The Costs of Medical Errors

According to a recent ABC story, a study confirmed anecdotal evidence of the "July Effect" - a rise in medical errors during the month of July, when new residents fresh out of medical school report to their teaching hospitals. A 2000 publication by the Institute of Medicine indicated that up to 98,000 Americans may die each year as a result of preventable medical errors.

Though the qualitative costs of medical errors can be devastating, a recent article in The Wall Street Journal says the quantitative costs can also be staggering. Citing a study commissioned by the Society of Actuaries, the article says medical errors and associated problems such as bed sores, infections and complications, cost the United States economy $19.5 billion in 2008. That is nearly 25 percent of the total costs associated with medical injuries.

Massive Financial Cost of Medical Errors

The study, based on insurance claims data, included medical costs, as well as costs associated with increased mortality rate and loss of productivity in the cost estimate. It covered 1.5 million measurable errors, a conservative estimate according to the report authors.

The report estimates that medical errors resulted in more than 2,500 avoidable deaths and over 10 million lost days of work. The study indicates the following estimated costs:

  • Bed sores, almost always considered to be the result of an error, represented the largest annual error cost, at nearly $3.9 billion
  • Post-operation infections followed at $3.7 billion
  • Device complications at $1.1 billion, tied with complications from failed spinal surgery
  • Hemorrhages cost $960 million

Jim Toole, managing director of MBA Actuaries, Inc., says the report highlights a singular opportunity to improve the overall quality of care while at the same time reducing health care costs in the country. He says that unlike automobile safety and the campaign to reduce highway deaths, there previously had been no information to provide the starting point for minimizing medical errors or injuries. Toole is making a call for federal patient safety reform, which would include a mandatory national reporting system.

Recovery and Compensation for Medical Errors

PR Newswire cites a survey in which 87 percent of actuaries believe that reducing medical errors is an effective way to control health care cost trends for the commercial population; 88 percent believe this to be true for the Medicare population. These costs are not just borne by insurers and large companies. Many of these costs are passed directly or indirectly to the individual patients and their families as well. According to the study:

  • Measurable medical errors in 2008 resulted in over 2,500 avoidable deaths and more than 10 million excess days missed from work due to short-term disability
  • The average total cost per medical error was approximately $13,000
  • An estimated seven percent of inpatient admissions resulted in some type of medical injury

The five most costly errors to the U.S. economy each year, according to the study, are:

  • Pressure ulcers, or bedsores
  • Postoperative infections
  • Mechanical complications related to devices, implants or grafts
  • Postlaminectomy syndrome
  • Hemorrhages that complicate a procedure

Toole charged the insurance companies with assuming an active role in helping health care systems implement an actuarial approach, which will identify potential causes of medical errors in a more systematic way.

Precautions which are as basic as using checklists can help reduce the risk of medical errors. Even so, thousands of patients can be and are affected by many different types of medical errors. Victims of anesthesia error, medication errors, wrong site surgeries, or those who have suffered bedsores or postoperative infections should contact a personal injury attorney with experience in medical malpractice to determine whether they have a claim.

While a lawsuit cannot erase the avoidable pain of a medical error or bring back a loved one who has died as the result of a medical mistake, demanding compensation for expenses and lost wages can offer financial security and help families move forward.