Aligned Incentives and Transparency Are What Our Hospitals Need, That's Engineer's Order

Most people are shocked to learn that the third leading cause of death in the United States is medical errors in hospitals. The hospital industry has known that since 1999 when the Institute of Medicine published the report "To Err Is Human." Despite the significant reforms made by leading doctors and nurses, hospitals, and state and federal governments, medical errors continue to kill over 200,000 people a year in America.

While most hospitals have taken some measures to avoid preventable deaths, fewer than 100 out of the more than 5,000 hospitals in the United States have taken all of the measures needed to prevent human errors from becoming fatal. Yes, to err is human. In fact, one expert told me we each make five errors a day, but these errors don't have to cause patients death or harm. That's because there are evidence-based practices, some 20 years old, that would mitigate human errors if implemented and prevent unnecessary patient fatalities.

When I founded the Patient Safety Movement Foundation in 2012, my top goal was to eliminate preventable deaths. One of my first actions was to document and freely disseminate those evidence-based practices, or Actionable Patient Safety Solutions (APSS) as they are formally known. Over the past decade, we have created APSS for nearly every cause of preventable medical death, and yet most hospitals have not implemented them. The roughly 100 hospitals that have implemented these practices have all achieved incredible results. One of those hospitals, the Children's Hospital of Orange County (CHOC), where I chair their Quality Committee, has actually achieved zero preventable deaths for nearly 50 months now. The actions taken there should become the model for the country and should be mandated by law.

There are many reasons why all hospitals have not done what CHOC did. But we can do two things to get them to make these changes: provide positive, aligned incentives for hospitals with zero preventable deaths and require the hospitals with preventable harms to publicly disclose that information on their websites in an easy to find location.

Imagine taking your car in for a brake repair and then learning the shop accidentally set your car on fire and—here is the real shocker—they still want you to pay for the brake service they performed on your car? This is what happens in our hospitals. By the way, to continue with the analogy, hospitals actually used to get paid for the work they did to try to put out the fire as well!

Quite simply, hospitals should not get paid if they accidentally kill a patient when they did not have the APSS in place to prevent the accident. If they had the APSS in place and the accident still occurred, then they would be paid. Aligning incentives in this way will empower clinicians to implement all of the APSS and truly do everything in their power to look out for each patient's well-being. I'm not saying that our caregivers should be penalized for not winning every battle, or for making errors. I'm just asking for them to use every play in the book to prevent medical errors.

Now, here's my case for transparency. Can you imagine if public companies didn't report their financials every quarter to the public? Guess what... hospitals don't. Hospitals are public institutions. In fact, unlike public companies, most get half of their revenues from federal and state insurers, like Medicare and Medicaid. So, why do we think it is a good idea to have transparency for public investors but not for public patients? What's more important, our money or our lives? It's a simple concept: What is measured improves; what is measured publicly improves faster.

You may ask why we don't have aligned incentives and transparency in medical care already. I testified about patient safety in front of the Senate Committee on Health, Education, Labor and Pensions in 2013 and recommended these ideas then. The good senators thought what I said made sense and tried to introduce bills to implement these reforms, but hospital associations, and to my surprise, even one medical association and a very large company pushed back and ultimately quashed the legislation. Hospitals are the biggest employers in every community, from a rural town in Ohio to New York City. And it's understandable that most, if not everyone, is afraid of change. However, we need to put our fears aside and let the lawmakers do this.

There's no real reason to push back. In fact, if hospitals instituted proper aligned incentives and transparency, they will save money. One study showed that implementing patient safety reforms could reduce the cost of our entire our health care system by 20 percent to 45 percent.

While we don't have the cure for cancer and heart failure, which are the first and second cause of deaths in the U.S., we do have the cure for the third leading cause of death, and it doesn't require new research or FDA approval. Let's do everything we can so we don't continue to lose 200,000 people annually to medical errors in the U.S. The next person could be you or your loved ones.

Joe Kiani crop
Joe Kiani, CEO and founder of Masimo Masimo