This Just In

Medication Safety
Report: Most Medication Errors Do Not Harm Patients
More than 98 percent of medication errors don't harm patients, according to the United States Pharmacopeia's (USP) report on the 192,477 errors reported in 2002 to its voluntary MEDMARX database. Nearly half (49 percent) the errors reported by 405 hospitals and 77 outpatient centers are categorized as near-misses - wrong medications, doses or formulations that are spotted shortly before reaching the patient. Other findings:

• The most common errors are omission (25.6 percent), in which a correctly prescribed medication doesn't reach the patient, and wrong dosage or quantity (25.5 percent). Next is wrong prescription (18.5 percent).
• The types of errors most likely to cause patient harm are delivering the wrong medication, or delivering the right drug through the wrong administration method (such as inappropriately crushing tablets) or via the wrong route.
• Patients older than 65 comprised more than half the patients who died from medication errors and, overall, were twice as likely as younger patients to suffer harm from a medication error. On average, geriatric patients also require more complex drug regimens, which increase the possibility of a medication error.
• The drugs most commonly involved in harmful medication errors are morphine, insulin and heparin.

Inside The Numbers
Inside The Numbers

• 5,000 - Number of hospital surgical facilities
• 3,700 - Number of freestanding ASCs
• 8,600 - Number of medical clinics with surgery suites
• 18-23 - Number of working days per month (depending on holidays and weekends) this variance is why you should measure volume in cases per day
• 35%-50% - Percentage of gross revenue or billed charges you don't expect to collect (contractual allowance)
• 2% - Amount of bad debt in an efficiently run surgery center
• 18% - Percentage of net revenue you should spend on medical supplies
• $150-$175 - Ideal range of costs of medical supplies per case
• 45 - Maximum number of days billings should spend outstanding in accounts receivable
• 20%-30% - Operating margin in a well-run ASC: Subtract total expenses from total net revenue, then divide the difference by total net revenue

Source: SMG, FASA

Volume vs. Costs
Does Bigger Mean More Efficient? Not Always
Higher-volume ASCs have lower operating costs per case than lower-volume centers, says the Medical Group Management Association's (MGMA) survey of 113 multi-specialty and single-specialty (ophthalmology and gastroenterology) ASCs. Facilities that treat 5,000 or more cases per year have a median total cost per case of $658. The figure is $765 for facilities that do 3,000 to 4,999 cases yearly and $895 for those doing fewer than 1,999 cases. Other findings:

• Medical and surgical supplies account for a larger portion of higher-volume centers' expenses (20 percent of costs), while lower-volume ASCs spend 16.4 percent or less.
• Physician-owned ASCs have significantly fewer outstanding accounts receivable over 90 days (15.9 percent) than facilities owned fully or partly by outside entities (30 percent).
• Nearly half (48.9 percent) the responding ASCs opened 1998 or later.

Hospitals vs. Specialty Centers
Stopping the Competition - Before There Is Any
Though there are no ASCs or specialty hospitals set to open in Newton, Kan., the commissioners of this town of 17,000 passed an ordinance in July (by a 5-0 vote) that mandates local licensure of such facilities and enacts a one-year moratorium on the licenses. The commission will study whether ASCs and surgical hospitals would have a sufficiently negative impact on non-profit hospital revenues and staffing to affect vital community services. The ordinance came at the request of the town's lone community hospital, 66-bed Newton Medical Center (NMC).

NMC President and CEO Steven Kelly argued that "there is legitimate opportunity for such facilities to arise here," particularly a freestanding surgery center. The loss of outpatient surgical revenues, he says, "could reduce NMC's ability to provide healthcare to the most vulnerable in the community," including free prostate cancer screenings and the town's Meals on Wheels program.

Anita Buchanan, the hospital's director of human resources, says a competing facility would produce a nursing shortage and drive up wage expenditures.

No one presented an opposing view at the special commission session in which the commission passed the ordinance. Newton is about 20 miles from Wichita, which has specialty hospitals (30-bed Select Specialty Hospital and a heart hospital) and many single- and multi-specialty ASCs. The moratorium applies only to potential ASCs or specialty hospitals - not small clinics or office practices - opening in Newton. Lawrence, Kan., and five Oklahoma towns have imposed similar ordinances.

Hospital Inpatient/Outpatient Services
A New Hospital Safe Harbor?
The American Hospital Association petitioned HHS to create a safe harbor for community hospitals that discount or waive charges for treating uninsured patients. In a recent letter sent to HHS Secretary Tommy Thompson, AHA president Richard Davidson requested that hospitals be protected from payment challenges by the Office of Inspector General and that other regulatory barriers affecting programs geared toward treating uninsured patients be relaxed.

"The uninsured have nobody negotiating for them. We're working to fix the problem but we're going to need some help from the government," said Mr. Davidson.

The AHA also requested that OIG offer advisory opinions for hospitals to seek binding regulatory guidance on issues pertaining to programs for the uninsured. HHS is reviewing the proposal.

Recovery Surcharge
Price Gouging Or Containment?
To recoup high PACU costs, some facilities performing cosmetic surgeries are charging hourly if patients stay in recovery beyond a pre-determined time. Proponents say it helps control facility costs and does not gouge patients if the surcharge is applied on a dollar-for-dollar cost basis.

"Most just eat their losses, but they don't have to," says plastic surgeon Laurie Casas, MD, FACS, of Glenview, Ill.

The practice has critics. "Facelifts and more extensive liposuction typically require longer PACU stays. That's part of the overhead," says CRNA Brian Kilpatrick of Seattle. "Patients may recover differently from similar anesthesia regimens for identical procedures. What if the anesthesia provider in OR 1 managed the anesthetic properly, and the one in OR 2 overmedicated the patient, who takes longer to recover? Is that the [second] patient's fault?"