Market-based control mechanisms for patient safety

Abstract

A new model is proposed for enhancing patient safety using market-based control (MBC), inspired by successful approaches to environmental governance. Emissions trading, enshrined in the Kyoto protocol, set a carbon price and created a carbon market--is it possible to set a patient safety price and let the marketplace find ways of reducing clinically adverse events? To "cap and trade," a regulator would need to establish system-wide and organisation-specific targets, based on the cost of adverse events, create a safety market for trading safety credits and then police the market. Organisations are given a clear policy signal to reduce adverse event rates, are told by how much, but are free to find mechanisms best suited to their local needs. The market would inevitably generate novel ways of creating safety credits, and accountability becomes hard to evade when adverse events are explicitly measured and accounted for in an organisation's bottom line.

Figure 1

Governing a patient safety market: how the major players might align.

Figure 2

Calculating safety credits. Two separate clinical organisations institute different harm-reduction projects, aimed at reducing locally relevant causes of regulated preventable adverse event (PAE) classes. Project impacts in reducing the incidence of PAEs are audited, and then a weighting index converts PAE reductions into a common costable metric, such as days in length of stay prevented. The aggregate cost of all projects for an organisation, expressed as the total number of harm reduction units (HRUs) achieved, is then compared with the organisation’s target HRUs. Surplus HRUs generate tradable credits, to be bought by organisations that miss targets.