Hospital Acquired Infections (HAI) are a big deal in US healthcare:

  1. They cost U.S. hospitals as much as $45 Billion per year.
  2. On any given day, approximately one in 25 U S patients has at least one infection contracted during the course of their hospital care
  3. In 2011, there were an estimated 722,000 HAIs in U.S. hospitals and 75,000 of the patients died.

CMS stopped paying for certain Hospital-Acquired Conditions in 2008 and the numbers seem to indicate that it’s helping.  The CDC’s Healthcare-Associated Infections (HAI) Progress Report describes “significant reductions reported at the national level in 2014 for nearly all infections when compared to the baseline data”.  That sounds great, but it may not prove that we’re making progress in the fight against HAIs.

As with all incentives and regulation, there’s the risk of initiating the Cobra Effect.  That’s when an incentive (or penalty) is put in place to address a problem, but through some unforeseen consequence it actually makes the problem worse.  There’s some evidence of that happening here.

Fudging the numbers

A Stanford study tells us How Hospitals Avoid Penalties for Making Patients Sick. It suggests that “instead of spurring tighter standards of care, the penalties are prompting hospitals to simply upcode their records and claim that patients were already infected at the time they were admitted.”  The study found that hospitals in weakly regulated states reported substantially fewer rates of hospital-acquired infections and higher rates of infections that were present on admission than hospitals in more tightly regulated states. In other words, the hospitals that can get away with it just fudge the numbers to avoid penalty.  If true, not only are hospitals not being penalized for their mistakes, but they might actually be getting paid more due to the upcoding.

That may seem a bit like conspiracy theory, but CDC and CMS jointly released a statement that said:

“In response to anecdotal reports of intentional non-reporting of infection data, CDC and CMS are jointly issuing a reminder that addresses concerns about healthcare facility non–reporting of healthcare-associated infections events.”

The statement gives two specific examples of bad behavior:

  1. Hospitals are testing patients for infection upon arrival even if they’re showing no clinical symptoms of infection. This way they’re able to catch all infections that are present on admission and avoid potential penalties when they’re detected later on. This subjects many patients to unnecessary tests and increases the overall costs of care.
  2. Discouraging the ordering of diagnostic tests in the presence of clinical symptoms (i.e. if you don’t check for infections you won’t find any).

So we may have increased health costs and decreased patient safety. That’s the cobra effect at its worst.

Punishing the best

When it comes to HAIs, the New York Times says Medicare penalizes hospitals for being too careful.  Some of the hospitals being fined are amongst the most-respected in the country. The list released in December 2015 includes Stanford, Cleveland Clinic, Brigham and Women’s Hospital, Intermountain and Geisinger. The concern is that hospitals are being “perversely penalized because they’re so aggressive in screening for problems” and that in some cases they’re forced to focus on the wrong thing. Northwestern Memorial Hospital’s Dr. Richard Wunderink said:

“There’s no penalty right now for pneumonias. We are spending time on things that are maybe less important from a patient care perspective but more important from a financial perspective.”

Maybe hospitals aren’t the ones to fix this

In recent paper on, Niall Wallace, Brett Cropp and Dr. John Coles argue that insurance companies are really the ones paying the price for HAIs. They suggest that “preventing many HAIs may be far more difficult for hospitals to accomplish than by incentive alone, or that hospitals are avoiding the intended goal of reducing infections by placing the financial burden on the insurers”. Since insurers currently incentivize hospital improvement initiatives and would be the direct financial beneficiaries of reductions in HAIs, they are “uniquely placed to seriously drive these strategies.”

#hcbiz 22 Discussion Details

3:00 PM EST – Tweetchat

We’ll setup this week’s show with a tweetchat from 3-3:30 PM EST (12-12:30 PST).  We’ll ask 3 questions in 30 minutes:

Q1: Given their high volume and potentially lethal consequences, why aren’t Hospital-Acquired Infections regular, national news?

Q2: Who is best situated to combat the problem of Hospital-Acquired Infections? Hospitals? Payers? CMS? Other?

Q3: Insurers stand to save a ton of money if they help reduce the rate of Hospital-Acquired Infections? Why aren’t they pushing the envelope more?

Follow the #hcbiz hashtag on Twitter or use an app like to join the conversation.

12:30 PM EST — Blab

Join me (@dflee30) and co-host Shahid Shah (@ShahidNShah) for this Startup Showcase. We’ll begin with the typical #hcbiz format where we dissect the issue at hand to try and understand what it is, why it is and what we should be doing about it. Then, we’ll give our startup founder the opportunity to make their pitch and open up the session for questions and feedback from the community.

Our goal is to give the startup a chance to get the word out, but more importantly to offer them constructive feedback, help make needed connections and generally help them in any way that we can.

Our startup founder this week is Niall Wallace of Infonaut.  According to their website: Infonaut is solving the global challenge of Hospital Acquired Infections (HAIs) through a behavior improvement, analytics, and proprietary real-time surveillance platform.

Our guest panelist is Dave Thiemecke of VCAMP; a digital Health accelerator for very early stage companies and ideas with a strong focus on improving the delivery and economics of healthcare.