Australia’s health system would save about $1.5bn a year if all hospitals became as safe for patients as the top 10%, a Grattan Institute report has found.
The report, Safer Care Saves Money, found one in nine hospital patients suffered a complication, costing public hospitals more than $4bn a year and private hospitals more than $1bn a year.
“We showed that if the safety performance of all hospitals was lifted to the level of the best 10% of hospitals, an extra 250,000 patients would leave hospital each year free of complications,” the report, by health economist Prof Stephen Duckett and medical safety expert Prof Christine Jorm, found.
“And, for the first time in Australia, we estimate the savings that could be made by realistic reductions in complication rates: about $1.5bn a year.”
Public hospitals receive extra government funding for treating a sicker patient, even if that patient becomes unwell because of a complication suffered in the hospital.
“However, our analysis of Australia’s 20 biggest public hospitals shows that, in every case, the cost of complications was larger than the increase in funding the hospital received,” the report found. “On average, the extra cost of complications was more than three times the extra revenue from complications.”
The authors argue that instead of financial incentives to reduce complication rates, hospitals need better information about curbing and avoiding complications such as hospital-acquired infections, adverse events and medication errors.
Complication rates and accreditation outcomes should be made public, the authors said. The report said the current system of hospital accreditation did not improve patient outcomes.
“Doctors dismiss it as irrelevant, or worse, a waste of their time; it provides no incentives for excellent safety performance; and accreditation reports are kept secret.
“Practically every significant safety failure in Australian hospitals in recent decades – from Bundaberg in Queensland to Camden and Campbelltown in New South Wales, Bacchus Marsh in Victoria and, most recently, a gas mix-up at Bankstown-Lidcombe hospital in NSW – has happened in a hospital that had passed accreditation with flying colours.”
The chief executive of the Consumers Health Forum, Leanne Wells, said she supported more information being made public about the cost and revenue resulting from complications, and a more open and effective accreditation system.
“These changes should appeal to state governments and hospital managers as a means of improving their bottom line by realising up to $1.5bn in estimated savings which could finance hospital care for an additional 300,000 patients,” she said.
“We particularly welcome the public reporting of hospital quality and safety issues in a way that does not alarm the community. The report makes the point that with the publication of detailed accreditation reports, citizens would be better equipped to hold elected governments responsible for hospital performance.”
But the CEO of the Australian Healthcare and Hospitals Association, Alison Verhoeven, said the report failed to acknowledge the work being done across the health system to curb complication rates and improve safety.
“Improvement is always a goal – suggestions that our hospitals are wasting resources and not aspiring to quality are unfair and do not acknowledge current quality initiatives right across the health system,” she said. “Our hospitals are safe – and getting safer every day.”
On Friday the Australian Commission on Safety and Quality in Health Care published a review of the Australian Health Service Safety and Quality Accreditation scheme, which found inconsistencies, with some health services being assessed every three years and others every four years, and a wide variation in how assessments were undertaken.
