Health Policy Paper



Health Policy Paper

Introduction

It is widely accepted that public policies often fail. Various explanations have been put forward, involving numerous practical and political obstacles intrinsic to their conception and implementation. Economists generally ascribe policy failures to the absence of those incentive structures that should induce individuals to pursue their consistent and stable preferences (Friedman, 1982). This paper contributes to the limited literature pertaining to the perceptions and effects of the 2008 CMS policy.

Discussion

In U.S. hospitals, roughly 1.7 to 2 million health care-associated infections (HAIs) occur annually, resulting in approximately 99,000 deaths and an estimated cost of $17 to $29 billion (Dimick et al., 2001). Because of HAIs' significant health and economic burdens, their prevention has been identified as a major patient safety and public health issue. This has led accrediting agencies, payers, state legislatures, and quality improvement organizations to focus substantial effort on reducing HAIs through increased emphasis on measurement and reporting efforts.

Following this trend, in late 2008 the Centers for Medicare & Medicaid Services (CMS) adjusted its payment policy regarding HAIs. Under the 2008 CMS policy, hospitals no longer receive payment for certain clinical complications deemed preventable. Specifically, the policy denies additional payment for central line associated bloodstream infections (CLABSIs), catheter-associated urinary tract infections (CAUTIs), and certain surgical site infections (SSIs) such as mediastinitis after coronary artery bypass graft procedures, if these are documented during the hospital stay and were not present on admission. While the policy's intention is clear—to align incentives by preventing hospitals from receiving higher reimbursement for potentially preventable complications—concerns were raised both prior and subsequent to its implementation regarding its possible unintended consequences. That is, as the CMS policy affects myriad hospitals, it may exert influence more broadly than its original intent, because the 2008 CMS policy concentrates on only a specific set of ...