Public hospital admissions for treating complications of clinical care: incidence, costs and funding strategy.

Objective: To quantify the frequency of, and the costs and payments associated with, admissions for treatment of injuries and illnesses that are consequences of care.

Data Sources: Routinely-coded 2005/06 public hospital inpatient data from Victoria, Australia (1.25 million admissions) and corresponding patient-level cost data (1.04 million admissions). Payments reflected DRG-based prospective rates.

Study Design: Retrospective analysis of admissions with principal diagnoses that specify adverse events arising as a direct consequence of healthcare.

Results: 1.5% (15,336) of the costed admissions specifically treat an injury or illness arising from medical or surgical care, consuming 2.74% of hospital prospective payments and representing $89.3 m (2.84%) of total reported costs. 1.4% (17,429) of all public hospital admissions and 2.82% of hospital prospective payments (estimated cost-$101.5 m per year) are committed to treating complications of care. Private residences or aged care facilities are the source of 84.9% (14,804) of these admissions. Inpatient death was the outcome in 0.7% (118) of these admissions.

Implications: Admissions for treating complications of care represent a small, relatively expensive, proportion of hospital admissions, which account for disproportionate levels of hospital costs and funding. A policy option providing incentives to reduce the incidence and costs of complications arising from care includes allocating all costs arising from transferred (re)admissions back to the original episode of care and developing a suite of specific DRGs to fund admissions for treatment of complications.