Press Release

Embargoed Until Contact

October 17, 2012

Sue Ducat
Director of Communications
(301) 841-9962


From Health Affairs


Mixed Financial Incentives For Hospitals To Reduce Surgical Complications’ Frequency


Bethesda, MD -- Surgical complications are something that neither patients nor hospitals want. With low complication rates being increasingly recognized as an important measure of good hospital performance, initiatives to lower complication rates are being pursued with the expectation of helping patients and reducing payers’ reimbursement expenses as well as providers’ costs.


A new study being released today as a Web First by Health Affairs, reexamines the business case for hospitals’ embracing surgical complication programs. Using data on costs and reimbursements compiled by researchers at the University of Michigan and adjusting them to 2010 dollars, the study finds that a hospital would suffer a negative cash flow if its surgical inpatient load is not growing. For a hospital performing 10,000 inpatient surgeries per year, annual cash flow could drop by more than $1 million for each 1 percent drop in the complication rate.


The Impact On Hospitals Of Reducing Surgical Complications Suggests Many Will Need Shared Savings Program With Payers

By Dan C. Krupka, Warren S. Sandberg, and William B. Weeks

Krupka is with Twin Peaks Group in Lexington, Massachusetts; Sandberg is affiliated with Vanderbilt University School of Medicine in Nashville, Tennessee; and Weeks is with the Geisel School of Medicine at Dartmouth College in Hanover, New Hampshire. The study will also appear in the journal’s November issue.


Because reducing complications creates bed capacity, hospitals growing fast enough to fill the “empty” beds could experience cash flow growth comparable in magnitude to the loss suffered if they were not growing. The authors conclude by recommending that “hospitals with limited growth prospects that are nonetheless contemplating a surgical complication reduction program establish agreements with payers to share in any savings generated by the program.”

About Health Affairs

Health Affairs is the leading journal at the intersection of health, health care, and policy. Published by Project HOPE, the peer-reviewed journal appears each month in print, with additional Web First papers published periodically and health policy briefs published twice monthly at You can also find the journal on Facebook and Twitter. Read daily perspectives on Health Affairs Blog. Download weekly Narrative Matters podcasts on iTunes.

The full text of each Health Affairs Web First paper is available free of charge to all Web-site visitors for a two-week period following posting, after which it switches to pay-per-view for nonsubscribers. Web First papers are supported in part by a grant from The Commonwealth Fund.