Department of Health and Human Services

OFFICE OF 

INSPECTOR GENERAL 

 

Daniel R. Levinson 

Inspector General 

December 2008 

OEI-06-07-00470 

 

ADVERSE EVENTS IN HOSPITALS: 

OVERVIEW OF KEY ISSUES 
Office of Inspector General 

http://oig.hhs.gov 

The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as 

amended, is to protect the integrity of the Department of Health and Human Services 

(HHS) programs, as well as the health and welfare of beneficiaries served by those 

programs. This statutory mission is carried out through a nationwide network of audits, 

investigations, and inspections conducted by the following operating components: 

Office of Audit Services 

The Office of Audit Services (OAS) provides auditing services for HHS, either by conducting 

audits with its own audit resources or by overseeing audit work done by others. Audits 

examine the performance of HHS programs and/or its grantees and contractors in carrying 

out their respective responsibilities and are intended to provide independent assessments of 

HHS programs and operations. These assessments help reduce waste, abuse, and 

mismanagement and promote economy and efficiency throughout HHS. 

Office of Evaluation and Inspections 

The Office of Evaluation and Inspections (OEI) conducts national evaluations to provide 

HHS, Congress, and the public with timely, useful, and reliable information on significant 

issues. These evaluations focus on preventing fraud, waste, or abuse and promoting 

economy, efficiency, and effectiveness of departmental programs. To promote impact, OEI 

reports also present practical recommendations for improving program operations. 

Office of Investigations 

The Office of Investigations (OI) conducts criminal, civil, and administrative investigations 

of fraud and misconduct related to HHS programs, operations, and beneficiaries. With 

investigators working in all 50 States and the District of Columbia, OI utilizes its resources 

by actively coordinating with the Department of Justice and other Federal, State, and local 

law enforcement authorities. The investigative efforts of OI often lead to criminal 

convictions, administrative sanctions, and/or civil monetary penalties. 

Office of Counsel to the Inspector General 

The Office of Counsel to the Inspector General (OCIG) provides general legal services to 

OIG, rendering advice and opinions on HHS programs and operations and providing all 

legal support for OIG’s internal operations. OCIG represents OIG in all civil and 

administrative fraud and abuse cases involving HHS programs, including False Claims Act, 

program exclusion, and civil monetary penalty cases. In connection with these cases, OCIG 

also negotiates and monitors corporate integrity agreements. OCIG renders advisory 

opinions, issues compliance program guidance, publishes fraud alerts, and provides other 

guidance to the health care industry concerning the anti-kickback statute and other OIG 

enforcement authorities. 
 

 

Δ EXECUTIVE SUMMARY 

OBJECTIVE

To provide a descriptive analysis of the key issues regarding adverse 

events in hospitals. 

BACKGROUND 

The term “adverse event” describes any harm to a patient as a result of 

medical care, such as infection because of contaminated equipment. 

The Tax Relief and Health Care Act of 2006 (the Act) mandates that the 

Office of Inspector General (OIG) report to Congress regarding the 

incidence of “never events” among Medicare beneficiaries, payment by 

Medicare or beneficiaries for services furnished in connection with such 

events, and the processes that the Centers for Medicare & Medicaid 

Services (CMS) uses to identify events and deny payment. Never events 

are a specific list of serious events, such as surgery on the wrong 

patient, that the National Quality Forum deemed “should never occur in 

a health care setting.” Expanding beyond this specific list, this and 

subsequent OIG reports use the broader term “adverse event” to provide 

for a more comprehensive examination of key issues. This report is one 

in a series to fulfill the requirements in the Act and inform 

decisionmakers. OIG work in this area will continue through 2009. 

To facilitate OIG efforts to comply with the mandate, we first sought to 

identify key issues regarding adverse events in hospitals to provide 

direction and context for our work. This overview report combines 

evidence, analysis, and opinion from a wide range of sources. These 

sources, which we refer to collectively as “stakeholders,” represent 

diverse entities involved in addressing adverse events in hospitals, 

including government agencies and other policymakers, professional 

associations, oversight organizations, patient safety groups, providers, 

and researchers. 

KEY ISSUES 

We identified the following seven issues as most critical to 

understanding the landscape of adverse events in hospitals: 

Issue 1: Estimates of the incidence of adverse events in 

hospitals vary widely and measurement is difficult. Research 

estimates of the frequency of adverse events in hospitals vary from 

3 percent to 20 percent of hospital admissions, in part because there 

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EXECUTIVE SUMMARY 

is no optimal method for measuring incidence. Research also 

indicates that elderly patients are particularly vulnerable. 

Issue 2: Nonpayment policies for adverse events are gaining in 

prominence and are viewed as a powerful incentive to reduce 

incidence but raise potential drawbacks. CMS’s new policy will deny 

hospitals higher payment for admissions complicated by selected 

adverse events, and private health care payers are adopting similar 

policies. Stakeholders generally believe that nonpayment provides an 

incentive to prevent costly adverse events. Potential drawbacks of 

nonpayment raised by stakeholders include limited access to care, 

increased hospital costs, and reduced hospital revenue. 

Issue 3: Hospitals rely on staff and managers to report adverse 

events internally, but barriers can inhibit reporting. Reporting 

events and suspected causes can help hospitals improve practices to 

prevent adverse events and ensure accountability for poor care. 

Hospitals also use reported information to inform affected patients and 

families, which is thought to boost public trust, and to improve clinical 

decisionmaking and compliance in treatment. However, hospital staff 

may not report events because they do not believe that reports will lead 

to improvement, do not have time, or fear punitive action. 

Issue 4: Hospitals report adverse events to various oversight 

entities, although stakeholders suspect substantial 

underreporting. Although there is no comprehensive national 

reporting system for adverse events, a number of Federal, State, and 

nongovernmental entities receive adverse event reports from hospitals. 

Hospitals are believed to underreport adverse events, although it is 

difficult to know to what extent. However, stakeholders indicated that 

reporting every adverse event is not necessary to achieve the aim of 

improving practices to prevent adverse events. 

Issue 5: Public disclosure of adverse events can benefit patients 

but also raises legal concerns for patients and providers. Access to 

adverse event information provides public scrutiny that may pressure 

hospitals to improve practices. However, concerns that hospitals, 

clinicians, and patients can lose legal protections when adverse event 

information is reported can inhibit full disclosure of adverse events. 

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EXECUTIVE SUMMARY 

Issue 6: Information to help prevent adverse events is widely 

available, but some hospitals and clinicians may be slow to adopt 

or routinely apply recommended practices. Hospitals and clinicians 

are sometimes slow to adopt recommended practices, such as 

evidence-based clinical practice guidelines, which outline systematically 

developed procedures to improve care. Literature indicates that 

hospital staff and clinicians may believe that the guidelines are not 

relevant to their setting or that they value individual practitioner 

judgment more than regimented standards of care. 

Issue 7: Interviews and literature reveal strategies that may 

accelerate progress in reducing the incidence of adverse events in 

hospitals. Strategies included the following: 

• assessing the desirability and feasibility of a national body to lead 

patient safety efforts, which would help to coordinate, but not 

replace, current efforts by government agencies and private entities; 

• focusing on hospital use of recommended practices and 

evidence-based guidelines to reduce the incidence of adverse events, 

including measuring hospital use; 

• establishing methods for measuring the incidence of adverse events, 

including tools for practical and accurate data collection; 

• expanding the use of electronic health records within and between 

hospitals, thus improving communication and continuity of care to 

potentially reduce the incidence of adverse events; 

• monitoring the impact of policies to deny hospitals higher payment 

for admissions complicated by selected adverse events; and 

• improving the utility of adverse event reporting, including 

evaluating the comparability of data reported across entities and 

streamlining reporting mechanisms to reduce burden on hospitals. 

SUMMARY 

The extensive range of entities involved in researching and addressing 

adverse events shows that reducing the incidence of adverse events is a 

high priority. Stakeholders described the current environment among 

hospitals and policymakers as being on the threshold of accelerated 

progress. They point to a large body of research as improving 

understanding, including recognition of the critical role of hospital 

systems in guarding against adverse events. Additionally, new policies, 

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EXECUTIVE SUMMARY 

such as denying hospitals higher payment for admissions complicated 

by certain adverse events and public disclosure of events, strengthen 

hospital incentives to develop safer practices. These advancements in 

clinical understanding, combined with heightened controls, hold 

promise for reducing the incidence of adverse events in hospitals and 

improving the quality of care. 

AGENCY COMMENTS 

We received comments on a draft of this report from the Agency for 

Healthcare Research and Quality (AHRQ) and CMS. 

AHRQ concurred with the report’s findings. 

CMS commended OIG on succinctly capturing the numerous issues 

surrounding this complex topic, acknowledged technical assistance 

provided to OIG in conducting this study, and indicated that it 

welcomed continued work with OIG on this issue. 

CMS reiterated its policies to encourage the prevention of adverse 

events that are enumerated in the report, particularly the nonpayment 

provision for hospital-acquired conditions, noting that OIG’s work is 

supportive of and will enable more effective CMS implementation of the 

provision. CMS agreed that nonpayment for care associated with 

adverse events strengthens hospitals’ incentives to develop safety 

practices and reduces health care costs in the long term. CMS also 

addressed the three potential drawbacks of nonpayment policies raised 

by stakeholders, providing further discussion to indicate that it believes 

these drawbacks are unlikely to occur. 
 

 

Δ TABLE OF CONTENTS 

EXECUTIVE SUMMARY .....................................i

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 

KEY ISSUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 

 Issue 1: Estimates of adverse event incidence vary widely . . . . . 11 

 Issue 2: Nonpayment policies are gaining prominence. . . . . . . . . 16 

 Issue 3: Hospitals rely on staff to report adverse events . . . . . . . 19 

 Issue 4: Hospitals report adverse events to oversight entities . . . 22 

 Issue 5: Public disclosure has benefits but raises concerns . . . . . 26 

 Issue 6: Hospitals may be slow to apply practices . . . . . . . . . . . . 28 

 Issue 7: Interviews and literature reveal strategies. . . . . . . . . . . 32 

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 

AGENCY COMMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 

APPENDIXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 

 A: Tax Relief and Health Care Act of 2006 . . . . . . . . . . . . . . . . . . 36 

 B: Glossary of Selected Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 

C: National Quality Forum Serious Reportable Events . . . . . . . . 39 

 D. List of Stakeholders Interviewed . . . . . . . . . . . . . . . . . . . . . . . 40 

E: Examples of Data Analysis: Stakeholder Interviews and 

Literature Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 

 F: Examples of Research: Incidence of Adverse Events. . . . . . . . 44 

 G: Agency Comments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 

ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
 

 

Δ INTRODUCTION 

OBJECTIVE 

To provide a descriptive analysis of the key issues regarding adverse 

events in hospitals. 

BACKGROUND 

Statutory Mandate and Office of Inspector General Response 

The Tax Relief and Health Care Act of 2006 (the Act) requires that the 

Office of Inspector General (OIG) study events that cause harm to 

Medicare beneficiaries. The Act specifically mandates that OIG study 

the incidence of “never events” among Medicare beneficiaries, payment 

by Medicare or beneficiaries for services furnished in connection with 

such events, and administrative processes of the Centers for Medicare & 

Medicaid Services (CMS) to identify events and deny or recoup 

payment. OIG is also to report to Congress on the study conducted, 

including recommendations for such legislation and administrative 

action as OIG determines appropriate. (For relevant text of the Act, see 

Appendix A.) 

A variety of terms, lists, and definitions are used to identify and address 

harmful health care events. (For a glossary of selected terms, see 

Appendix B.) The term “never event” is used to describe a specific list of 

serious events that the National Quality Forum (NQF) determined 

“should never occur in a health care setting” and are associated 

primarily with patient death or serious disability.1 NQF currently uses 

the term “serious reportable events” to describe this list. (For a list of 

NQF serious reportable events, see Appendix C.) Expanding beyond the 

specific events defined by NQF, this and subsequent OIG reports use 

the broader and more common term “adverse event” to provide for a 

more comprehensive examination of key issues. 

Following a review of Medicare policies and expenditures, as well as 

consultation with CMS and the Agency for Healthcare Research and 

Quality (AHRQ), we chose to focus much of our work on the hospital 

setting. Costs for inpatient hospital care constitute the largest portion 

1 NQF is a not-for-profit membership organization created to develop and implement a 

national strategy for health care quality measurement and reporting. The list is available 

online at http://www.qualityforum.org/about. Accessed on October 21, 2008. 

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INTRODUCTION 

of Medicare expenditures (29.6 percent in 2007).2 Also, many current 

efforts by government agencies and private entities to research and 

address adverse events target care provided in hospitals. 

OIG is conducting a series of studies through 2009 to fulfill the 

requirements in the Act and to inform decisionmakers regarding 

adverse events. To facilitate OIG efforts to comply with the Act, we first 

sought to identify key issues regarding adverse events in hospitals to 

provide direction and context for our future work. To describe these key 

issues, this overview report combines evidence, analysis, and opinion 

from a wide range of sources. Key issues include current analysis and 

discourse regarding the primary components of the Act: incidence, 

payment (including CMS processes), and the balance between protecting 

patient privacy and providing information to improve patient safety. 

Other OIG studies focus on estimating the incidence of adverse events 

among Medicare beneficiaries, State efforts to operate adverse event 

reporting systems, Medicare beneficiaries receiving potentially 

inappropriate drug pairs that may reflect medication errors, and 

hospital actions to address and prevent adverse events. 

Adverse Events in Hospitals 

The term “adverse event” describes any harm to a patient as a result of 

medical care. An adverse event indicates that the care resulted in an 

undesirable clinical outcome and that the clinical outcome was not 

caused by an underlying disease. Adverse events include medical 

errors, such as use of incompatible blood products. They may also 

include more general substandard care that results in harm, such as 

infection because of contaminated equipment, incorrect diagnoses, and 

lack of patient monitoring during treatment. Research, policies, and 

action taken to reduce adverse events often focus on mistakes and 

systemic problems with care. However, adverse events do not always 

involve errors, negligence, or poor quality of care and may not always be 

preventable. 

Reducing the incidence of adverse events in hospitals is a critical 

component of efforts to ensure patient safety and to provide quality 

health care. The Institute of Medicine (IOM) report, “To Err is Human: 

Building a Safer Health System,” is often credited with first drawing 

2 

2 Based on data contained in Congressional Budget Office (CBO) “Fact Sheet for CBO’s 

March 2007 Baseline: Medicare,” March 7, 2007. Available online at 

http://www.cbo.gov/budget/factsheets/2007b/medicare.pdf. Accessed on September 8, 2008. 

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INTRODUCTION 

widespread attention to the issue of adverse events in hospitals.3 IOM 

cited two studies that used medical record reviews to identify adverse 

events (defined as injuries caused by medical management) with similar 

results. The first study, using hospitalizations in a single State, found 

that 3.7 percent of hospital patients experienced adverse events, 

58 percent of these events were preventable, and 13.6 percent resulted 

in death.4 A second study, replicating the methodology in two other 

States, found that 2.9 percent of hospital patients experienced adverse 

events, of which 53 percent were preventable and 6.6 percent resulted in 

death.5 IOM extrapolated these results to hospital admissions 

nationwide for 1997, concluding that preventable adverse events caused 

“at least 44,000 and perhaps as many as 98,000 deaths in hospitals each 

year.”6 

Following the IOM report, the Federal Government formed the Center 

for Patient Safety and Quality Improvement within AHRQ to coordinate 

research regarding patient safety. Since that time, AHRQ has 

conducted and funded many research efforts regarding adverse events, 

promulgated recommended practice guidelines, and provided much 

analysis and guidance regarding patient safety issues. As of 

September 2008, the patient safety Web site operated by AHRQ, Patient 

Safety Network (PSnet), provides over 3,500 publications related to 

patient safety and adds an average of 10 publications a week.7 

Hospital Oversight and Guidance 

3 

Various government agencies and other entities are responsible for 

addressing adverse events in hospitals, often as part of overall efforts to 

ensure that minimum standards are met and improve health care 

quality. Federal and State governments, nonprofit entities, academic 

3 L. T. Kohn, J. M. Corrigan, and M. S. Donaldson, eds., “To Err is Human: Building a 

Safer Health System.” A Report of the Committee on Quality of Health Care in America, 

Institute of Medicine, Washington, DC, National Academy Press, 1999. 

4 T. A. Brennan, L. L. Leape, N. M. Laird, et al., “Incidence of Adverse Events and 

Negligence in Hospitalized Patients: Results of the Harvard Medical Practice Study 1,” 

New England Journal of Medicine, 324(6), 1991, pp. 370–376. Abstract available online at 

http://content.nejm.org/cgi/content/abstract/324/6/370. Accessed on October 10, 2008. 

5 E. J. Thomas, D. M. Studdert, H. R. Burstin, et al., “Incidence and Types of Adverse 

Events and Negligent Care in Utah and Colorado,” Medical Care, 38(3), 2000, pp. 261–271. 

Abstract available online at http://www.ncbi.nlm.nih.gov/pubmed/10718351. Accessed on 

October 10, 2008. 

6 L. T. Kohn, J. M. Corrigan, and M. S. Donaldson, eds., “To Err is Human: Building a 

Safer Health System.” A Report of the Committee on Quality of Health Care in America, 

Institute of Medicine, Washington, DC, National Academy Press, 1999. 

7 Estimate of number of publications based on interviews with PSnet editors. AHRQ 

PSnet is available online at http://www.psnet.ahrq.gov/. Accessed on October 9, 2008. 

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INTRODUCTION 

institutions, professional organizations, and accrediting bodies have set 

standards, issued guidance, and provided technical assistance to 

hospitals. Additionally, hospitals must track and analyze adverse 

events as a condition of participation for Medicare and Medicaid 

certification.8 Although hospitals are required by CMS to develop and 

maintain systems for tracking adverse events, Federal regulations do 

not require specific system characteristics. 

Oversight of hospitals is generally conducted by States and 

accreditation organizations, most prominently the Joint Commission. 

The Joint Commission establishes standards for hospitals, conducts 

periodic surveys to review policies and to observe operations onsite, and 

accepts hospital reports of adverse events. Accreditation by the Joint 

Commission is voluntary, and approximately 80 percent of U.S. 

hospitals are accredited. Accreditation requires that hospitals comply 

with many standards, some of which relate specifically to patient 

safety.9 In 2002, the Joint Commission established its National Patient 

Safety Goals program to provide hospitals with recommended practices 

related to “persistent patient safety problems.” National Patient Safety 

Goals include preventing patients from falling and preventing surgical 

errors.10 For 2009, the program added three goals specific to health 

care-associated infections.11

State health departments address adverse events and quality-of-care 

issues through hospital licensing. To be licensed, hospitals must meet 

minimum care standards established by the States. In some States, a 

Joint Commission accreditation serves as evidence that these standards 

have been met. Additionally, State health departments may conduct 

onsite surveys of hospitals in response to complaints by patients or 

families. Other private organizations establish standards for quality of 

care or patient safety and give hospitals accreditation status or ratings 

based on meeting standards and demonstrating results. Federally 

4 

8 42 CFR § 482.21. 

9 The Joint Commission, The Joint Commission Requirements Hospital Page, 

“Requirements for Accreditation,” updated October 29, 2008. Available online at 

http://www.jcrinc.com/TJC-Requirements-Hospital-Page/. Accessed on December 5, 2008. 

10 The Joint Commission, “2009 Hospital National Patient Safety Goals,” October 2008. 

Available online at http://www.jointcommission.org/NR/rdonlyres/40A7233C-C4F7-4680-

9861-80CDFD5F62C6/0/09_NPSG_HAP_gp.pdf. Accessed on October 21, 2008. 

11 The Joint Commission, “News Release: The Joint Commission Announces 2009 

National Patient Safety Goals,” June 17, 2008. Available online at 

http://www.jointcommission.org/PatientSafety/NationalPatientSafetyGoals/09_hap_npsgs.h

tm. Accessed on August 28, 2008. 

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INTRODUCTION 

funded Quality Improvement Organizations, private entities that 

contract with CMS to support quality of care, also provide guidance and 

technical assistance to hospitals and other Medicare providers. 

Various health care entities often use different terms and definitions for 

adverse events. Some of these entities have developed lists of adverse 

events for more precise definition and measurement of events, including 

the following prominent lists: 

• NQF—serious reportable events, originally referred to as never 

events because they should never happen in a health care setting;12

• The Joint Commission—sentinel events, the term “sentinel” 

denoting a serious event that signals the need for immediate 

investigation and response;13 

• AHRQ—Patient Safety Indicators (PSI), conditions or circumstances 

identifiable in administrative data, such as discharge and billing 

records;14 and 

• CMS—categories of hospital-acquired conditions for which Medicare 

will not pay hospitals higher reimbursement.15

Medicare Payment for Adverse Events 

Medicare traditionally did not distinguish between costs incurred in 

treating existing illness from those incurred as the result of adverse 

events. Medicare reimbursement to hospitals is generally determined 

by grouping patient conditions into diagnosis-related groups (DRG) 

based on the average cost of care for patients with similar conditions. 

Historically, if a Medicare beneficiary experienced harm from an 

5 

12 NQF, “Serious Reportable Events in Healthcare 2006 Update: A Consensus Report,” 

Washington, DC, 2007, p. 7. Available online at 

http://www.qualityforum.org/pdf/reports/sre/txsrepublic.pdf. Accessed on October 10, 2008. 

13 The Joint Commisssion, “Sentinel Events Fact Sheet,” Section IV, Reviewable Sentinel 

Events, updated July 2007, p. 3. Available online at 

http://www.jointcommission.org/NR/rdonlyres/F84F9DC6-A5DA-490F-A91FA9FCE26347C4/0/SE_chapter_july07.pdf. Accessed on October 10, 2008. 

14 AHRQ, “Patient Safety Indicators Overview,” AHRQ Quality Indicators, 

February 2006. Available online at 

http://www.qualityindicators.ahrq.gov/psi_overview.htm. Accessed on August 28, 2008. 

15 CMS, “Hospital-Acquired Conditions,” August 19, 2008. Available online at 

http://www.cms.hhs.gov/HospitalAcqCond/06_HospitalAcquired_Conditions.asp#TopOfPage. Accessed on October 10, 2008. 

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INTRODUCTION 

adverse event that resulted in assignment of a more expensive DRG, 

CMS paid the full claim without any payment reduction.16 

Hospital-Acquired Conditions. The Deficit Reduction Act of 2005 (DRA) 

required CMS to select at least two hospital-acquired conditions for 

which hospitals would not be paid higher Medicare reimbursement.17 

CMS issued a final regulation in August 2007 to initiate policy for which 

CMS would deny hospitals higher payment for admissions complicated 

by eight categories of hospital-acquired conditions. CMS chose the 

categories of conditions in collaboration with the Centers for Disease 

Control and Prevention (CDC) and used the following criteria: 

• conditions that are high cost, high volume, or both; 

• conditions that, when present as a secondary diagnosis, result in 

assignment of a case to a DRG that has a higher payment; 

• conditions that could be reasonably prevented by using readily 

available evidence-based guidelines; and 

• conditions that are identifiable based on one or more unique 

diagnosis codes.18 

Changes to CMS Payment. In addition to designating the list of 

categories of hospital-acquired conditions, the final regulation 

implements a more specific list of DRGs called Medicare Severity 

Diagnosis-Related Groups (MS-DRG). MS-DRGs split some of the prior 

DRGs into two or three individual classes based on the presence of a 

complication or comorbidity.19 Each medical diagnosis (ICD-9-CM) 

code20 submitted must include a new indicator designating whether the 

condition is or is not “present on admission” (POA).21 The final rule 

applies only to traditional fee-for-service Medicare and does not apply to 

16 Department of Health and Human Services (HHS), CMS, Press Release, “Eliminating 

Serious, Preventable, and Costly Medical Errors – Never Events,” May 18, 2006. Available 

online at http://www.cms.hhs.gov/apps/media/press/release.asp?Counter=1863. Accessed on 

August 28, 2008. 

17 DRA, § 5001(c), P.L. No. 109-171 (adding Social Security Act, § 1886(d)(4)(D)), 

provided for a quality adjustment in DRG payments for certain hospital-acquired 

conditions. 

18 Ibid. 

19 42 CFR § 412.10, fiscal year (FY) 2008 Inpatient Prospective Payment System (IPPS) 

Final Rule, 72 Fed. Reg. 47130, 47138 (Aug. 22, 2007). 

20 The ICD-9-CM system assigns diagnoses and procedure codes associated with 

hospitalizations and is maintained jointly by the National Center for Health Statistics 

(NCHS) and CMS. NCHS, “The International Classification of Diseases, 9th Revision, 

Clinical Modification” (ICD-9-CM), Sixth Edition, issued for use beginning October 1, 2007. 

21 DRA, P.L. No. 109-171, § 5001(c), adding Social Security Act, § 1886(d)(4)(D). 

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INTRODUCTION 

Medicare managed care (Medicare Advantage Organizations (MAO)). 

To determine how MAOs can be held accountable for adverse events, 

CMS will begin in 2010 to collect data from MAOs regarding care 

associated with adverse events.22

In July 2008, CMS issued a final rule to expand the list of 

hospital-acquired conditions for a total of 10 categories of conditions. 

Effective October 1, 2008, CMS will deny hospitals higher payment for 

Medicare admissions complicated by these categories of conditions:23 

• Foreign object retained after surgery 

• Air embolism 

• Blood incompatibility 

• Pressure ulcers (Stages III and IV) 

• Falls resulting in fracture, dislocation, intracranial injury, or 

crushing injury; category also includes burn and electric shock 

• Manifestations of poor glycemic control resulting in certain 

conditions 

• Catheter-associated urinary tract infection 

• Vascular-catheter-associated infection 

• Deep vein thrombosis/pulmonary embolism associated with total 

knee replacement or hip replacement

• Surgical site infection associated with certain surgeries 

Also in 2008, CMS began analysis of its coverage policy regarding 

certain events on the NQF list of serious reportable events24 and issued 

a letter to State Medicaid directors providing guidance for State 

implementation of a coordinated denial of higher payment for 

admissions wherein Medicaid serves as a secondary payer.25 

7 

22 Supporting Statement for Paperwork Reduction Act Submissions: Part C Medicare 

Advantage Reporting Requirements and Supporting Regulations, 42 CFR § 422.516 (a). 

23 FY 2009 Final IPPS Rule, 73 Fed. Reg. 48434 and 48471 (Aug. 19, 2008). 

24 Social Security Act § 1862(a)(1)(A) provides authority for CMS to determine whether a 

service or an item is reasonable and necessary. CMS, Medicare Coverage Database, 

“National Coverage Analyses: Surgery on the Wrong Body Part; Surgery on the Wrong 

Patient; and Wrong Surgery Performed on a Patient,” updated May 30, 2008. Available 

online at http://www.cms.hhs.gov/mcd/index_list.asp?list_type=nca. Accessed on 

November 4, 2008. 

25 CMS, Letter to State Medicaid Directors, SMDL #08-004, July 31, 2008. Available 

online at http://www.cms.hhs.gov/SMDL/downloads/SMD073108.pdf. Accessed on 

October 20, 2008. 

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SCOPE AND METHODOLOGY 

Scope 

This report describes key issues regarding adverse events in hospitals. 

We conducted a literature review of a wide range of published work 

covering not only adverse events but also the broader topic of patient 

safety. We also conducted structured interviews with stakeholders, 

including researchers; clinicians; and officials from government 

agencies, oversight entities, and patient safety groups. These activities 

occurred between March 2007 and November 2008. 

Literature Review 

The literature review included professional and academic journal 

articles and government reports. We selected literature based on its 

relevancy to the topic, currency, and citation by other sources. We 

identified published works using a variety of sources, including: 

• input from staff at AHRQ, CMS, and other stakeholders; 

• Internet search tools, e.g., AHRQ’s PSnet, Health Services Research 

Library, and Medline; and 

• bibliographies in literature identified by these sources. 

Stakeholder Interviews 

We conducted 85 structured interviews with a variety of stakeholders to 

gain insight into policies, practices, and viewpoints regarding adverse 

events. The interview protocol covered a range of issues related to 

adverse events and patient safety, including the causes and frequency of 

events, strategies for addressing events, and payment for related care. 

In many cases, we had follow-up conversations with stakeholders later 

during our study period. 

In compiling the group of stakeholders, we sought to represent a broad 

spectrum of interests and viewpoints. Interview respondents included 

experts in adverse events from a variety of perspectives, including 

national oversight, advocacy, and professional organizations, as well as 

health plans, hospitals, and practitioners experienced in identifying and 

addressing adverse events. Additionally, stakeholders included many 

prominent researchers and policymakers in the field of patient safety, 

including several members of the initial NQF committee that developed 

the list of serious reportable events. We identified stakeholders for 

interviews using a variety of sources, including: 

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INTRODUCTION 

• a list of patient safety entities and contacts provided by AHRQ’s 

Center for Quality and Patient Safety, the National Patient Safety 

Foundation, and the Joint Commission; 

• entities and contacts referenced in the literature; and 

• referrals from other stakeholders as our interviews progressed. 

We completed interviews with 98 percent of the identified stakeholders 

(78 of 80). For cases in which we were not able to interview the 

identified stakeholders, we ensured that our list included stakeholders 

from similar entities. For example, we interviewed staff from four State 

agencies identified as exhibiting a range of approaches to patient safety 

issues. The viewpoints of the individuals we interviewed do not 

represent official positions of their organizations. We selected 

representatives from each of the following broad groups. (For a list of 

responding stakeholder entities, see Appendix D.) 

• Federal agencies—8 interviews 

• State agencies—4 interviews 

• Professional associations—10 interviews 

• Oversight/standard-setting organizations—5 interviews 

• Patient safety advocacy groups—7 interviews 

• Public policy groups—9 interviews 

• Providers (hospitals and networks)—28 interviews 

• Private Payers (managed care organizations)—4 interviews 

• University researchers—5 interviews 

• Service contractors26—5 interviews 

Additional Data From Companion Study 

In our discussion of State adverse event reporting systems on 

pages 23–26, we use information about State policies and practices 

collected for a companion study in this series, “Adverse Events in 

Hospitals: State Reporting Systems” (OEI-06-07-00471). The data were 

collected through interviews with and document requests of all States 

and the District of Columbia between January and April 2008. 

9 

26 Service contractors include private entities that provide products or services to 

hospitals that are related to patient safety or quality of care, such as adverse event 

reporting software and medical record review. 

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INTRODUCTION 

Data Analysis 

Our analysis of information from literature and interviews focused on 

four primary tasks: 

• identifying and refining key issues; 

• gathering expert opinions, insight, and evidence regarding these key 

issues; 

• synthesizing this information to determine both prevailing and 

countervailing viewpoints of stakeholders and literature; and 

• identifying examples to illustrate and clarify these points. 

When we refer to stakeholder viewpoints in the report, these summary 

statements represent the predominant viewpoint of the stakeholders 

interviewed. Despite the range of viewpoints represented, we found a 

great deal of agreement among stakeholders and the literature 

regarding the status of current efforts to address adverse events in 

hospitals. Where we found widespread agreement, the report provides 

summary statements that reflect the predominant viewpoint of these 

sources. Because of the variety of sources and the often nuanced 

discourse regarding these complex issues, this report does not provide 

stakeholder responses by percentage. Rather, the report includes 

selected discussion and examples to illustrate the prevailing view or to 

add insight. For examples of our analysis and quantified responses to 

key questions, see Appendix E. 

Limitations 

In collecting information, we sought to include widely recognized 

literature and stakeholders and to represent a wide variety of 

viewpoints based on research and analysis. Additionally, the number of 

potential stakeholders was very large, necessitating selection of 

representatives to speak for each broader group of entities. As a result, 

we may have excluded input that could have provided additional or 

different insight. 

Standards 

This study was conducted in accordance with the “Quality Standards for 

Inspections” issued by the President’s Council on Integrity and 

Efficiency and the Executive Council on Integrity and Efficiency. 

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KEY ISSUES 

_____________________________ 

Δ KEY ISSUES 

Issue 1: Estimates of the incidence of adverse events in 

hospitals vary widely and measurement is difficult 

Most stakeholders reported that, although it is difficult to measure, 

they perceive that the incidence remains close to that cited by IOM in 

1999: roughly 3 percent of hospitalized patients experience adverse 

events. No subsequent study has attempted to determine a broad, 

national estimate of adverse events, such as was reported by IOM; 

however, researchers have conducted a number of smaller studies 

focusing on specific events and populations. These efforts have provided 

a wide range of estimates—from less than 3 percent to greater than 

20 percent of patients experiencing adverse events. See Appendix F for 

examples of this research, including rates and methods. A number of 

stakeholders reported that when discussing the incidence of adverse 

events in general terms, they assume a slightly higher rate: 10 percent 

of hospital stays involve some type of health care-related problem, with 

about half (5 percent of hospital stays) resulting in some degree of harm 

to the patient and thereby constituting an adverse event. 

Research indicates that elderly patients have a greater number of 

preexisting conditions and face greater risks of experiencing adverse 

events.27 Stakeholders reported that adverse events are more common 

among the elderly because of the clinical complexity of their care, 

including multiple medications, higher rates of surgery, and longer 

hospital stays. Elderly are particularly vulnerable to medicationrelated adverse events, in large part because of administration of 

multiple medications.28 

Researchers use a variety of methods to measure incidence, but accurate 

identification of events is challenging and no single method is optimal 

Given the often complex nature of illness and injury, determining 

whether an adverse event occurred can be difficult. Identifying adverse 

events may require evaluating the prior condition of the patient; 

determining what occurred in the delivery of health care; and 

11 

27 T. A. Brennan and E. J. Thomas, “Incidence and Types of Preventable Adverse Events 

in Elderly Patients: Population Based Review of Medical Records,” BMJ, 320, 

March 18, 2000, pp. 741–744. Available online at 

http://www.bmj.com/cgi/reprint/320/7237/741. Accessed on October 10, 2008. 

28 D. M. Picone, M. G. Titler, J. Dochterman, et al., “Predictors of Medication Error 

Among Elderly Hospitalized Patients,” American Journal of Medical Quality, 23(2), 

March–April 2008, pp. 115–127. Abstract available online at 

http://www.ncbi.nlm.nih.gov/pubmed/18305099. Accessed on October 10, 2008. 

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KEY ISSUES 

distinguishing between the effect of the occurrence, the prior condition, 

and any natural progression of an illness or injury. Stakeholders report 

that this difficulty can be compounded in a hospital setting, with 

patients receiving care from multiple caregivers and patients are 

subject to intricate hospital systems. In some cases, patients and 

caregivers may not be aware that an event occurred and therefore do 

not record information useful for identifying the event retrospectively. 

Entities that address adverse events sometimes categorize them by the 

severity of harm incurred and may choose to focus on adverse events 

with the greatest degree of harm. A commonly used scale of harm was 

developed by the National Coordinating Council for Medication Errors 

Reporting and Prevention (NCC MERP).29 The scale classifies events 

beginning with circumstances that have the capacity to cause error 

(near miss) and escalating through levels of patient harm (prolonged 

hospitalization, temporary disability) and eventually to patient death. 

NQF’s list of serious reportable events and the Joint Commission’s list 

of sentinel events include medication-related adverse events only when 

the patient suffers serious disability or death.30 

Researchers and hospitals use various methods to determine the 

incidence of adverse events and appear to have little agreement about 

the most reliable method. Studies comparing the results of various 

methods have found widely divergent outcomes. When researchers 

attempted to find the same adverse events using different data 

collection methods, results varied substantially. For example, one study 

found that 8 percent of hospitalized patients reported an adverse event, 

but only half of these events were documented in the medical record, 

and none of the events were documented in the hospital incident 

reporting system.31 Comparisons of adverse event rates are difficult 

because researchers may use different definitions and methods for 

identifying adverse events. For example, only two specific adverse 

events are characterized in the same way on all four of the prominent 

12 

29 The National Coordinating Council for Medication Error Reporting and Prevention, 

“NCC MERP: The First Ten Years, Defining the Problem and Developing Solutions,” 

December 2005, Figure 1, p. 29. Available online at 

http://www.nccmerp.org/pdf/reportFinal2005-11-29.pdf. Accessed on October 10, 2008. 

30 Sources referenced in footnotes 13 and 14 on p. 5. 

31 S. N. Weingart, O. Pagovich, D. Z. Sands, et al., “What Can Hospitalized Patients Tell 

Us About Adverse Events? Learning from Patient-Reported Incidents,” Journal of General 

Internal Medicine, 20(9), 2005, pp. 830–836. Abstract available online at 

http://www.ncbi.nlm.nih.gov/pubmed/16117751. Accessed on October 10, 2008. 

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KEY ISSUES 

lists referenced on page 5 (AHRQ, CMS, Joint Commission, and NQF): 

object left in patient after surgery and blood incompatibility. 

13 

MS 

In some cases, events on different lists might cover the same 

circumstances even though they are defined differently. For example, 

the Joint Commission list of Sentinel Events includes the broad 

definition of an event resulting in “unanticipated death or permanent 

loss of function.”32 The NQF list of Serious Reportable Events focuses 

primarily on events that result in “death or serious disability,” 

specifying the cause of the event, such as device contamination or 

medication error (see Appendix C).33 Additionally, CMS has taken 

steps to analyze the relationship between the NQF list and the C

categories of hospital-acquired conditions. In proposing conditions to be 

added to its list for FY 2009, a CMS press release indicated that the 

NQF list was used to inform selection of the hospital-acquired 

conditions.34

Measurement challenges make it difficult to determine the actual 

incidence of adverse events and to gauge progress in reducing them. In 

general, stakeholders advocate routine monitoring through automated 

methods to identify adverse events, followed by periodic use of more 

extensive methods to confirm results and uncover potential causes. 

Common methods include: 

• Administrative Data Screening. Automated programs can review 

administrative data, such as payment claims and hospital discharge 

data, to identify possible adverse events. For example, AHRQ 

developed software programs to calculate its PSIs using 

administrative data and distributes this software free of charge to 

hospitals, oversight entities, and researchers. Using administrative 

data allows researchers to screen for adverse events among large 

32 The Joint Commission, “Sentinel Event Policy and Procedures,” Reviewable Sentinel 

Events, updated July 2007, p. 3. Available online at 

http://www.jointcommission.org/NR/rdonlyres/F84F9DC6-A5DA-490F-A91FA9FCE26347C4/0/SE_chapter_july07.pdf. Accessed on August 28, 2008. 

33 NQF, “Serious Reportable Events in Health Care: 2005–2006 Update,” 

October 16, 2006. Available online at 

http://www.qualityforum.org/projects/completed/sre/fact-sheet.asp. Accessed on 

August 28, 2008. 

34 HHS, CMS, “Incorporating Selected NQF and Never Events into Medicare’s List of 

Hospital-Acquired Conditions,” Press Release, April 14, 2008. Available online at 

http://www.cms.hhs.gov/apps/media/press/factsheet.asp?Counter=3043&intNumPerPage=1

0&checkDate=&checkKey=&srchType=1&numDays=3500&srchOpt=0&srchData=&srchOp

t=0&srchData=&keywordType=All&chkNewsType=6&intPage=&showAll=&pYear=&year=

&desc=&cboOrder=date. Accessed on August 28, 2008. 

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KEY ISSUES 

numbers of cases and also provides a denominator for establishing a 

rate of events. However, adverse events can be difficult to identify 

using automated methods, and research indicates that screening 

detects different types of adverse events at different rates.35 The 

newly required POA indicators will likely improve the effectiveness 

of screening for adverse events within Medicare claims data. 

• Electronic Medical Record Surveillance. Routine surveillance of 

medical records is an emerging technology that serves as an initial 

screen to identify potential adverse events for further review. 

Surveillance systems detect adverse events in medical records by 

identifying unusual circumstances, such as prolonged 

hospitalizations or administration of an antidote. Researchers 

report optimism that advances in these systems will enable 

hospitals to detect some adverse events as they occur.36 However, 

many hospitals lack computerized medical records and surveillance 

systems can be expensive to implement.37 

• Medical Record Review. Medical records typically provide more 

complete information than administrative data regarding the impact 

of an event by including information about the patient’s condition 

prior to and following the event. However, researchers report that 

records often have incomplete descriptions and insufficient 

documentation.38 Also, record reviews rely on the subjective 

judgment of the reviewer, and conditions caused by adverse events 

can be difficult to distinguish from preexisting conditions. To 

improve validity, studies may rely on two or more reviewers to 

confirm the results of each chart review; however, researchers in one 

35 A. N. West, W. B. Weeks, and J. P. Bagian, “Rare Adverse Events in VA Inpatient 

Care: Reliability Limits to Using Patient Safety Indicators as Performance Measures,” 

Health Services Research, 2007, pp. 249–266. Available online at 

http://www3.interscience.wiley.com/cgi-bin/fulltext/119390777/PDFSTART. Accessed on 

October 10, 2008. 

36 M. K. Szekendi, C. Sullivan, A. Bobb, et al., “Active Surveillance Using Electronic 

Triggers to Detect Adverse Events in Hospitalized Patients,” Quality and Safety in Health 

Care, 15, 2006, pp. 184–190. Available online at 

http://qshc.bmj.com/cgi/content/full/15/3/184?rss=1. Accessed on August 10, 2008. 

37 M. F. Furukawa, T. S. Raghu, T. J. Spaulding, and A. Vinze, “Adoption of Health 

Information Technology for Medication Safety in U.S. Hospitals, 2006, Health Affairs, 27(3), 

May–June 2008, pp. 865–875. Abstract available online at 

http://content.healthaffairs.org/cgi/content/abstract/27/3/865. Accessed on October 10, 2008. 

38 M. M. Rosenthal, P. L. Cornett, K. M. Sutcliffe, and E. Lewton, “Beyond the Medical 

Record: Other Modes of Error Acknowledgment,” Journal of General Internal Medicine, 

20(5), May 2005, pp. 404–409. Abstract available online at 

http://www.ncbi.nlm.nih.gov/pubmed/15963161. Accessed on October 10, 2008. 

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KEY ISSUES 

prominent study found moderate to poor interrater reliability 

between reviewers.39 

• Patient Surveys or Interviews. A number of studies have sought to 

identify adverse events by asking patients and their families 

whether they detected any problems during hospitalization, 

typically through interviews or mail surveys. This information is 

considered most useful when patients or families are asked about 

events shortly after they occur. One study found that patients 

contacted within 10 days of discharge identified more adverse events 

affecting their care than medical record reviewers and hospital 

incident reports.40 Another study of medical errors received survey 

responses from 2,000 hospital patients and found that 11 percent of 

patients described problems but that, when verified against medical 

records, only 2 percent described events that represented actual 

medical errors.41 Stakeholders indicated that potential drawbacks 

with patient surveys include low response rate, poor recollection by 

patients, and lack of understanding of adverse events. 

• Observation of Patient Care. Clinical observation relies on collecting 

information during or immediately after the delivery of care. 

Observational data can derive from direct clinical observation 

(in person or by recording) and surveys of clinicians. Based on a 

review of several studies using this method, observation typically 

finds a higher incidence of adverse events than other methods and is 

thought to provide more precise descriptions of adverse events than 

other methods.42 For example, one study of operating room 

anesthesia found a 30-percent rate of adverse events identified 

39 E. J. Thomas, D. M. Studdert, and T. A. Brennan, “The Reliability of Medical Record 

Review for Estimating Adverse Event Rates,” Annals of Internal Medicine, 136(11), 

June 2002, pp. 812–816. Available online at 

http://www.annals.org/cgi/reprint/136/11/812.pdf?ijkey=0235f38f381989d08b8fb62bde3bf9f1

ae94951c. Accessed on October 10, 2008.

40 S. N. Weingart, O. Pagovich, D. Z. Sands, et al., “What Can Hospitalized Patients Tell 

Us About Adverse Events? Learning from Patient-Reported Incidents,” 2005, pp. 830–836. 

Abstract available online at http://www.ncbi.nlm.nih.gov/pubmed/16117751. Accessed on 

October 9, 2008. 

41 L. I. Solberg, S. E. Asche, and B. M. Averbeck, “Can Patient Safety Be Measured by 

Surveys of Patient Experiences?” The Joint Commission Journal on Quality and Patient 

Safety, 34(5). May 2008, pp. 266–274. Abstract available online at 

http://www.ncbi.nlm.nih.gov/pubmed/18491690. Accessed on October 9, 2008. 

42 J. M. Rothschild, C. P. Landrigan, J. W. Cronin, et al., “The Critical Care Safety 

Study: the Incidence and Nature of Adverse Events and Serious Medical Errors in 

Intensive Care,” Critical Care Medicine, 33, 2005, pp. 1694–1700. Abstract available online 

at http://www.ncbi.nlm.nih.gov/pubmed/16096443. Accessed on October 10, 2008.

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KEY ISSUES 

through a physician survey administered immediately following 

surgery.43 Drawbacks to observation of patient care reported by 

stakeholders include high labor costs, the necessity for highly 

trained observers, human error in recognizing adverse events, and 

concerns about patient confidentiality. 

_____________________________ 

Issue 2: Nonpayment policies for adverse events are 

gaining in prominence and are viewed as a powerful 

incentive to reduce incidence but raise potential 

drawbacks 

In 2008, CMS implemented policy to deny hospitals higher payment for 

admissions complicated by selected adverse events. Stakeholders 

reported their belief that policies of nonpayment to hospitals for care 

associated with adverse events will put financial pressure on providers 

to improve patient safety and reduce the incidence of adverse events. 

They also reported that nonpayment may change clinical practice and 

hospital procedures to more closely follow recommended guidelines for 

quality of care and patient safety.44 However, stakeholders cautioned 

that nonpayment for adverse events may cause negative consequences, 

such as limiting patients’ access to care and increasing costs to hospitals 

while reducing revenue. 

Private health care payers and hospitals are increasingly adopting 

policies to eliminate payment for hospital-acquired conditions 

A small number of hospitals and health plans instituted nonpayment 

policies in previous years, but these policies are becoming more 

widespread following the change in CMS policy. The first private health 

plan to deny payment for hospital-acquired conditions, a single State 

insurer with about 2 million enrollees, began its nonpayment policy in 

16 

43 A. Oken, M. D. Rasmussen, J. M. Slagle, et al., “A Facilitated Survey Instrument 

Captures Significantly More Anesthesia Events Than Does Traditional Voluntary Event 

Reporting,” Anesthesiology, 107(6), December 2007, pp. 909–922. Available online at 

http://www.anesthesiology.org/pt/re/anes/pdfhandler.00000542-200712000-

00010.pdf;jsessionid=LyypRm2F9dD90HQ2mH2rh3HvpGQTDpppWhjlhXdNQgJkt9lHvqlp!

691622333!181195628!8091!-1. Accessed on October 9, 2008. 

44 R. M. Wachter, N. E. Foster, and R. A. Dudley, “Medicare’s Decision to Withhold 

Payment for Hospital Errors: The Devil is in the Details,” Joint Commission Journal on 

Quality and Patient Safety, February 2008, 34(2), pp. 116–123. Abstract available online at 

http://www.ncbi.nlm.nih.gov/pubmed/18351196. Accessed on October 9, 2008. 

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KEY ISSUES 

2005.45 An increasing number of private health plans, including several 

large national companies, announced plans in 2007 and 2008 to develop 

nonpayment policies, although full implementation may be a year or 

more away. Similarly, hospitals are increasingly adopting policies to 

withhold billing for care associated with certain adverse events, 

regardless of whether the payer is the government, a health plan, or the 

patient. A 2007 hospital survey found that 52 percent of responding 

hospitals (1,285 hospitals) had adopted this “no bill” policy, most within 

the prior year.46 

Stakeholders predict that nonpayment policies will reduce health care 

costs in the long term 

Potential cost savings include both savings in government and 

private-payer reimbursement owing directly to nonpayment and cost 

savings found through reducing adverse events by way of improved 

practices. This “business case for safety” argues that any costs 

expended to improve patient safety are outweighed by the reduced 

medical expenses, shorter recovery times, and higher quality of life for 

patients who avoid harm (injury or illness) associated with an adverse 

event.47 Research indicates that the cost of adverse events is high and 

that, prior to nonpayment policies, hospitals did not bear the impact of 

these costs. A study of individual hospital costs found that the annual 

cost of care associated with adverse drug events for a 700-bed hospital 

was $5.6 million,48 and a 2003 study aggregating costs across hospitals 

17 

45 Health Partners, Inc., “Health Partners Hospital Payment Policy: Never Events 

Policy.” Available online at http://www.healthpartners.com/portal/866.html. Accessed on 

September 8, 2008. 

46 Healthcare Financial Management Association News, “Half of U.S. Hospitals 

Reporting to Leap Frog Say They Won’t Bill for a ‘Never Event,’” September 28, 2007. 

Available online at http://www.hfma.org/hfmanews/default,month,2007-09.aspx. Accessed 

on September 8, 2008. 

47 M. Mello, D. Studdert, E. Thomas, et al., “Who Pays for Medical Errors: An Analysis 

of Adverse Event Costs, the Medical Liability System, and Incentives for Patient Safety 

Improvement,” Journal of Empirical Legal Studies, 4(4), December 2007, pp. 835–860. 

Available online at http://www3.interscience.wiley.com/cgibin/fulltext/117994376/PDFSTART. Accessed on October 13, 2008. 

48 D. W. Bates, N. Spell, D. J. Cullen, et al., “The costs of adverse drug events in 

hospitalized patients,” the Journal of the American Medical Association, 277(4), 

January 22, 2007, pp. 307–312. Abstract available online at http://jama.amaassn.org/cgi/content/abstract/277/4/307?ijkey=87ede15670fb1a6e28e177d75d105fde5d61dc1

7&keytype2=tf_ipsecsha. Accessed on October 13, 2008. 

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KEY ISSUES 

estimated that certain medical injuries among hospitalized patients 

nationwide result in excess charges of $9.3 billion annually.49 

Potential drawbacks of nonpayment could include limiting access to care 

and increasing hospital costs while reducing revenue 

The emergence of nonpayment policies has accelerated longstanding 

debates regarding adverse events, such as how readily preexisting 

conditions can be diagnosed and which parties are responsible for 

additional health care costs resulting from adverse events. 

Stakeholders raised the following potential drawbacks to nonpayment: 

Limiting Access to Care. Stakeholders raised concern that to avoid 

hospital-acquired conditions, hospitals may limit access for high-risk 

patients. High-risk patients, such as the elderly, are likely to have 

several ailments and therefore require more complicated care. Such 

patients might be more likely to bring conditions into hospitals that are 

easily missed (such as pressure ulcers) or to have poor outcomes of care 

as a result of their compounded ailments and frailty. 

Increased Hospital Costs. Hospitals anticipate initial cost increases as a 

result of implementing nonpayment policies, including training and 

systems costs to incorporate changes in processing claims and increased 

costs in testing for and diagnosing conditions POA. Staff also voiced 

concern that unilateral testing could lead to inappropriate treatment 

that could place patients at clinical risk. For example, a physician 

specializing in emergency care noted that it is common for elderly 

patients to enter the hospital with mild urinary tract infections 

unrelated to the primary conditions that require urgent care. A positive 

test for infection could lead the clinician to administer antibiotics that 

serve little clinical benefit but could put the patient at risk for 

additional ailments, such as stomach ulcers, and could ultimately lead 

to the emergence and spread of drug-resistant microorganisms, placing 

patients and health care workers at risk.50 

Changes in Hospital Revenue. Hospitals could experience decreases in 

revenue for some admissions at the same time as their costs rise. 

49 C. Zahn and M. R. Miller, “Excess Length of Stay, Charges, and Mortality Attributable 

to Medical Injuries During Hospitalization,” the Journal of the American Medical 

Association, 290(14), October 8, 2003, pp. 1868–1874. Available online at http://jama.amaassn.org/cgi/content/full/290/14/1868. Accessed on October 9, 2008. 

50 C. Edlund and C. E. Nord, “Effect on the Human Normal Microflora of Oral Antibiotics 

for Treatment of Urinary Tract Infections,” Journal of Antimicrobial Chemotherapy, 

Suppl. 46(S1), 2000, pp. 41–48. Available online at 

http://jac.oxfordjournals.org/cgi/reprint/46/suppl_1/41. Accessed on October 10, 2008. 

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KEY ISSUES 

Hospitals will no longer be reimbursed for costs related to adverse events 

and formerly covered by Medicare and health plans. For example, if a 

Medicare patient entered a hospital with pneumonia and developed a 

urinary tract infection during the hospitalization, the hospital would be 

reimbursed approximately $6,254 under the prior payment system 

(pneumonia with complications). Under the new rule, the hospital would 

be reimbursed approximately $3,705 (simple pneumonia), a difference of 

approximately 40 percent.51 However, stakeholders in interviews and also 

CMS52 have estimated that because the revised CMS payment policy 

provides for larger Medicare reimbursements for sicker patients by 

considering complications and comorbidities in determining MS-DRGs, 

hospitals might experience an overall increase in revenue. 

Issue 3: Hospitals rely on staff and managers to report 

adverse events internally, but barriers can inhibit 

reporting

Hospital managers whom we interviewed typically rely on the staff 

involved or department managers to report adverse events to hospital 

quality improvement or risk management departments. Stakeholders 

see routine reporting of adverse events as an important component of 

improving patient safety. Reporting an adverse event is thought to 

create a sense of transparency among providers, regulators, and 

patients, fostering openness, communication, and accountability for 

care. Reporting adverse events and suspected causes can help hospitals 

develop improved practices to prevent recurrence and ensures 

accountability for substandard care. Encouraging open staff reporting 

was cited as part of a growing movement toward a “just culture” that 

emphasizes systems problems over individual blame for mistakes.53 

51 M. B. Rosenthal, “Nonpayment for Performance? Medicare’s New Reimbursement 

Rule,” The New England Journal of Medicine, 357(16), October 18, 2007, pp. 1573–1575. 

Available online at http://content.nejm.org/cgi/reprint/357/16/1573.pdf. Accessed on 

October 10, 2008. 

52 CMS, Office of Public Affairs, Press Release, “CMS Proposes to Expand Program for 

Hospital Inpatient Services in FY 2009,” April 14, 2008. Available online at 

http://www.cms.hhs.gov/apps/media/press/release.asp?Counter=3041&intNumPerPage=10&

checkDate=&checkKey=&srchType=1&numDays=3500&srchOpt=0&srchData=&keywordT

ype=All&chkNewsType=1%2C+2%2C+3%2C+4%2C+5&intPage=&showAll=&pYear=&year

=&desc=false&cboOrder=date. Accessed on October 10, 2008. 

53 R. M. Wachter, “Understanding Patient Safety,” McGraw–Hill, 2008, pp. 175–176. 

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KEY ISSUES 

Hospitals may conduct a root cause analysis (RCA) following a report of 

an adverse event. The RCA is a focused review of systems and 

processes to identify the basic or contributing factors that cause adverse 

events. RCAs vary considerably in depth and detail, with 

documentation and analysis sometimes including interview transcripts, 

medical records, certification surveys, and billing data. Once it is 

complete, the RCA results can be assessed by hospital managers or 

quality improvement staff to help them develop a corrective action plan. 

Hospitals may retain RCAs and corrective action plans internally or 

submit them with supporting documentation to oversight entities. 

Hospital staff whom we interviewed also reported using information 

about adverse events to inform affected patients and family members, 

which is thought to boost public trust and lead to improved clinical 

decisionmaking and compliance in treatment. One study found that 

providers disclosing information and accepting responsibility for 

adverse events was often more important to patients and families than 

receiving financial compensation.54 Some health networks, including 

the Veterans Health Administration, have formalized this effort 

through “rapid response” teams that are required to immediately assess 

adverse event reports, provide same-day information to patients and 

families, and take action to mitigate harm and prevent recurrence.55 

Hospital staff may not report adverse events because they do not believe 

reports lead to improvement, do not have time, or fear punitive action 

Stakeholders, including hospital managers, indicated that hospital staff 

do not report all adverse events, although estimates of how many 

adverse events are not reported vary widely. In interviews, hospital 

managers gave estimates as low as 5 percent of adverse events reported 

to as high as “nearly 100 percent,” attributed to focused training on 

identifying adverse events. Stakeholders reported the following reasons 

20 

54 L. L. Leape, “Full Disclosure and Apology: An Idea Whose Time Has Come,” Physician 

Executive, March–April, 2006, pp. 24–26. Available online at 

http://findarticles.com/p/articles/mi_m0843/is_2_32/ai_n16123939. Accessed on 

October 9, 2008. 

55 Veterans Health Administration, 2007 VHA Research Series, “Rapid Response Teams: 

A Bridge Over Troubled Waters,” 2007. Available online at 

http://www.vha.com/portal/server.pt/gateway/PTARGS_0_2_6781_1052_505725_43/http%3B

/ContentSrv.VHA.com%3B7087/publishedcontent/publish/vha_public/solutions/clinical_impr

ovement/docs/rrt_final.pdf. Accessed on October 10, 2008. 

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KEY ISSUES 

for not reporting in order of prominence (literature referenced provides 

additional discussion):56 57 58 59

• lack of followup by responsible staff when reports are made, 

• lack of time to complete incident reports and documentation, 

• fear of punitive action against self or a colleague, 

• assumption that other involved staff will report, 

• failure to track care as patients move through multiple departments 

and caregivers, and 

• difficulty in distinguishing adverse events from harm caused by 

underlying disease. 

Stakeholders also stressed the importance of hospitals taking action to 

encourage staff to report adverse events through such measures as 

strengthening enforcement, streamlining procedures, training staff on 

reporting procedures, and ensuring confidentiality when possible. 

Allowing anonymous reporting or ensuring confidentiality of reporters 

has been shown to increase reporting, but can limit the usefulness of 

reports because those analyzing the adverse events are not able to 

follow up to clarify the event and possible causes.60 

 

 

21 

 

56 IPRO, “Error Reporting Systems: Feedback and Communication,” Patient Safety 

Tools: Information and Resources on Patient Safety for Health Care Providers Across New 

York State, 1(5), Fall 2007. Available online at 

http://providers.ipro.org/index/ps-newsletter-summer07. Accessed on October 13, 2008. 

57 S. M. Evans, J. G. Berry, B. J. Smith, et al., “Attitudes and Barriers to Incident 

Reporting: A Collaborative Hospital Study,” Quality and Safety in Health Care, 15, 2006, 

pp. 39–43. Abstract available at http://qshc.bmj.com/cgi/content/abstract/15/1/39. Accessed 

on October 13, 2008. 

58 C. Conerly, “Strategies to Increase Reporting of Near Misses and Adverse Events,” 

Journal of Nursing Care Quality, 22(2), April–June 2007, pp. 102–106. 

59 J. A. Taylor, D. Brownstein, D. A. Christakis, et al., “Use of Incident Reports by 

Physicians and Nurses to Document Medical Errors in Pediatric Patients,” Pediatrics, 

114(3), September 2004, pp. 729–735. Available online at 

http://pediatrics.aappublications.org/cgi/reprint/114/3/729. Accessed on October 13, 2008. 

60 J. Stow, “Using Medical Error Reporting to Drive Patient Safety Efforts,” AORN 

Journal: Association of periOperative Registered Nurses, September 2006, pp. 13–17. 

Available online at http://findarticles.com/p/articles/mi_m0FSL/is_3_84/ai_n27000693. 

Accessed on October 13, 2008. 

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_____________________________ 

Issue 4: Hospitals report adverse events to various 

oversight entities, although stakeholders suspect 

substantial underreporting

Although no comprehensive national reporting system for adverse 

events currently exists, various government agencies and other entities 

receive adverse event reports from hospitals. These outside entities 

typically require or request reports about only a subset of adverse 

events, usually the most serious (such as wrong surgery) or those likely 

to affect the broader hospital population (such as infections). For 

example, the quality assurance director of one 102-bed hospital reported 

receiving between 250 and 300 reports of adverse events or near 

misses61 a month from hospital staff, of which only “2 or 3” typically 

meet severity levels requiring a report to the State or accrediting body. 

IOM and other stakeholders advocate a two-tiered national system of 

mandatory reporting of serious adverse events and voluntary reporting 

of less serious adverse events and near misses because both systems 

have unique advantages.62 Mandatory reporting of serious events is 

thought to ensure provider accountability for medical errors and 

substandard care. Voluntary reporting can capture a broader range and 

may uncover underlying problems more readily than a smaller number 

of serious adverse events. Some researchers advocate reporting near 

misses in particular, believing that because a person or system was in 

place to prevent harm, they uncover not only the cause of potential 

adverse events but possible solutions because harm was averted. 

Including a broader range of adverse events, however, can make the 

number of reports unmanageable.63 One State modified its reporting 

system from including all “unusual occurrences that threaten welfare, 

safety, or health” to only the 28 adverse events on the NQF list, 

reporting that the original was “too global” to be administered well.64

22 

61 A near miss is an event or a situation that did not result in patient injury, but only 

because of intervening factors, such as patient health or timely intervention. 

62 L. T. Kohn, J. M. Corrigan, and M. S. Donaldson, eds., “To Err is Human: Building a 

Safer Health System.” A Report of the Committee on Quality of Health Care in America, 

Institute of Medicine, Washington, DC, National Academy Press, 1999. 

63 T. A. Brennan, A. Gawande, E. Thomas, and D. Studdert, “Accidental Deaths, Saved 

Lives and Improved Quality, Sounding Board,” The New England Journal of Medicine, 

353(13), September 29, 2005. Available online at 

http://content.nejm.org/cgi/reprint/353/13/1405.pdf. Accessed on October 10, 2008. 

64 Stakeholder interview with staff of the California Department of Health, January 

2008. 

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State Reporting Systems. Public health departments in 25 States and 

the District of Columbia operate adverse events reporting systems.65 

States may also have systems targeted toward specific events; for 

example, the Government Accountability Office reported in 2008 that 

23 States require mandatory reporting of health care-associated 

infections in hospitals.66 States typically require that adverse events be 

reported within a specific timeframe. They may also require that 

hospitals submit the RCA results along with the adverse event report 

and a corrective action plan that outlines how the hospital plans to 

address the problem. State staff reported using information in a variety 

of ways, including issuing periodic alerts to caution providers about 

specific problems and trends, reporting to the public as a hospital 

quality measure, and routing information about the most egregious 

adverse events to State oversight agencies. 

National Reporting Systems. Two Federal agencies operate national 

reporting systems—CDC and the Food and Drug Administration (FDA) 

—and a variety of accreditation, oversight, and advocacy groups operate 

additional systems. Some of these national reporting systems collect 

information on a full range of adverse events, such as the Joint 

Commission’s Sentinel Event Reporting System and the Veterans 

Health Administration’s Patient Safety Reporting System. Others focus 

on particular types of adverse events. For example, FDA operates 

systems that monitor adverse events associated with drugs, medical 

devices, vaccines, and blood products, and CDC operates a system to 

monitor health care-associated infections and comanages the vaccine 

system with FDA. 

Patient Safety Organizations. The Patient Safety and Quality 

Improvement Act of 2005 (Patient Safety Act) established a national 

network of Patient Safety Organizations (PSO), certified by HHS, to, 

among other tasks, accept voluntary reports of adverse events from 

hospitals.67 Further, HHS must develop common formats that PSOs 

can choose to use for reporting information and must maintain a 

65 OIG analysis of interviews and documentation from all States and the District of 

Columbia, collected January–April, 2008. 

66 Government Accountability Office, “Health-Care-Associated Infections in Hospitals: 

An Overview of State Reporting Programs and Individual Hospital Initiatives to Reduce 

Certain Infections,” September 2008, p. 2. Available online at 

http://www.gao.gov/new.items/d08808.pdf. Accessed on October 10, 2008. 

67 P.L. No. 109-41, § 923 (July 29, 2005). 

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KEY ISSUES 

national database to analyze adverse events reported by PSOs.68 (The 

Patient Safety Act provides Federal legal privilege and confidentiality 

protections for reported information.69) A variety of entities, including 

hospital networks and health plans, are expected to submit applications 

to serve as PSOs in 2009 and to be operational by 2010. AHRQ is 

tasked with reviewing these applications, determining which entities 

will serve as PSOs, and developing operational guidelines (including 

common definitions for adverse events). PSOs will have flexibility in 

developing policies and practices and will receive no Federal funding. 

Some stakeholders expressed concerns regarding PSO implementation, 

including hospitals that may be reluctant to pay contract costs for PSOs 

when many already report to States; analysis of adverse event 

information reported by PSOs may be difficult because the PSOs are not 

required to use the common formats for defining adverse events; and 

hospitals may report the same adverse events to multiple PSOs, causing 

duplicate reports that could skew aggregated data. 

Stakeholders indicate that adverse events are underreported and that 

oversight entities may not have mechanisms to promote compliance 

Stakeholders suspect substantial underreporting of adverse events to 

outside entities, although it is difficult to know the extent to which 

adverse events go unreported. Underreporting could result from the 

range of barriers and disincentives to report and the inherent difficulty 

in recognizing all adverse events, such as those resulting in only 

temporary harm to the patient. Stakeholders question whether the 

value of reporting systems is worth the administrative costs, 

particularly when the entity that receives reports does not reciprocate 

by providing information for improving quality of care. 

The number of reports received by various oversight entities varies 

substantially. For example, States reported that they received as few as 

6 and as many as 16,000 reports in 2006.70 One State that collects 

reports for events on the NQF list of Serious Reportable Events received 

125 reports for approximately 2.8 million patient days between 

24 

68 PSO regulations were developed jointly by AHRQ and the Office of Civil Rights. 

Proposed regulations were published February 12, 2008, (73 Fed. Reg. 8112) and are 

expected to be final by early 2009. 

69 P.L. No. 109-41, § 922 (July 29, 2005). 

70 OIG analysis of interviews and documentation from all States and the District of 

Columbia, collected January–April 2008. 

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October 2006 and October 2007.71 National reporting systems also 

indicate a wide range in the number of reports that they receive from 

hospitals. For example, an FDA source estimated that 10 percent of 

adverse drug events are reported to its reporting system, Medwatch, 

and also expressed concern that many reports are of “poor quality”—

incomplete and poorly documented.72 Officials at the Joint Commission 

estimate that its voluntary Sentinel Event Reporting System captures 

only “1/10th of 1 percent” of sentinel events that occur in accredited 

hospitals.73 

Detailed and duplicative reporting requirements may also lead to 

underreporting. Hospitals are often required to report adverse events—

sometimes the same event—to several different entities, which hospital 

staff indicated takes considerable staff time and effort. For example, in 

one State, a single adverse event involving a medication error may 

require reporting to eight different entities, each with different 

reporting mechanisms and standards. Further, some oversight entities 

require substantial information for each reported event, such as an 

RCA, a corrective action plan, staff surveys, and medical records. 

Stakeholders raised concern that even prominent oversight entities 

have limited ability to ensure that serious adverse events are reported 

consistently and accurately. This was thought to be in part because 

several key reporting systems have only voluntary reporting, and also 

because there may be subjectivity in determining what conditions are 

reported. Even when reporting is mandatory, systems may have little 

active oversight and enforcement. Hospitals can have few incentives to 

report adverse events, particularly when reporting involves risks of 

disclosure and punitive action.74 Stakeholders indicated that oversight 

entities do not know the extent of underreporting, so they cannot 

25 

71 Minnesota Department of Health, “Adverse Health Events in Minnesota: Fourth 

Annual Public Report,” January 2008, p. 9. Available online at 

http://www.health.state.mn.us/patientsafety/ae/aereport0108.pdf. Accessed on July 3, 2008. 

72 Board on Health Sciences Policy, “Adverse Drug Event Reporting: The Roles of 

Consumers and Health-Care Professionals,” 2007. Available online at 

http://books.nap.edu/openbook.php?record_id=11897&page=14. Accessed on 

October 10, 2008. 

73 Stakeholder interviews with staff of the Joint Commission, March and 

September 2007. 

74 J. S. Weissman, C. L. Annas, A. M. Epstein, et al., “Error Reporting and Disclosure 

Systems: Views from Hospital Leaders,” the Journal of the American Medical Association, 

293(11), March 16, 2005, pp. 1359–1366. Abstract available online at http://jama.amaassn.org/cgi/content/abstract/293/11/1359. Accessed on October 13, 2008. 

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determine whether analysis of reported information is an accurate 

characterization of adverse events. 

Many researchers indicated that full reporting of all adverse events may 

be less useful than receiving detailed reports of fewer adverse events 

Many stakeholders conducting research in adverse events assert that it 

is more important for quality improvement to receive detailed 

information about reported adverse events, such as the results of RCAs, 

than to ensure reporting of all adverse events. These researchers 

maintained that counting particular adverse events is not as critical as 

the underlying problems within hospital processes that resulted in the 

specific events. Because of underreporting, the number of reported 

adverse events is not considered to be a reliable measure of the incidence 

of adverse events in hospitals. Researchers note that counting types of 

adverse events can contribute to faulty analysis of problems because it 

does not concentrate on the underlying systems or actions, which they 

view as more important to the goal of reducing adverse events. For 

example, two medication errors might be counted together for a study of 

incidence, although one is caused by poor product labeling and the other 

by poor communication between nurses and pharmacists. 

 

_____________________________ 

Issue 5: Public disclosure of adverse events can benefit 

patients, but also raises legal concerns for patients and 

providers 

Much debate goes on regarding disclosure of adverse event information 

to affected patients and families, oversight entities, and the public. 

Hospital disclosure of adverse event information can be highly beneficial 

and is viewed by many stakeholders as an ethical obligation among 

health care providers. However, disclosure can have legal ramifications 

for both patients and providers. 

Disclosure of adverse event information can assist patients in making 

decisions about care and pressure hospitals to improve patient safety 

Stakeholders indicated that public disclosure of adverse events by 

hospitals or oversight entities can provide benefits to patients. Access 

to event information may allow patients to make informed decisions 

about treatment, and may also provide public scrutiny that could 

pressure hospitals to improve prevention practices. IOM has promoted 

public disclosure as a principal goal of adverse event reporting, 

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KEY ISSUES 

particularly for the most serious adverse events.75 Most State reporting 

systems have traditionally released adverse event data received from 

hospitals, although in aggregate and deidentified form.76 At least one 

State provides a searchable Internet database that displays reported 

adverse events for individual hospitals.77 

Hospitals, clinicians, and patients can lose legal protections when 

adverse event information is reported outside the hospital 

Stakeholders indicated that legal liability can impose constraints on 

disclosure of adverse event information to outside reporting entities. 

In-hospital systems are typically subject to State legal provisions, 

known as peer review protections, which protect information shared 

within hospitals for quality improvement purposes. This could include, 

for example, information disclosed in an adverse event report or 

discussed in meetings among hospital physicians and staff. 

However, this protection may be lost if information is transmitted 

outside an individual hospital. Some outside systems allow for 

anonymous reporting to reduce the implication of individuals, but 

according to one stakeholder serving as a risk manager in a large urban 

hospital, this protection may not be useful if the event was serious and 

well-known. Other reporting systems do not purport to maintain 

confidentiality, other than protecting the identity of patients, and in 

some cases publicly disclose adverse events. Hospitals potentially 

report information to many entities, such as professional licensing and 

accrediting bodies, State health departments, and patients and families. 

This disclosure to many entities, which one stakeholder called a 

“leaking sieve” of information, can increase the likelihood that 

individual cases are known and result in loss of patient 

confidentiality.78 

27 

75 L. T. Kohn, J. M. Corrigan, and M. S. Donaldson, eds., “To Err is Human: Building a 

Safer Health System.” A Report of the Committee on Quality of Health Care in America, 

Institute of Medicine, Washington, DC, National Academy Press, 1999. 

76 M. Marchev, “Medical Malpractice and Medical Error Disclosure: Balancing Facts and 

Fears,” National Academy for State Health Policy, December 2003, p. 10. Available online 

at http://www.nashp.org/Files/Medical_Malpractice_and_Medical_Error_Disclosure.pdf. 

Accessed on October 9, 2008. 

77 Adverse Health Events Reporting, Minnesota Department of Health, Database. 

Available online at http://www.health.state.mn.us/patientsafety/adverseselect.cfm. 

Accessed on October 9, 2008. 

78 Proposed PSO regulations at 73 Fed. Reg. 8112 (Feb. 12, 2008) would require that 

information reported to PSOs by providers receive significant legal protections through both 

legal privilege and confidentiality requirements. 

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Issue 6: Information to help prevent adverse events is 

widely available, but some hospitals and clinicians may 

be slow to adopt or routinely apply recommended 

practices

Information about methods to improve patient safety is considered 

readily accessible to clinicians and hospitals because of the efforts of 

active professional associations and government and private entities to 

improve health care quality. There is substantial debate about which 

adverse events are considered preventable, but little question that the 

use of recommended guidelines can improve patient safety. Current 

policy and practice, including CMS’s nonpayment policy, hold hospitals 

accountable for conditions that “could be reasonably prevented by using 

readily available evidence-based guidelines.”79 Still, studies indicate 

that hospitals and clinicians may be slow to implement or to fully 

integrate recommended practices (such as evidence-based clinical 

practice guidelines). 

Strategies and guidelines to help prevent adverse events often focus on 

improving complex hospital systems and processes 

Patient safety research shows that some adverse events can be the 

result of breakdowns in systems as well as individual human error.80 

The systems approach to improving patient safety emphasizes the 

interaction between medical systems (e.g., protocols, devices, and 

infrastructure) and individual practitioners. A systems approach 

advocates both improving the tools at the disposal of health care 

providers, such as by automating health records, providing clear 

medication labels, and creating checks to catch problems or errors 

before they cause harm. (This approach aligns with the idea introduced 

previously of a “just culture,” aspiring to full disclosure of adverse 

events by focusing on systemic issues rather than individual blame.) 

The underpinning of this system approach is recognition of the 

complexity of modern health care and the difficulty even for highly 

trained clinicians of considering all information. For example, one 

article describes a study that found patients in an intensive care unit 

79 DRA, § 5001(c), P.L. No. 109-171 (adding Social Security Act, § 1886(d)(4)(D)), 

provided for a quality adjustment in DRG payments for certain hospital-acquired 

conditions. 

80 R. M. Wachter, “Understanding Patient Safety,” McGraw–Hill, 2008, pp. 17–26. 

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KEY ISSUES 

required an average of 178 different actions per day.81 As one clinician 

points out, the number of potential mistakes is so high and the potential 

impact is so great that “even a 99.9 percent level of proficiency may not 

be adequate” to ensure patient safety. Stakeholders and literature gave 

examples of positive results from the systems approach, particularly 

when efforts addressed specific needs. For example, anesthesiologists 

nationally have reduced the number of adverse events associated with 

administration of anesthesia by targeting and addressing systems 

breakdowns,82 and the Veterans Health Administration has reduced 

medication errors by as much as 86 percent by adopting medication 

barcoding.83 

Following recommended guidelines, which are readily accessible to 

hospitals and clinicians, can help prevent adverse events and improve 

quality of care 

As the issue of patient safety has gained prominence, a number of 

entities have targeted clinical solutions and recommended practices to 

improve safety and reduce the occurrence of certain adverse events. 

National entities have launched substantial patient safety efforts that 

focus on this technical assistance, including the following: 

• IOM identified 20 diseases and clinical conditions that may be 

significantly improved or effectively managed by using best practice 

treatment guidelines.84 

29 

81 A. Gawande, “Annals of Medicine: The Checklist,” The New Yorker, 83, 

December 10, 2007, pp. 86–95. Available online at 

http://www.newyorker.com/reporting/2007/12/10/071210fa_fact_gawande?printable=true. 

Accessed on October 10, 2008. 

82 D. M. Gaba, “Anaesthesiology as a Model for Patient Safety in Health Care,” BMJ, 

March 18, 2000, 320, pp. 785–788. Available online at 

http://www.bmj.com/cgi/content/full/320/7237/785. Accessed on October 20, 2008. 

J. B. Cooper, “An Analysis of Major Errors and Equipment Failures in Anesthesia 

Management: Considerations for Prevention and Detection.” Abstract available online at 

http://www.ncbi.nlm.nih.gov/pubmed/6691595. Accessed on October 20, 2008. 

83 M. Glabman, “Health Plans Can Learn from VHA Turnaround: While Plans, 

Hospitals, and Physician Groups Talk the Talk, the Veterans Health Administration is 

Walking the Walk,” Managed Care Magazine, 16(2), February 2007, pp. 26–29, 34–36, and 

38. Available online at 

http://www.managedcaremag.com/archives/0702/0702.veterans.html. Accessed on 

August 28, 2008. 

84 K. Adams and J. M. Corrigan, eds., Committee on Identifying Priority Areas for 

Quality Improvement, “Priority Areas for National Action: Transforming Health Care 

Quality,” Institute of Medicine, Washington, DC, 2003. Available online at 

http://www.ahrq.gov/qual/iompriorities.htm. Accessed on October 13, 2008. 

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KEY ISSUES 

• A patient safety advocacy group began providing free onsite 

assistance to hospitals launching safety interventions, including 

clinician assistance and analysis of results.85 

• AHRQ released 17 Patient Safety Toolkits that are publicly 

available and are designed to help practitioners, hospital managers, 

and patients reduce certain adverse events.86 

Evidence-based clinical practice guidelines, generated by systematic and 

evidentiary research, have been shown to be highly effective in preventing 

certain adverse events, particularly in the area of infection control. 

Statutory criteria for CMS selection of categories of hospital-acquired 

conditions for which hospitals would not be paid for more expensive DRGs 

include the provision that the conditions be reasonably preventable using 

readily available evidence-based guidelines.87 In many cases, such 

practices are straightforward and can be implemented with little or no 

cost. For example, a study of hospital intensive care units found that 

using a checklist of safety steps when inserting central line catheters, 

including draping patients’ entire bodies instead of only affected areas, 

reduced the incidence of line infections nearly to zero, preventing an 

estimated 43 infections, and eight deaths, and saving nearly $2 million per 

hospital.88 

Some hospitals and clinicians can be slow to adopt or routinely apply 

recommended practices to prevent certain adverse events 

A number of studies indicate that hospital implementation of 

recommended practices can be slow and that not all guidelines are 

practiced widely. For example, one study found that an average of 

17 years is needed before new knowledge generated through research 

becomes incorporated into widespread clinical practice.89 Further 

30 

85 Institute for Healthcare Improvement, “Overview of the Five Million Lives Campaign,” 

2006. Available online at 

http://www.ihi.org/IHI/Programs/Campaign/Campaign.htm?TabId=1. Accessed on 

August 28, 2008. 

86 AHRQ, Patient Safety Tools: Improving Safety at the Point of Care. Program Brief. 

AHRQ Publication No. 08-P006, revised April 2008. Available online at 

http://www.ahrq.gov/qual/pips/pstoolsbrf.htm. Accessed on September 8, 2008. 

87 DRA, P.L. No. 109-171 § 5001(c), amends the Social Security Act, § 1886(d)(4). 

88 S. M. Berenholtz, P. J. Pronovost, P. A. Lipsett, et al., “Eliminating Catheter-Related 

Bloodstream Infections in the Intensive Care Unit,” Critical Care Medicine, 32(10), 

October 2006, pp. 2014–2020. Abstract available online at 

http://www.ncbi.nlm.nih.gov/pubmed/15483409. Accessed on October 10, 2008. 

89 AHRQ, “Closing the Quality Gap: A Critical Analysis of Quality Improvement 

Strategies Fact Sheet,” AHRQ Publication No. 04-P014, March 2004. Available online at 

http://www.ahrq.gov/clinic/epc/qgapfact.htm. Accessed on August 28, 2008. 

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KEY ISSUES 

research indicates that a large number of hospitals do not routinely 

practice all patient safety precautions. As recently as 2001, AHRQ 

reported that a sample of hospitals did not routinely perform the 

11 interventions that researchers deemed most critical to improving 

patient safety, such as administering antibiotics prior to surgery.90 

Additionally, a survey of 1,256 hospitals in 2007 indicated that only 

25 percent followed all 27 safe practices guidelines established by NQF 

and only 13 percent followed all guidelines related to preventing 

common infections.91 Moreover, studies have shown that clinicians 

often do not comply with some of the most fundamental patient safety 

measures; one study found that hospital physicians wash their hands 

about half as often as is recommended while providing care.92 

31 

One explanation for slow adoption of recommended guidelines is that 

some hospitals and clinicians may perceive guidelines as not being 

practical in the “real world.” For example, although surgical units 

might count the number of sponges used during surgery to ensure that 

none is retained, in the case of an injured patient, ambulance and 

emergency room staff may employ an unknown number of sponges in 

stabilizing the patient prior to surgery. Hospitals may also lack the 

infrastructure to implement new strategies, particularly if the strategy 

requires new technology. Further, patient safety provisions may have 

countervailing implications, as in the example of limiting resident work 

hours. Accreditation bodies set standards in 2003 to limit medical 

residents’ hours to 80 per week to combat fatigue,93 but one study found 

90 AHRQ, “Making Health Care Safe: A Critical Analysis of Patient Safety Practices,” 

Chapter 57: Practices Rated by Strength of Evidence, 2001. Available online at 

http://www.ahrq.gov/clinic/ptsafety/. Accessed on August 28, 2008. 

91 The Leapfrog Group, “41 Hospitals are Designated ‘Leapfrog Top Hospitals’ for 2007, 

Significant Gaps in Safety and Quality Practices Among Other Hospitals Still the Norm,” 

September 18, 2007. Available online at 

http://www.leapfroggroup.org/media/file/Release_2007_Leapfrog_Survey_and_Top_Hospital

s_9-18.pdf. Accessed on October 10, 2008. The Leapfrog Group, “87 Percent of U.S. 

Hospitals Do Not Take Recommended Steps to Prevent Avoidable Infections,” 

September 10, 2007. Available online at 

http://www.leapfroggroup.org/media/file/Leapfrog_hospital_acquired_infections_release.pdf. 

Accessed on October 10, 2008. 

92 D. Pittet, A. Simon, S. Hugonnet, C. L. Pessoa-Silva, and V. Sauvan, “Hand Hygiene 

Among Physicians: Performance, Beliefs, and Perceptions,” Annals of Internal Medicine, 

141(1), July 6, 2004, pp. 1–8. Available online at 

http://www.annals.org/cgi/reprint/141/1/1.pdf. Accessed on October 9, 2008. 

93 Accreditation Council for Graduate Medical Education, Common Program 

Requirements, Chapter VI: “Resident Duty Hours in the Learning and Working 

Environment,” updated February 2007, effective July 1, 2007. Available online at 

http://www.acgme.org/acWebsite/dutyhours/dh_ComProgrRequirmentsDutyHours0707.pdf. 

Accessed on October 9, 2008. 

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KEY ISSUES 

that clinicians perceive limiting shift lengths can cause a greater 

incidence of medical errors resulting from loss of continuity in care.94 

Studies also indicate that clinicians may also be slow to incorporate 

lessons from their own experiences, treating adverse events as isolated 

incidents and arguing that individual practitioner ingenuity is more 

important than regimented standards of care.95 Researchers explain 

that these clinicians may also believe that systems improvements, such 

as computerized decision support systems, can suppress the knowledge, 

experience, and judgment of the practitioner. Adding to this, physicians 

are usually independent of the hospital and may not have to meet 

hospital training or operational standards. 

____________________________ 

Issue 7: Interviews and literature reveal strategies that 

may accelerate progress in reducing the incidence of 

adverse events in hospitals 

Stakeholders described the current environment among hospitals and 

policymakers as being on the verge of accelerating progress and 

indicated that with continued focus, hospitals can reduce the overall 

incidence of adverse events and improve quality of care. Information 

from interviews and literature suggests the following strategies: 

• Assessing the desirability and feasibility of a national body to lead 

patient safety efforts. This could entail evaluating the impact of 

involved organizations and determining what tasks a national 

coordinating body might perform. Stakeholders described adverse 

events as “a public health issue” that demands an aggressive agenda 

and active policy enforcement. They indicated that current efforts 

32 

94 J. S. Myers, L. M. Bellini, J. B. Morris, et al., “Internal Medicine and General Surgery 

Residents’ Attitudes About the ACGME Duty Hour Regulations: A Multi-Center Study, “ 

Academic Medicine, 81(12), December 2006, pp. 1017–1020. Available online at 

http://www.academicmedicine.org/pt/re/acmed/pdfhandler.00001888-200612000-

00008.pdf;jsessionid=LyBMNyx0pk10K8sRJs2DmTQD5DPJRQXSnjtJrS7yrGmdv7LKhXgl!

475884353!181195629!8091!-1. Accessed on October 9, 2008. 

95 F. B. Garfield and J. M. Garfield, “Clinical Judgment and Clinical Practice 

Guidelines,” International Journal of Technology Assessment in Health Care, 16, 2000, 

pp. 1050–1060. Abstract available online at 

http://www.ncbi.nlm.nih.gov/pubmed/11155827. Accessed on October 13, 2008. 

S. J. Genuis, “The Proliferation of Clinical Practice Guidelines: Professional Development 

or Medicine-by-Numbers,” Journal of the American Board of Family Medicine, 18(5), 

September–October 2005, pp. 419–425. Available online at 

http://www.jabfm.org/cgi/reprint/18/5/419. Accessed on October 13, 2008. 

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KEY ISSUES 

by government agencies and private entities are necessary and 

useful but may not be sufficient to ensure patient safety; and that a 

national body could coordinate, but not replace, these efforts. 

• Focusing on hospital use of recommended practices and 

evidence-based clinical practice guidelines to reduce the incidence of 

adverse events, including further promulgating these practices, 

measuring hospital use, and improving information sharing. 

• Establishing methods for measuring the incidence of adverse events, 

including a practical and accurate data collection method for routine 

measurement. 

• Expanding the use of electronic health records within and among 

hospitals and other health care settings. Stakeholders reported that 

widespread use of electronic health records would enhance 

communication, improving continuity of care and potentially 

reducing the incidence of adverse events. 

• Monitoring and analyzing the impact of policies to deny hospitals 

higher payment for admissions complicated by selected adverse 

events, including hospital and payer implementation, the incidence 

of adverse events, access to health care, and health care costs. 

• Improving the utility of adverse event reporting to outside entities, 

including evaluating the comparability of data reported across 

entities and streamlining reporting mechanisms to reduce burdens 

to hospitals. 

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Δ SUMMARY 

Our interviews with stakeholders and review of literature indicate that 

the incidence of adverse events poses a problem in hospitals, 

particularly among the elderly. A number of barriers exist to reducing 

the incidence of adverse events, including confusion over how adverse 

events are defined and identified, underreporting of events, and legal 

concerns regarding the disclosure of events. Further, challenges 

associated with accurately measuring the incidence of adverse events 

make it difficult to assess progress and to direct future research and 

policy efforts. 

The extensive range of entities involved in researching and addressing 

adverse events indicates that solving the problem is a high priority for 

policymakers, patients, and providers. Stakeholders described the 

current environment among hospitals and policymakers as being on the 

threshold of accelerated progress and said that with continued focus, 

hospitals can reduce the incidence of adverse events and improve 

quality of care. They point to a large body of clinical and policy research 

that has improved the understanding of adverse events, including 

recognition of the critical role of hospital systems in guarding against 

them. Additionally, new policies, such as nonpayment for care 

associated with adverse events and public disclosure of events, 

strengthen hospitals’ incentives to develop safer practices. These 

advancements in clinical understanding, combined with heightened 

controls, hold promise for reducing the incidence of adverse events in 

hospitals and improving the quality of care. 

This overview of key issues is one of a series of OIG reports designed to 

respond to the congressional mandate to inform Congress about policies 

and practices critical to addressing adverse events. Other OIG studies 

focus on estimating the incidence of adverse events among Medicare 

beneficiaries, State efforts to operate adverse event reporting systems, 

Medicare beneficiaries receiving potentially inappropriate drug pairs 

that may reflect medication errors, and hospital actions to address and 

prevent adverse events. 

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Δ AGENCY COMMENTS 

We received comments on a draft of this report from AHRQ and CMS. 

AHRQ concurred with the report’s findings. 

CMS commended OIG on succinctly capturing the numerous issues 

surrounding this complex topic, acknowledged technical assistance 

provided to OIG in conducting this study, and indicated that it 

welcomed continued work with OIG on this issue. 

CMS reiterated its policies to encourage the prevention of adverse 

events that are enumerated in the report, including quality 

measurement and reporting, financial initiatives, and program 

oversight. Regarding financial incentives, CMS outlined the provision 

to deny payment for care associated with hospital-acquired conditions, 

noting that OIG’s work is supportive of and will enable more effective 

CMS implementation of the provision. CMS agreed with the report’s 

conclusion that nonpayment for care associated with adverse events 

strengthens hospitals’ incentives to develop safety practices and reduces 

health care costs in the long term. 

CMS also addressed the three potential drawbacks of nonpayment 

policies raised by stakeholders: limiting access to care, increasing 

hospital costs, and changes in hospital revenue. CMS indicated that it 

will monitor the impact of implementation of the nonpayment provision 

but believes that these drawbacks are unlikely to occur. CMS provided 

further discussion to support this viewpoint, stating that more precise 

payment for high-risk patients will likely offset incentives to limit 

access to care, increased hospital costs to implement safety provisions 

will likely be offset by savings resulting from fewer complications, and 

decreases in hospital revenue will likely be minimal because CMS will 

continue to assign a discharge to a higher paying MS-DRG if the 

selected hospital-acquired condition is present on admission. 

For the full text of AHRQ and CMS comments, see Appendix G. 

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Δ APPENDIX ~ A 

TAX RELIEF AND HEALTH CARE ACT OF 200696

P.L. No. 109-432 

DIVISION B – MEDICARE AND OTHER HEALTH PROVISIONS 

TITLE II—MEDICARE BENEFICIARY PROTECTIONS

SEC 203 OIG STUDY OF NEVER EVENTS 

(a) Study.— 

(1) In general.—The Inspector General in the Department of Health and Human 

Services shall conduct a study on— 

(A) incidences of never events for Medicare beneficiaries, including types of such 

events and payments by any party for such events; 

(B) the extent to which the Medicare program paid, denied payment, or recouped 

payment for services furnished in connection with such events and the extent to 

which beneficiaries paid for such services; and 

(C) the administrative processes of the Centers for Medicare & Medicaid Services 

to detect such events and to deny or recoup payments for services furnished in 

connection with such an event. 

(2) Conduct of study.—In conducting the study under paragraph (1), the 

Inspector General— 

(A) shall audit a representative sample of claims and medical records of Medicare 

beneficiaries to identify never events and any payment (or recouping of payment) 

for services furnished in connection with such events; 

(B) may request access to such claims and records from any Medicare contractor; 

and 

(C) shall not release individually identifiable information or facility-specific 

information. 

(b) Report.—Not later than 2 years after the date of the enactment of this Act, the 

Inspector General shall submit a report to Congress on the study conducted 

under this section. Such report shall include recommendations for such 

36 

96 Tax Relief and Health Care Act of 2006, P.L. No. 109-432, Division B, Title II, § 203, 

December 16, 2007. 

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APPENDIX ~ A 

legislation and administrative action, such as a noncoverage policy or denial of 

payments, as the Inspector General determines appropriate, including— 

(1) recommendations on processes to identify never events and to deny or recoup 

payments for services furnished in connection with such events; and 

(2) a recommendation on a potential process (or processes) for public disclosure of 

never events which— 

(A) will ensure protection of patient privacy; and 

(B) will permit the use of the disclosed information for a root cause analysis to 

inform the public and the medical community about safety issues involved. 

(c) Funding.— Out of any funds in the Treasury not otherwise appropriated, 

there are appropriated to the Inspector General of the Department of Health and 

Human Services $3,000,000 to carry out this section, to be available until 

January 1, 2010. 

(d) Never Events Defined.—For purposes of this section, the term “never event” 

means an event that is listed and endorsed as a serious reportable event by the 

National Quality Forum as of November 16, 2006. 

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Δ APPENDIX ~ B 

GLOSSARY OF SELECTED TERMS97

Adverse event—Any harm (injury or illness) caused by medical care. Identifying 

adverse events indicates that the care resulted in an undesirable clinical outcome 

and that the clinical outcome was not caused by an underlying disease, but does 

not imply an error, negligence, or poor quality care. 

Corrective action plan—Policy and procedural actions that hospitals prepare to 

respond to an adverse event and to prevent recurrence. 

Evidence-based clinical practice guidelines—Practices found to increase patient 

safety and improve care, generated by systematic and evidentiary research. 

Hospital-acquired condition—Medical condition not present prior to admission to 

a hospital. 

Just culture—An environment in which personnel feel comfortable disclosing 

errors (including their own) while maintaining professional accountability; 

purports that individuals should not be held responsible for systems breakdowns. 

Medical error—The failure of a planned action to be completed as intended or the 

use of a wrong plan to achieve an aim. 

Near miss—An event or a situation that did not produce patient harm, but only 

because of intervening factors, such as patient health or timely intervention. 

Never event—An event or a situation that should never occur in a health care 

setting. The National Quality Forum initially used the term “never events” to 

describe its list of serious events but began in 2005 to refer to the list as “serious 

reportable events.” 

Patient safety—Freedom from accidental or preventable injuries caused by 

medical care. 

Root cause analysis—A focused review of systems and processes to identify the 

basic or contributing factors that cause adverse events. 

Systems approach—Theory that most errors reflect predictable human failings in 

the context of poorly designed systems. 

38 

97 Definitions derived from a variety of sources, including L. T. Kohn, J. M. Corrigan, 

and M. S. Donaldson, eds, “To Err is Human: Building a Safer Health System.” A Report of 

the Committee on Quality of Health Care in America, Institute of Medicine, Washington, 

DC, National Academy Press, 1999; R. M. Wachter, “Understanding Patient Safety,” 

McGraw–Hill, 2008; and the glossary of the Agency for Healthcare Research and Quality 

Patient Safety Network. Available online at http://www.psnet.ahrq.gov/glossary.aspx. 

Accessed on October 10, 2008. 

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Δ APPENDIX ~ C 

National Quality Forum Serious Reportable Events98

The National Quality Forum (NQF) list is separated into six categories. 

“Serious disability” is defined as loss of a body part, disability, or loss of bodily 

function lasting more than 7 days or still present at time of discharge. 

Table C1: The National Quality Forum List of Serious Reportable Events 

Surgical Events 

A. Surgery performed on the wrong body part 

B. Surgery performed on the wrong patient 

C. Wrong surgical procedure performed on a patient 

D. Unintended retention of foreign object in a patient after surgery or procedure 

E. Intraoperative or immediately postoperative death 

Product or Device Events 

A. Patient death or serious disability associated with the use of contaminated drugs, devices, or biologics provided by the health care facility 

B. Patient death or serious disability associated with use or function of a device in patient care in which the device is used or functions other than as 

intended 

C. Patient death or serious disability associated with intravascular air embolism that occurs while being cared for in a health care facility 

Patient Protection Events 

A. Infant discharged to the wrong person 

B. Patient death or serious disability associated with patient elopement 

C. Patient suicide, or attempted suicide resulting in serious disability while being cared for in a health care facility 

Care Management Events 

A. Patient death or serious disability associated with a medication error 

B. Patient death or serious disability associated with a hemolytic reaction due to administration of ABO/HLA-incompatible blood or blood products 

C. Maternal death or serious disability associated with labor or delivery in a low-risk pregnancy while being cared for in a health care facility 

D. Patient death or serious disability associated with hypoglycemia, the onset of which occurs while patient is cared for in a health care facility 

E. Death or serious disability associated with failure to identify and treat hyperbilirubinemia in neonates 

F. Stage 3 or 4 pressure ulcers acquired after admission to a health care facility 

G. Patient death or serious disability due to spinal manipulative therapy 

H. Artificial insemination with the wrong donor sperm or wrong egg 

Environmental Events 

A. Patient death or serious disability associated with an electric shock while being cared for in a health care facility 

B. Any incident in which a line designated for oxygen or other gas to be delivered to a patient contains the wrong gas or is contaminated by toxic 

substances 

C. Patient death or serious disability associated with a burn incurred from any source while being cared for in a health care facility 

D. Patient death or serious disability associated with fall while cared for in a health care facility 

E. Patient death or serious disability associated with the use of restraints or bedrails while being cared for in a health care facility 

Criminal Events 

A. Care provided by someone impersonating a health care provider 

B. Abduction of a patient of any age 

C. Sexual assault on a patient within or on the grounds of a health care facility 

D. Death or significant injury resulting from a physical assault that occurs within or on the grounds of the facility 

98 NQF, “Serious Reportable Events in Healthcare 2006 Update: A Consensus Report,” 

NQF, Washington, DC, 2007, p. 7. Available online at 

http://www.qualityforum.org/pdf/reports/sre/txsrepublic.pdf. Accessed on October 10, 2008. 

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INTRODUCTION 

List of Stakeholders Interviewed 

We identified stakeholders using a variety of sources, including referrals from AHRQ, 

the National Patient Safety Foundation, the Joint Commission, and others, as well as 

contacts references in literature. The viewpoints of the individuals we interviewed do 

not represent official positions of their organizations.

Table D1–List of Stakeholder Interview Respondents 

Federal Agencies 

Agency for Healthcare Research and Quality (AHRQ), Center for Quality Improvement & Patient Safety (C-QUIPS) 

Centers for Medicare & Medicaid Services (CMS), Medicare Management Services 

Centers for Medicare & Medicaid Services (CMS), Quality Improvement Group 

Centers for Disease Control and Prevention (CDC) 

Department of Defense, Patient Safety Center (DOD) 

Food and Drug Administration (FDA) 

National Institutes of Health (NIH) 

Veterans Affairs (VA), National Center for Patient Safety (NCPS) 

State Agencies

California Department of Health 

Georgia Department of Health and Human Services 

Minnesota Department of Social Services 

Pennsylvania Department of Health 

Professional Associations

American Medical Association (AMA) 

American Hospital Association (AHA) 

American Health Lawyers Association (AHLA) 

American Health Quality Association (AHQA) 

American Nurses Association (ANA) 

Anesthesia Patient Safety Foundation (APSF) 

American Society for Healthcare Risk Management (ASHRM) 

American Society of Health-System Pharmacists (ASHP) 

Georgia Hospital Association: Partnership for Health and Accountability (PHA) 

Minnesota Hospital Association (MHA) 

Oversight/Standard-Setting Organizations

Federation of State Medical Boards of the U.S., Inc. (FSMB)

Leapfrog Group for Patient Safety

The Joint Commission

National Committee on Quality Assurance (NCQA) 

U.S. Pharmacopeia (USP)

Δ APPENDIX ~ D 
 APPENDIX ~ D 

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Table D1–List of Stakeholder Interview Respondents (continued)

Patient Safety Advocacy Groups 

American Association of Retired Persons (AARP) 

Center for Medical Consumers 

Consumers Advancing Patient Safety (CAPS) 

Consumers Union 

Mothers Against Medical Errors (MAME) 

Partnership for Patient Safety 

Persons United Limiting Substandard Care and Errors in Healthcare (PULSE) 

Public Policy Groups

Institute for Healthcare Improvement (IHI) 

Institute of Medicine (IOM) 

Massachusetts Coalition for the Prevention of Medical Errors 

National Academy for State Health Policy (NASHP) 

National Association for Healthcare Quality (NAHQ) 

National Patient Safety Foundation (NPSF) 

National Quality Forum (NQF) 

Urban Institute 

World Health Organization (WHO) 

Private Payers 

Managed Care Organizations—4 selected national and regional organizations 

Providers

Hospitals—20 selected hospitals in CA, FL, GA, KS, IL, MA, MN, NY, and PA 

Networks—8 selected organizations 

Researchers associated with the following organizations 

Columbia University—National Heart, Lung and Blood Institute (MERS – TH) 

Harvard School of Public Health 

Johns Hopkins University 

University of California—San Francisco 

University of Chicago 

Service Contractors 

Cardinal Health, Inc. 

CRG Medical, Inc., Patient Safety Quality Management Solutions 

Emergency Care Research Institute (ECRI), Inc. 

Qualidigm, Inc. 

University HealthSystem Consortium, Patient Safety Net (UHC/PSN) 

Source: Office of Inspector General data collection, October 2007–April 2008.
 

 

Δ APPENDIX ~ E 

Examples of Data Analysis: Stakeholder Interviews and Literature 

Review 

Summary statements represent the predominant viewpoint of the 78 stakeholder 

entities that we interviewed as well as analysis from literature. The text of the 

report does not include the proportion of sources that contributed to summary 

statements for three reasons: 

• Interview respondents represent a wide variety of entities and interests that 

are not easily grouped to provide a sum of responses. For example, entities 

included group interviews with representatives from large national 

organizations as well as individual interviews with hospital staff and 

researchers. 

• Interviews and literature often entailed nuanced discussions of complex 

issues, and analysis of the resulting data could not be accurately quantified. 

In these cases, the report summarizes the range of viewpoints and provides 

relevant examples. 

• Not all interview respondents chose to or were able to answer each question, 

changing the number of potential responses throughout the report. For 

example:

o Ten interview respondents declined to respond regarding whether the 

current incidence of adverse events remains at the level reported by the 

Institute of Medicine (IOM), indicating that it would not be useful for 

them to speculate and that they were unaware of any accurate 

measurement.

o The Centers for Medicare & Medicaid Services nonpayment policy was 

finalized only 2 months prior to our data collection period, and 

representatives from 11 entities declined to respond because they did not 

believe they were adequately informed to state an opinion.

o In some cases, interview respondents provided information and insight 

based on the occurrence of adverse events in all health care settings as 

opposed to only the hospital setting. 

Table E1 on page 42 includes examples of our analysis of interviews and 

literature to arrive at summary statements. Although the frequencies represent 

the general opinions of the interview respondents, further related discussion 

often provided additional insight. The report presented this additional insight 

when it represented a prominent alternative view or otherwise aided 

understanding. 

 

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 APPENDIX E 

Table E1. Data Analysis of Stakeholder Interviews and Literature Review 

Summary Statements Page Interview Questions Interview Responses 

Stakeholders perceive that the incidence of 

adverse events remains that reported by the 

Institute of Medicine in 1999

11 What do you perceive 

is the current incidence 

of adverse events in 

hospitals? 

Incidence similar = 63 

Substantial progress = 5 

(n = 68) 

Stakeholders view nonpayment policies for 

adverse events as a powerful incentive to 

improve care 

16 What impact do you 

anticipate will result 

from nonpayment 

policies for adverse 

events in hospitals? 

Primarily positive impact = 65 

Primarily negative impact = 2 

(n = 67) 

Hospitals rely on staff and managers to 

report adverse events internally 

19 How does your hospital 

identify adverse 

events? 

Hospital staff report to risk managers or quality 

assurance departments = 20 

(n = 20) 

Stakeholders suspect substantial 

underreporting of adverse events to outside 

entities 

22 What proportion of 

adverse events do you 

perceive are reported? 

Only a portion of events (underreporting) = 72 

All events are reported (no underreporting) = 1 

(n = 73) 

Information about preventing adverse 

events is widely available, but hospitals do 

not always apply this knowledge 

28 What are the barriers 

to progress in reducing 

adverse events in 

hospitals? 

Most prominent—hospitals do not routinely use 

guidelines to increase safety = 43 

(n = 78) 

Suggested Policy Strategies to Accelerate Progress (n = 78) 

Assessing the desirability and feasibility of 

creating a national oversight organization 

Consider national entity to coordinate efforts 

and/or provide oversight = 37 

Focusing on hospital use of guidelines to 

reduce events 

Further encourage or require hospital adherence 

to recommended practices = 35 

Establishing methods for determining 

incidence 

Improve methods for measuring progress = 21 

Expanding use of electronic health records Facilitate use of electronic health records = 20 

Measuring and analyzing the impact of 

nonpayment policies 

Assess the impact of nonpayment policies = 15 

Improving the utility of adverse event 

reporting systems 

33 What suggestions do 

you have for 

accelerating progress 

in reducing adverse 

events in hospitals? 

Improve adverse event reporting systems = 12 

Source: Office of Inspector General analysis of 78 stakeholder interviews and 117 published works, October 2007–April 2008. 

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Δ APPENDIX ~ F 

Examples of Research: Incidence of Adverse Events 

These examples represent a range of adverse events research using a 

variety of data collection methods. In some cases, the objectives of the 

research were other than deriving a measure of incidence. 

Table F1. Incidence Rate of Adverse Events and Related Research Information 

Population Studied Incidence Rate Method Summary 

General hospital 

admissions1

3.7% Medical record 

review 

Clinical reviews of 30,000 medical records from hospitalizations in 

New York. Cited in the Institute of Medicine (IOM) report, “To Err is 

Human: Building a Safer Health System.” 

General hospital 

admissions2

17.7% Observation Qualitative observational study of 1,047 patients at a large urban 

hospital. The risk for an adverse event increased by 6 percent for 

each day spent at the hospital. 

General hospital 

admissions3

2.9% Medical record 

review 

Clinical reviews of 15,000 medical records from hospitalizations in 

Colorado and Utah. Cited in the IOM report, “To Err is Human: 

Building a Safer Health System.” 

General hospital 

admissions4

8.0% Medical record 

review and patient 

interview 

Study of 228 patients included review of medical records and 

interviews with patients. 

Intensive care 

admissions5

20.2% Observation Study of 391 critically ill patients in yearlong review. Forty-five 

percent of all adverse events were preventable; 55 percent were 

nonpreventable. 

General hospital 

admissions6

9.0% Hospital incident 

reports 

Study of 1,000 incident reports at two hospitals. Nine percent of 

patients had at least one incident report, primarily medication 

administration incidents. 

1 T. A. Brennan, L. L. Leape, N. M. Laird, et al., “Incidence of Adverse Events and Negligence in Hospitalized Patients: Results of the Harvard Medical Practice 

Study 1,” New England Journal of Medicine, 324(6), 1991, pp. 370–376. Abstract available online at http://content.nejm.org/cgi/content/abstract/324/6/370. Accessed on 

October 10, 2008. 

2 L. B. Andrews, C. Stocking, T. Krizek, et al., “An Alternative Strategy for Studying Adverse Events in Medical Care,” Lancet, 349(9048), February 1997, pp. 309–313. 

Abstract available online at http://www.ncbi.nlm.nih.gov/pubmed/9024373. Accessed on October 10, 2008. 

3 E. J. Thomas, D. M. Studdert, H. R. Burstin, et al., “Incidence and Types of Adverse Events and Negligent Care in Utah and Colorado,” Medical Care, 38(3), 2000, 

pp. 261–271. Abstract available online at http://www.ncbi.nlm.nih.gov/pubmed/10718351. Accessed on October 10, 2008. 

4 S. N. Weingart, O. Pagovich, D. Z. Sands, et al., “What Can Hospitalized Patients Tell Us about Adverse Events? Learning from Patient-Reported Incidents,” Journal 

of General Internal Medicine, 20(9). 2005, pp. 830–836. Abstract available online at http://www.ncbi.nlm.nih.gov/pubmed/16117751. Accessed on October 10, 2008. 

5 J. M. Rothschild, C. P. Landrigan, J. W. Cronin, et al., “The Critical Care Safety Study: The Incidence and Nature of Adverse Events and Serious Medical Errors in 

Intensive Care,” Critical Care Medicine, 33(8), August 2005, pp. 1694–1700. Abstract available online at http://www.ncbi.nlm.nih.gov/pubmed/16096443. Accessed on 

October 10, 2008. 

6 T. K. Nuckols, D. S. Bell, and H. Liu, “Rates and Types of Events Reported to Established Incident Reporting Systems in Two U.S. Hospitals," by Teryl K. Nuckols, 

M.D., Douglas S. Bell, M.D., Honghu Liu, Ph.D., et al., in the June 2007 “Quality & Safety in Health Care” 16, pp. 164–168. Abstract available online at 

http://qshc.bmj.com/cgi/content/abstract/16/3/164. Accessed on October 10, 2008.

Source: Office of Inspector General analysis of published works, October 2007–April 2008.

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Agency Comments: Agency for Healthcare Research and Quality 

Δ APPENDIX ~ G 

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A PPENDIX G 

 Agency Comments: Center for Medicare & Medicaid Services

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 APPENDIX G 

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This report was prepared under the direction of Kevin K. Golladay, 

Regional Inspector General for Evaluation and Inspections in the Dallas 

regional office, and A. Blaine Collins, Deputy Regional Inspector 

General for Evaluation and Inspections. 

Δ ACKNOWLEDGMENTS 

Ruth Ann Dorrill served as the team leader for this study. Other 

principal Office of Evaluation and Inspections staff from the Dallas 

regional office who contributed to this report include Amy Ashcraft, 

Deborah Cosimo, Anthony Guerrero-Soto, Margaret Knight, Christi 

Macrina, Jeremy Moore, and Lyndsay Patty; central office staff who 

contributed to this report include Alan Levine, Ayana Everett, Mark 

Richardson, and Rita Wurm.