Medicare may stop paying for hospital errors in 2008, according to a May 22, 2007 article from IndyStar.com titled Hospital-borne ailments face Medicare budget ax.
According to the article:

Medical mistakes are deadly and expensive. Infections acquired in hospitals account for about 90,000 deaths and $4.5 billion in extra spending each year, according to the U.S. Centers for Disease Control and Prevention.

There are thirteen conditions acquired after the patient is admitted to the hospital that the federal Centers for Medicare and Medicaid Services (CMMS) is considering no longer paying hospitals for:

1. Catheter-associated urinary tract infections.
2. Bed sores.
3. Objects left in after surgery.
4. Air embolism, or bubbles, in bloodstream from injection.
5. Patients given incompatible blood type.
6. Bloodstream staph infection.
7. Ventilator-associated pneumonia.
8. Vascular-catheter-associated infection.
9. Clostridium difficile-associated disease (gastrointestinal infections).
10. Drug-resistant staph infection.
11. Surgical site infections.
12. Wrong surgery.
13. Falls.

Source: Medicare

Ouch. The customer (CMMS) is saying "we will no longer pay for defects and rework". How many of us have customers who still pay for our mistakes?

"There's not a doctor or nurse who comes to work in the morning and wants to make a mistake," said Carmela Coyle, the AHA's senior vice president of policy. "I don't see nonpayment as an incentive to try to do better."

While I have sympathy for anyone who faces sudden non-payment for work that was good enough just yesterday, reading Ms. Coyle's words reminds me of the immortal words of the jedi master Yoda: No. Do, or do not. There is no try.

What are hospitals and the well-intentioned professionals who work there to do? Hopefully they will turn to lean healthcare, responsible for successful and ongoing transformations at Virginia Mason Medical Center, Group Health Cooperative, Pittsburgh Regional Medical Center, ThedaCare, The Mayo Clinic and an increasing number of hospitals around the world.

Healthcare leaders can start with education in Lean healthcare fundamentals, then proceed to identifying and mapping the processes within their major service lines (value streams) to see the wasted resources and understand the potential for improvement. For quick wins, 5S can be applied to the healthcare workplace to improve safety, quality and productivity. Practical problem solving training will enable shorter cycles of improvement, where the work is actually done everyday (the gemba). These Lean principles can be applied simultaneously to healthcare administration processes, freeing up resources and improving information flow.

Next headline: U.S. Taxpayers to Stop Paying for Errors by Politicians and Public Servants ...if only.