Friday, August 1, 2008

No pay for bad performance

Medicare will stop paying hospitals for making errors:

Medicare officials announced Thursday that it no longer will pay the extra-care costs associated with treating dangerous blood clots in the leg following knee or hip-replacement. The program also will not pay extra for complications stemming from poor control of blood sugar levels.

EXTRA CREDIT: if reports of blood clots or poor control of blood sugar decline, is it because hospitals are making fewer errors (moral hazard) or because they are accepting fewer patients suceptible to these complications (adverse selection)?

1 comment:

  1. Heatlh care providers are accepting less patients. If Medicare no longer pays for extra care, then providers do not have the incentive to provide it. When accepting patients, providers will show preference for those less likely to develop these complications.