(Story updated with commentary April 17, 2013 at 1:02 p.m. ET)
Hospitals earn higher profit margins when their patients experience surgical complications, according to a study in the Journal of the American Medical Association .
The authors claim the study is the first to quantify how complications impact a hospital's bottom line and illustrate the challenge of pushing hospitals to improve outcomes when the current system still rewards more care over better care.
After looking at more than 34,000 inpatient surgical procedures, Dr. Sunil Eappen of Harvard Medical School and his co-authors found that profit margins were 330% higher when privately insured patients suffered at least one complication. Among Medicare patients, profit margins were 190% higher.
The patients were treated at a 12-hospital, not-for-profit system in the southern U.S. during 2010. A total of 1,820 patients, or 5.3%, suffered at least one surgical complication.
The average revenue for treating these patients was $49,400 compared with $18,900 for patients who did not face any adverse outcomes. The study accounted for a hospital's fixed and variable costs in providing care.