New Study Shows Financial Benefits of Improving Patient Safety
According to a 2013 study, more than 400,000 patients die in U.S. hospitals each year due to preventable medical errors. This figure, which is based on a analysis of existing data, is more than four times the previous estimate and points to the tremendous importance of enhancing patient safety in hospitals.
Health institutions, as cited in these studies, face competing tensions: the need to provide for outstanding care and patient safety while maintaining a financially sustainable institution. The difficulty in trying to deliver top-level customer service and maintaining reasonable costs and profit margins is a challenge that’s familiar to companies in myriad industries. But in healthcare, compromising patient safety for the benefit of the bottom line can have fatal consequences.
The new study, made available today by the Journal of Patient Safety, serves as a business case study for the financial benefits associated with improving patient safety. The study details how researchers from Adventist Health System (AHS) saved approximately $108 million in total cost, $48 million in variable cost, and $18 million in contribution margin by systemically identifying and reducing patient harm during a three-year period. The full report is available by request and on the Journal of Patient Safety’s website (link).
Press Release Follows
SOURCE: Adventist Health System; Pascal Metrics
New Study Shows Financial Benefit of Improving Patient Safety
WASHINGTON and ALTAMONTE SPRINGS, Fla., March 25, 2015 /PRNewswire/ — In a new study made available online today in the Journal of Patient Safety, researchers from Adventist Health System (AHS) and Pascal Metrics demonstrate how AHS saved approximately $108 million in total cost, $48 million in variable cost, and $18 million in contribution margin by systemically identifying and reducing patient harm during a three-year period.
“Some believe that hospitals have no financial incentive to reduce adverse events, but our most recent study shows there is a financial benefit to improving patient safety,” said Terry Shaw, Adventist Health System’s chief financial officer and chief operations officer. “It proves that doing what is right is also what is best for business, challenging us as health care providers to be both excellent caregivers and good stewards of the resources we have to care for patients.”
“Impact of Inpatient Harms on Hospital Finances and Patient Clinical Outcomes” builds on an earlier study by Adventist Health System, “Developing and Implementing a Standardized Process for Global Trigger Tool Applications across a Large Health System,” that explored the organization’s process for more accurately measuring the number, types, and severity levels of adverse events occurring across 24 of its hospitals.
By examining data from more than 21,000 inpatients across 24 hospitals from 2009 to 2012, researchers found that patient harm increased lengths of stay, mortality rates, and the probability of readmission. In addition, temporary harms resulted in a negative contribution margin of $669 and severe harms a negative contribution margin of $1,112 per patient. Adventist Health System was able to reduce severe patient harm by 67 percent in the course of three years, said Loran Hauck, MD, senior vice president and chief medical officer for AHS, and in doing so, lower associated costs. Based on these numbers, the study suggests that if every U. S. hospital could achieve the reduction in patient harms that Adventist Health System did, the annualized savings would be in the billions of dollars.
“Through a combination of leadership engagement, quality improvement programs, and enhanced identification, Adventist Health System was able to move significantly closer to the stringent quality and patient safety goals outlined in our Vision 2020,” Hauck said. “Our hope is that other hospitals will also benefit from the harm identification strategies and repeatable methodology for calculating the cost of harm detailed in these studies.”
“This landmark study demonstrates the powerful financial and clinical impact that health care providers can achieve through measuring their all-cause harm using a more automated trigger-based approach,” said senior author David Classen, MD, Pascal’s chief medical information officer. “This study shows that harm is costly to health care providers, and that when we know the true rates and patterns of harm in our organizations, we can genuinely begin to reduce adverse events and their demonstrated costs. What patient safety has thoroughly lacked is a business-case, and this study provides one.”
The full report is available by request and on the Journal of Patient Safety’s website (link).
About Adventist Health System
Adventist Health System is a faith-based health care organization headquartered in Altamonte Springs, Florida. A national leader in quality, safety and patient satisfaction, Adventist Health System’s nearly 73,000 employees maintain a tradition of whole-person health by caring for the physical, emotional and spiritual needs of every patient. With 45 hospital campuses and nearly 8,100 licensed beds in ten states, Adventist Health System facilities incorporate the latest technological advancements and clinical research to serve more than 4.5 million patients annually. The full continuum of integrated care also includes urgent care centers, home health and hospice agencies, and skilled nursing facilities. Each Adventist Health System facility operates independently in delivering care and services to best meet the needs of the local communities they serve. While each entity is unique, all remain united in one mission of Extending the Healing Ministry of Christ
About Pascal Metrics
Pascal Metrics is a leading provider of patient safety products and services for the healthcare industry. By combining clinical expertise, technology and the world’s largest database of safety events and behavior, Pascal has worked with more than 1,200 hospital partners to improve safety culture and reduce harm for millions of patients worldwide. All of Pascal’s data innovation is done through a Patient Safety Organization (PSO) and with a national collaborative of leading systems, creating a safe space for collaboration and best practice sharing. Pascal is a privately held, high-growth company headquartered in Washington, D.C. For more information, please visit pascalmetrics.com.
SOURCE Pascal Metrics; Adventist Health System
CONTACT: Christine Stewart, Adventist Health System, 407-357-2054, firstname.lastname@example.org; Jordan Jakubovitz, Pascal Metrics, 202-499-5195, email@example.com
 SOURCE James, John T. “A New, Evidence-Based Estimate of Patient Harms Associated with Hospital Care.” Journal of Patient Safety: September 2013 – Volume 9 – Issue 3 – pp. 122–128. doi: 10.1097/PTS.0b013e3182948a69. Available for free download online at http://journals.lww.com/journalpatientsafety/Fulltext/2013/09000/A_New,_Evidence_based_Estimate_of_Patient_Harms.2.aspx
 SOURCE: Leah Binder’s “Stunning News on Preventable Deaths In Hospitals,” Forbes, Sept. 23, 2013. Accessed online on Sept. 19, 2014 at http://www.forbes.com/sites/leahbinder/2013/09/23/stunning-news-on-preventable-deaths-in-hospitals/