Medicare and health-care errors

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For decades, Medicare has been paying hospitals the cost of fixing medical errors that resulted from the hospitals' own negligence. The Bush administration has announced that, as of Oct. 1, 2008, Medicare will no longer pay hospitals for treatment caused by these preventable medical errors. You would think the reasonableness of such a policy would have been self-evident long ago. These new rules will help in the future, but the money that Medicare has paid to correct past mistakes — payments amounting to billions of dollars — should be refunded and the Bush administration has the power to make it happen.

Under these long overdue new rules, if a hospital leaves a sponge in a surgical patient, Medicare will no longer pay for its removal. If the hospital operates on the wrong limb or the wrong patient, Medicare won't pay for the erroneous surgery. And if the patient develops preventable pressure sores., Medicare won't pay for the cost of healing them, nor should they. In each instance, those costs will have to be borne by the hospital whose neglect was responsible for the error.

We have had a veritable explosion of medical malpractice in hospitals in America since the 1980s — especially among older Americans. HealthGrades, an organization that rates the performance of health care providers, estimates that Medicare beneficiaries suffer as many as 250,000 potentially preventable deaths in hospitals every year. Is it any wonder? Former chief of the Center for Medicare & Medicaid Services, Dr. Mark McClellan, provided some insight into the root cause of the problem, when, in testimony before the Senate Finance Committee, he stated that the extra revenues received by the providers for care caused by their own neglect constitute "perverse payment incentives."

How much of an incentive? So much that HealthGrades estimates that Medicare paid more than $9.3 billion to cover the costs associated with medical errors suffered by Medicare beneficiaries during 2002-2004. At this rate, Medicare is paying over $3 billion per year to hospitals for substandard care. If you add nursing homes and outpatient clinics to the mix, the cost only escalates.

Ronald Reagan got it absolutely right when he said, "If you subsidize something, you get more of it." Sadly, through the Medicare system, this administration and its predecessors have been subsidizing medical malpractice by our nation's health care providers and the American people are paying dearly for it, not only in dollars, but in human lives and suffering.

Predictably, the hospitals are protesting the rule change. They complain that if Medicare stops subsidizing their mistakes, the cost of health care to the consumer might go up. But, Mr. Bush should not relent. On the contrary, he should go further, much further. Mr. Bush should insist that health-care providers whose negligence caused a need for additional treatment to Medicare patients reimburse Medicare for the cost of that treatment. Requiring repayment will improve the quality of care while lowering its cost (since the government will refuse to pay for substandard care). Such repayments will also improve the solvency of the Medicare Hospital Trust Fund, which is now slated to run out of money in 2018.

Notwithstanding that the existing Medicare system soaks the taxpayers and often harms our sick elderly, bold leadership on Mr. Bush's part will not come easy. The profits reaped by hospitals and health-care providers from the program have been staggering and the health-care industry has been a big backer of Mr. Bush and the Republicans. The time has come, however for Mr. Bush to show the same resolve on the domestic front that he is showing on the foreign front. We simply must recover the billions of dollars in overpayments that never should have been made in the first place. Justice demands it and taxpayers deserve it.

If the hospitals won't voluntarily agree to repay their ill-gotten gains to the government, Mr. Bush should make them cough it up.

The president will never be able to reclaim the mantle of fiscal responsibility lost by Republicans unless he takes aggressive steps to recover the billions of dollars in Medicare overpayments squandered on his watch.

Ken Connor is chairman of the Center for a Just Society.