Capping and trading patient harm

Could a system that 'caps and trades' medical errors - similar to an emissions trading scheme - improve patient safety in our hospitals?

Coiera inside

A market-based "cap and trade" system similar to an emissions trading scheme could dramatically improve patient safety in hospitals, UNSW research has found.

Inspired by successful approaches to environmental governance, the health system-wide scheme would for the first time place a dollar value on patient safety and provide a way to use financial incentives and penalties to minimise patient harm.

A paper outlining the radical new approach appears this month in the British Medical Journal 's prestigious Quality and Safety in Health Care. The Journal has dedicated considerable space to the proposal, including three fast-tracked expert commentaries.

Professor Enrico Coiera and co-author Professor Jeffrey Braithwaite, from UNSW's Institute of Health Innovation, argue a new approach to patient safety is needed because 'business as usual' is no longer an option.

The recent Garling Review into acute care services found the NSW hospital system was in crisis.

Adverse events such as hospital-acquired infections, falls resulting in broken bones and administering the wrong drug are currently associated with about 10 per cent of hospital admissions and 1 million visits a year to general practitioners.

"We've thrown a lot at patient safety over the years," Professor Braithwaite said. "We've had numerous inquiries and they've all said the same thing. Yet the problems persist.

"We need to try something outside the box."

Under the proposal, system-wide targets on the number of acceptable adverse medical errors would be set, a patient safety price negotiated and a market established for the trade of safety credits. Organisations would then find ways to meet the targets. Those who do would be rewarded financially with credits while those who fail would be penalised. New and innovative players would be encouraged to enter the system to find ways to improve performance.

"Like in the carbon economy, you can talk to big polluters until you are blue in the face but unless they've got an incentive to join a system that creates rewards and punishments to change behaviour, you get nowhere," Professor Braithwaite said.

"For the first time, we would be putting a price on error, and that price would appear on organisations' bottom line," Professor Coiera said. "What we are doing is locking together the principles of financial incentives and penalties."

To listen to an interview with Professor Coiera on ABC Radio National's Life Matters visit the ABC website.

Contact: Steve Offner | 02 9385 8107 | s.offner@unsw.edu.au