Why should costs of Never Events be shifted to private insurance premiums?

Let’s look at non- payment for “Never Events”. The IOM report, “To Err Is Human”, stated as many as 98,000 die annually as a result of medical errors. These errors not only result in unfortunate health consequences but also direct and indirect costs borne by society as a whole. A medical error is the failure of a planned action to be completed as intended or use of the wrong plan to achieve an aim. Not all adverse events are the result of medical error, but adverse events that are the result of error are classified as preventable. Authors of the IOM study estimated the national costs of adverse events to be $37.6 billion and of preventable adverse events to be $17 billion. For instance, 4% of national health expenditures were associated with adverse events.

Reporting adverse events can serve two important functions: providers can be held accountable to performance, but more importantly, adverse events can provide information that leads to improved safety. I have always thought there is little incentive for a hospital to tackle adverse events since there are no financial consequences other than litigation. In fact, medical errors actually can make a routine surgery (as my husbands laparoscopic gallbladder) into a series of surgeries and income to a hospital. My husband’s insurance company actually tried to recover more than they contractually had to pay out.

In the Union Leader Article “It Should Never Happen”, Steve Norton, Executive Director of the NH Center for Public Policy, said the consumer is likely to see hikes in health-insurance premiums. He said, “ There is no reason why the cost of these never event services wouldn’t be shifted onto private insurance premiums.” I do not understand this statement. Why should private insurance premiums go up? I can understand maybe the uninsured would suffer from this but why private insurers such as BCBS since the insurer would be saving money. Here lies the problem. Is it true that hospitals will shift these costs onto the consumer without consequence to themselves? This was not the intent of mandatory reporting. Mandatory reporting with analysis of where things went wrong was supposed to decrease these events with huge health care savings to the consumer. I fail to see how this makes hospitals accountable for change if there are no consequences. Maybe the events should be shifted from the outrageous salaries of hospital CEOs making upwards of 700,000. It seems to me this feeble attempt not to pay will not affect hospital receivables at all. Poor quality health care costs a lot of money and we are all paying for it.