Health Affairs, 25, no. 5 (2006): 1386-1393 doi: 10.1377/hlthaff.25.5.1386 © 2006 by Project HOPE	New Online   May/June Issue: Health Reform Revisited   Reform and '08 Election   Promoting off-label drug use information

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Medicare Payment For Selected Adverse Events: Building The Business Case For Investing In Patient Safety

This study estimates that Medicare extra payments under the hospital prospective payment system (PPS) range from about $700 per case of decubitus ulcer to $9,000 per case of postoperative sepsis in the five types of adverse events identifiable in Medicare claims. Medicare extra payment for the five types of events totals more than $300 million per year, accounting for 0.27 percent of annual Medicare hospital spending. But these extra payments cover less than a third of the extra costs incurred by hospitals in treating these adverse events. We conclude that both Medicare and hospitals gain financially by improving patient safety.

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