Acknowledging Medical Mistakes & Embarrassing Charges

by Richard Bukata, MD @emabstracts

Richard Bukata, MD

I’d like to address two topics this month — dealing with the acknowledgment of a medical mistake and another embarrassing example of how hospital charges make the whole medical system appear terribly broken.

First, acknowledging error. I personally have a tough time with the concept of acknowledging mistakes in the healthcare setting. I know it is the right thing to do and it is only reasonable that when errors occur we should own up to them. We all would want this if we or a family member was subjected to a medical mistake that resulted in harm (I can’t get excited by near misses and errors that result in no harm).

But for my entire professional career as a contracted emergency medicine provider I’ve been told by my insurance companies (and I’ve had many over the years) and lawyers to keep quiet when a mistake occurs. Talk to no one except your spouse. Anyone you talk to other than the insurance company and your lawyer can be deposed and their testimony used against you if it supports your guilt.

Now it is entirely different for physicians who are employees of a hospital. The physicians and hospital are covered under the same policy and if the hospital chooses to disclose errors (actually, as mandated by the Joint Commission), then, no problem. Except for the grief of being sued with all of the depositions and angst, it is not your call.

But for independent contractors it is a different story. To my knowledge, there is no mandate that you report errors (maybe the hospital expects you to report them), and your insurance company has no interest in you spilling your guts to some patient or their family about a mistake you made. The brutal fact is that the insurance company’s job is not to compensate injured patients if it can avoid it. Its job is to protect the assets of its investors and through “artful lawyering” get you off.

So how can the hospital’s “full disclosure” policy and the mandate of the contracted physician’s insurance company to keep quiet coexist? Seems that there is a website for just about everything and apology laws are no exception. See — they note that 36 states have apology laws. It is important to check if your state has one and also exactly what it covers. Most simply cover expressions of empathy or sympathy while a few go further and protect admission of fault. But be real careful. A California physician expressed empathy and admitted fault. The problem? His admission was used against him in court since California law does not cover admission of fault. But when there is a mistake and everybody knows it, how can a conversation be held in which you express empathy and simply stop the conversation there without going on to the logical next step of admitting that a mistake occurred when it is obvious to all. The surgeon takes off the wrong leg — “I’m sorry” just won’t cut it.

There are some “success” stories in which hospitals not only offer apologies when mistakes are made but also offer some sort of monetary compensation. Perhaps the first publication of this nature was one in which a specific VA hospital developed a disclosure and compensation program. The study found that although the specific VA facility was in the top quartile for the number of claims (of 35 VA hospitals), it was in the bottom quartile for payments (Kraman, S.S, et al, Ann Intern Med, December 21, 1999). But remember this was a VA facility — it is very hard to sue the government and all the physicians in those facilities work for the government. How this converts to the civilian setting is another matter.

A study from the University of Michigan comparing outcomes before and after initiation of an active surveillance, full disclosure and compensation offer program noted a reduction in paid claims per year (from 53 to 32), claims resulting in a lawsuit (from 39 to 17 per year), the monthly rate of new claims (from 7.03 to 4.52 per 100,000 patient encounters) and the average monthly rate of lawsuits (from 2.13 to 0.75 per 100,000 patient encounters), the median time to claim resolution (from 1.4 to 0.9 years), median and mean total liability costs, and the average cost per lawsuit (from $405,921 to $228,308). There was a decrease in total costs associated with lawsuits after full implementation of the program, but not in total costs for non-lawsuit claims (Kachalia, A., et al, Ann Intern Med, August 17, 2010). Both of these studies are in The Abstracts database.

In the January, 2014, issue of Health Affairs there are five papers concerning communication about errors. One paper focused on interviews with heads of programs that were early adopters of what are being called “communication and resolution” programs (CRPs) much like the University of Michigan program reported in the above study. Interviews with representatives from three private insurance companies that are now involved with CRPs are also included. Although the scope of the paper is beyond this essay, those interested in this topic are invited to check out this resource.

But in the meantime, it seems that physicians who are involved with incidents that may result in litigation are well served to contact their carrier if an independent contractor (or the indicated representative of the group for whom the contractor works) or the hospital’s risk management office if an employee of a hospital before any discussion of the incident occurs. And be aware of the apology law in your state — if there is one.

Next topic — hospital bills. I’ve written about this topic ad nauseum in the past and perhaps the greatest recent article on the topic was written by Steven Brill in Time magazine entitled, Bitter Pill: Why Medical Bills are Killing Us. It was in the March 4th, 2013 issue. It was the longest single article ever in the history of the magazine at 36 pages. Reading the original article is well worth the time and effort. It is truly a compelling piece. See

So today’s example is just one of many. Why it made the news is simply because of its egregiousness — but lots of outrageous bills are presented to patients all the time. Most people just suffer in silence — or don’t care (and, from a personal perspective, having Medicare is absolutely great — it is irrelevant what hospital charges are). In any case, as reported by the Charlotte Observer, on January 28, 2014, Eric Ferguson, 54, of Mooresville, N.C., felt what he believed to be a bee sting while taking out the trash one evening. When he looked down at his foot, he saw fang marks. The culprit was apparently not seen so the type of snake was unknown although, statistically, it was likely to be of the pit viper family. He drove himself to his local hospital, Lake Norman Regional Medical Center, where he was given four vials of antivenom and discharged after an 18-hour stay. Who knows if he really needed the antivenom?

When Ferguson saw his $89,227 bill, after recovering from the “sticker shock,” he notified the Charlotte Observer figuring the whole world, or at least greater Charlotte, ought know about his outrageous bill. Turns out, each of the four vials of antivenom was billed out at a little more than $20,000. An internet search by Ferguson found retail prices for the medicine ranging between $750 and $12,000. Obviously, given this spread these numbers are pretty meaningless. In actuality, the approximate wholesale charge for CroFab is about $2,000 as best as I could determine on the ‘net. The article indicated that Medicare typically reimburses about 6% over hospital costs for medicine and that Medicare would have paid $2,365 per vial or $9,460 for all four vials.

The patient’s Blue Cross and Blue Shield of North Carolina’s contractual agreement with the hospital reduced the bill to $20,227 of which the patient paid about $5,400 to cover deductibles and copays (high deductibles and copays will become progressively more common with the Accountable Care Act).

The patient had absolutely no gripes about the quality of care, calling it “beyond phenomenal,” but was angered at the audacity of the hospital in presenting such a bill under the pretense that it was fair and equitable. As is customary in these cases of outrageous bills, the patient and his spouse wondered what would have been the fate of a person without insurance. As it turned out, the hospital ultimately collected about twice what Medicare would have paid.

Here’s what the newspaper said the hospital’s response was when asked about the bill.

“… Hospitals only collect a small percentage of our charges, or ‘list prices.’ We are required to give Medicare one level of discount from list price, Medicaid another, and private insurers negotiate for still others. … If we did not start with the list prices we have, we would not end up with enough revenue to remain in operation. … Our costs for providing uncompensated care are partially covered by higher bills for other patients.”
“In some cases, Lake Norman Regional’s charge is considerably higher than other local hospitals.”

And we all know that the response is largely true — and it reflects this nutty business of robbing from the rich to pay for the poor and having extraordinarily high charges that will be subject to sharp discounts — but the idea of percentage discounts just drives the list prices higher and higher.

The hospital acknowledged offering discounts of 62–65% for uninsured patients. With a 65% discount the bill for a “cash” patient would have been only $31,229 (a relative bargain??). But the bill negotiated by Blue Cross was still $11,002 lower than what an uninsured patient would have been expected to pay.

Many years ago a law firm in California was hugely successful in suing hospitals (and ultimately a large emergency medical group) for charging uninsured patients fees that were higher than any insurance company would have paid. All of the hospital chains and physician groups that were sued either lost their suits or they settled. Cash patients who paid the inflated fees were given refunds to the tune of hundreds of millions of dollars when their charges were adjusted to what group insurance companies would have paid.

And, interestingly enough, it turns out that Lake Norman Regional, a private for-profit hospital, has also been in the news for a potentially much more serious issue. Two of its former emergency physicians have alleged that Lake Norman and Davis Regional Medical Center committed fraud by offering kickbacks to doctors who would order unnecessary tests and admit more patients to increase corporate revenues. Both hospitals are owned by Health Management Associates (HMA), one of the largest for-profit chains. Other doctors in other states at HMA hospitals have made similar claims.

A story dated January 3, 2014 by Karen Garloch in the Charlotte Observer details the whistleblower suit against the hospitals and HMA by Drs. Thomas Mason and Steven Folstad of Mid-Atlantic Emergency Medical Associates. The U.S. Department of Justice has joined the suit, along with seven others against HMA in other states. The hospitals and HMA deny the allegations. At stake are millions of dollars billed to Medicare and Medicaid, with the potential for fines of triple damages and $11,000 per claim if the physicians and the Justice Department prevail. The suit was the subject in a segment on “60 Minutes” in 2012.

Within about 30 hours of the snake bite story being posted on Yahoo News there were over 10,498 comments (. It was even covered in the United Kingdom, where our “system” of healthcare that often requires individuals to file for bankruptcy when they are unable to pay their hospital bills, is totally unknown. The most casual review of the comments details story after sad story of people dealing with the burden of paying medical bills.

And we often think that when these bills are turned over to collection agencies that, after a severe dunning, they gradually fade away. No sir. If the numbers are worth the effort they will sue for what is owed.

The whole point — the process by which patients are billed for care in the U.S. is unfair and unreasonable and patients are blind-sided routinely with charges that have no relationship to reality. This severely discredits our system despite the fact that patients often have a very positive view of the actual care that was provided. And, unfortunately, there is nothing on the horizon that will change the current embarrassing system.

W. Richard Bukata, MD
Medical Editor