JAMA Study Highlights Health Care's Perverse Incentives

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A paper published in the Journal of the American Medical Association is likely to fuel the movement towards value-based purchasing in health care. A study of 34,000 surgeries performed at Dallas-based hospital network Texas Health reveals that surgeries with complications generate twice the revenue of surgeries without complications, according to an article in the Wall Street Journal.

The researchers, including Boston physician and New Yorker contributor Atul Gawande, MD, worked with Boston Consulting Group and Texas Health Resources calculated the average compensation for a surgery with complication at $15,700 versus the average without ($7,600).

“The conundrum tells us that payment reform has to be central to health-care reform,” Mark Lester, a senior quality executive at Texas health and one of the authors told the Wall Street Journal.

Gawande told the newspaper that the failure to adopt checklists proven to reduce complications prompted the study. “We wondered whether finances were playing a part in it,” he was quoted as saying.