Texas study finds that hospitals can profit from surgical errors

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Legally reviewed by:
Steven R. Davis and John A. Davis, Jr.
August 4, 2023

As if it were not frustrating enough when hospitals make mistakes that should have been prevented, it now turns out that they may even be making more money due to those mistakes. A recent study published by The Journal of the American Medical Association found that some Texas hospitals generate higher profit margins from those patients who suffer from preventable complications such as surgical errors.
To put it another way, these hospitals appear to be rewarded for their mistakes. The study included over 34,000 surgery patients from 2010 that were treated by hospitals owned by Texas Health Resources. One THR physician and co-author of the study was surprised at just how much more money was made due to patient complications. The physician believes the phenomenon is not isolated to THR, but rather a national issue.
In response to the study, a healthcare expert said the findings were troublesome, but not surprising. He feels that the fault should be placed on a faulty payment system that hospitals have long enjoyed. Instead of being rewarded for quality of services, hospitals are instead compensated based on their volume of services.
The study also found that 5.3 percent of surgery patients at the hospitals experienced at least one of 10 different preventable errors, such as infection, pneumonia, strokes and heart attacks. Ultimately, the hospitals made more than three times more profit on these patients than those who did not experience complications.
It seems only fair that if these hospitals are making more money for their mistakes, they should also be paying for them. If the patients received treatment that was below the reasonable standard of care, and as a result the patients were injured, they may be entitled to compensation from both the physician and the hospital. Such compensation would come from a medical malpractice lawsuit filed against the negligent doctor and its employer, the hospital.
Source: The Dallas Morning News, “Texas Health Resources surgery study shows hospitals can profit from their own mistakes,” Gary Jacobson, April 16, 2013

John A. Davis, Jr.


John A. Davis, Jr. and Steven R. Davis

August 4 2023

Steven R. Davis and John A. Davis, Jr. are experienced attorneys at Davis & Davis, a law firm that specializes in medical malpractice cases in Texas. With a deep commitment to justice that guides their ethical approach, Davis and Davis have dedicated their careers to helping victims of medical negligence. They and their team continue to advocate for clients, despite the challenges posed by Texas's cap on recoverable damages in malpractice lawsuits. Davis & Davis pride themselves on their extensive experience in the field and their readiness to meet clients across the United States.

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