Medibank Private’s adverse events payment system

The idea of 3rd party funders not paying for procedures which experienced complications commenced in America in 2007 when US Medicare and Medicaid stopped paying hospitals for additional costs for what they called “10 preventable medical errors” (also known as ‘acquired hospital conditions’).

The idea soon spread to the UK and the list of ‘preventable medical errors’ grew as 3rd party funders saw a means to cut expenditure in the name of quality assurance. So what’s wrong with funders withholding payment when they believe that a preventable error or event has occurred? The problem is that it is often difficult to determine what a medical complication is, and what a ‘preventable’ adverse event is. It is easy to label a less than optimal outcome of medical treatment ‘preventable’. However, in reality, the issue of what is preventable is hotly contested in medical circles. The Australian Commission on Safety and Quality in Healthcare has recently published a list of 40 hospital acquired conditions, but has not used the term ‘preventable’.

According to QLD physician, Dr Chris Davis, former Assistant Health Minister in QLD, “A 2012 study found no evidence that financial disincentives reduced infection rates and no situations where patients appeared to benefit from the implementation of this policy,” and “Broader experience with the use of financial incentives to deliver health policy outcomes indicates that in many cases, such interventions have failed to deliver anticipated benefits.”

The ADF supports all positive measures that can be shown to improve outcomes for patients without unintended consequences. Australian doctors are legally accountable to patients for their work. The Australian medical profession has a proud history of adopting quality assurance methods where they are clearly demonstrated to be of benefit to patients. Thousands of hours of training and work time are devoted to quality assurance measurement and implementation. Medical literature and medical colleges are constantly being updated with the latest findings and trends in every specialty and subspecialty. In the computer age, medical procedures are always being analysed and improved. As a result of these and other innovations in public health (such as vaccinations and public health standards), Australian enjoy the second longest life expectancy in the world and meeting the challenge to improve indigenous health outcomes (closing the gap) could make Australia the longest living people on earth.

According to the co-author of the CareTrack Australia Study (examining evidence based care of common conditions), Professor Jeffrey Braithwaite, “The most remarkable thing about modern healthcare is not what goes wrong, or how much money is wasted but how successful we usually are. The more we understand what helps us get healthcare right, the better the prescription for our health system in the future.”

“Our doctors, nurses, administrators and support staff are intuitively nearly always right. Yet we don’t invest in research to tell us how these millions of encounters work effectively; that is, when the system is performing at its resilient best, flexing to accommodate the unexpected.”

Whilst there will always be debate between hospitals and health funds over payment criteria, the ADF maintains that withholding payment for alleged preventable events runs the risk of increasing uncertainty, particularly in the elderly of the value of their private health insurance and may result in the shifting of some patients into the public hospital system when there is a possibility of complications associated with their surgery because of the nature of their illness and related co-morbidities. Of particular concern is any attempt to financially punish re-admissions or bring pressure on hospital administrators and doctors to ‘cherry pick’ patients for financial reasons rather than clinical indications.


Managed Care