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Linda Chalat
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Medical Errors Costs in Billions

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With continuing advances in medical care, one element seems to remain constant – the number of medical errors — conditions and injuries which occur in the hospital — has continued to hover around 1 million a year. These errors cost the system, especially hospitals, billions of dollars a year.

A study by independent health care ratings company HealthGrades concluded that conditions developed in hospitals resulted in more than 950,000 incidents, nearly 100,000 deaths and $8.9 billion in excess costs a year from 2006 to 2008.

Now a study published this year by the Society of Actuaries suggests that those numbers are a lot higher. It estimated that hospitals had more than 1.5 million medical errors in 2008, with the hefty price tag of $19.5 billion. This actual cost of care and lost productivity time, not defensive medicine or litigation costs.

Using medical claim data, the group identified costs of medical errors in the United States of $19.5 billion during the year 2008. Of this amount, the vast majority identified (about 87% or $17 billion) was a direct increase in the medical costs of providing inpatient, outpatient, and prescription drug services to individuals who are affected by medical errors. The Society of Actuaries also identified increases in indirect costs of approximately $1.4 billion related to increased mortality rates among individuals who experience medical errors and approximately $1.1 billion related to lost productivity due to related short-term disability claims.

Using medical claim data for a large insured population to extrapolate to the United States population, the researchers estimate that 6.3 million measurable medical injuries occurred in the United States in 2008. In an inpatient setting, seven percent of the admissions in the claim database resulted in some type of medical injury. Of the 6.3 million injuries, we estimate that 1.5 million were associated with a medical error. The measured total cost per error was approximately $13,000, resulting in a total cost to the United States economy of $19.5 billion. Additionally, these errors resulted in over 2,500 excess deaths and over 10 million excess days missed from work due to short-term disability.

The Society also notes that estimates of mortality costs and lost productivity are based on limited data and are likely to be underestimated. Both are limited to a one-year period following an error, and deaths are further limited to those which occur in the hospital.

The complete report can be obtained at: http://www.soa.org/files/pdf/research-econ-measurement.pdf