$6.9 million.
That’s the error tax “average US employer” pays for hospital errors, given 1,000 admissions in a year for all covered lives.
The Leapfrog Group got that number from its new calculator. It’s designed to help employers figure out the hidden tax that comes from getting care from C, D or F hospitals. The group used data from its Hospital Safety Score site and employer claims data to calculate the error tax. Employers can put their own numbers in the tool to figure out what their number is.
Using the Hospital Safety Scores, Leapfrog estimates that on average, for a patient admitted to a hospital with a grade of “C” or lower, purchasers pay $7,780 in hidden surcharges due to medical errors.
The goal is to push employers to use only “A” hospitals, although LeapFrog admits that even the best hospitals have patient safety problems and a hidden tax, even if it’s smaller than the surcharge at other hospitals.
Part of the $6.9 million is lost productivity for every dollar spent on inpatient care. If you are inputting your own company’s numbers in the spreadsheet, you can enter zero to see only the cost of the care itself in surgical and critical care admissions.
To calculate the estimates, Leapfrog use only nationally available data:
Leapfrog reviewed literature on the costs of errors, accidents and injuries occurring in U.S. hospitals. We divided the cost estimates into twocategories: disclosed and undisclosed errors. Disclosed errors are those publicly reported to the federal government by hospitals. As the HospitalSafety Score only uses publicly available measures, the disclosed errors category was restricted to the 26 measures used to calculate the Hospital Safety Score Letter Grades.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Leapfrog said its analysis showed that its Hospital Safety Score letter grades are a good prediction of hospital performance on several key, undisclosed hospital errors.
With guidance from its expert panel, Leapfrog identified 26 safety measures for which national data were publicly available. To estimate the hidden surcharge, we calculated the mean value for each measure in the Score by grade level.
The calculation also takes into account inflation and the fact that private insurers reimburse providers at significantly higher rates than Medicare. There is a white paper that explains the project and a second spreadsheet that lists the sources and assumptions for the calculations.
I don’t have the data to run a test calculation for the team at MedCity News and test the assumptions, but this seems like another important step in more transparency around healthcare pricing. Hopefully it will make it that much easier to employers to pick the best providers and for providers to make performance and pricing data easier for everyone to get.
