog Group show.

A dearth of top-rated D.C. hospitals

The group describes itself as a “nonprofit watchdog organization that serves as a voice for health care consumers and purchasers, using their collective influence to foster positive change in U.S. health care. Leapfrog is the nation’s premier advocate of transparency in health care—collecting, analyzing, and disseminating data to inform value-based purchasing and improved decision-making.”

Its hospital ratings are based on multiple criteria and are put together and evaluated by experts. Still, they can be controversial, sufficiently so that multiple big-name hospitals with big reputations denounce the scoring, declining to provide data, and asserting the group’s results downgrade institutions that treat more patients, more of the poor, and those with complex, chronic conditions.

The annually issued grades have provided few surprises, with Washington, D.C., lacking any top-rated hospitals (and one persistent laggard, Howard University Hospital, rated an “F”), while Virginia, in contrast, standing as a national leader with multiple “A” rated hospitals. Maryland’s hospitals earn a mix of grades, with several “A” institutions (including Johns Hopkins and two University of Maryland facilities) and two “D’s” (Northwest Hospital and University of Maryland Capital Region Medical Center.)

Not good. In my practice, I see the harms that patients suffer while seeking medical services and the damage inflicted on them and their loved ones by grievous problems in the U.S. health care system, notably medical error, misdiagnoses, as well as over testing and over treatment.

In pre-pandemic times, medical errors claimed the lives of roughly 685 Americans per day─ more people than died of respiratory disease, accidents, stroke and Alzheimer’s. That estimate came from a team of researchers led by a professor of surgery at Johns Hopkins. It meant that medical errors ranked as the third leading cause of death in the U.S., behind only heart disease and cancer.

The coronavirus, of course, has risen has a leading killer of Americans, but there is little reason to suspect that the too often overwhelmed U.S. health care system improved its quality or safety during the chaos of the pandemic.

Under pandemic duress, wrong determinations about patient conditions, no doubt, occurred, likely with greater frequency. Just to remind of further pre-pandemic research findings in this area:  Diagnostic errors affect an estimated 12 million Americans each year and likely cause more harm to patients than all other medical errors combined, studies have found. And misdiagnoses boost health costs through unnecessary tests, malpractice claims, and costs of treating patients who were sicker than diagnosed or didn’t have the diagnosed condition. Experts recently noted in a health care online report that inaccurate diagnoses waste upwards of $100 billion annually in the U.S.

We have much work to do to ensure patients that their hospital care is accessible, affordable, safe, and excellent.

Patrick Malone & Associates, P.C. listed in Best Lawyers Rated by Super Lawyers Patrick A. Malone
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