Current Stats Severely Underestimate Costs of Medical Errors

    July 2008 - Medical errors drive hospital costs up and while many seek ways to reduce these mistakes, not all fully understand their financial effects.

    A new review suggests that current statistics on medical mistakes might not be comprehensive because they do not factor in all inpatient costs or include readmissions and patient care for the 90 days following surgery.

    "Many hospitals are struggling to survive financially," said study co-author William Encinosa, Ph.D. "The point of our paper is that the cost savings from reducing medical errors are much larger than previously thought."

    Medical error studies that focus only on the inpatient stay can underestimate the costs by up to 30 percent.

    Encinosa is a senior economist at the Center for Delivery, Organization and Markets, of the Agency for Healthcare Research and Quality. He and his colleague followed insurance claims for 5.6 million enrollees from 2001 to 2002. The researchers concluded that the effects of medical errors continue long after the patient leaves the hospital.

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    The results appear in the latest online issue of the journal Health Services Research.

    According to a 1998 report by the Institute of Medicine, an estimated 44,000 to 98,000 Americans die because of medical mistakes each year, with an associated cost of $17 billion to $29 billion.

    Reducing medical mistakes will become even more urgent for many underfinanced hospitals by October 2008 when Medicare cuts reimbursement for a wider category of mistakes.

    "Most efforts to measure such costs stop at patient discharge and some symptoms dont happen the same afternoon," said Arthur Levin, director of the Center for Medical Consumers, a non-profit advocacy group. "If a patient stays in the hospital for 27 days, you know when a mistake has been made, but you may not know it if he is discharged and readmitted to another hospital."

    If patients use a variety of insurance options to provide coverage, the overall cost might not include such follow-up care.

    "You have to follow patients because the reality is that it costs more than most people realize," said Levin, who believes that centralized data could help provide a clearer picture.

    The large difference in calculations for medical error expenses might mean that interventions to increase patient safety - like adding more nursing staff - could be more cost-effective than previously thought, Encinosa said.

    Encinosa WE, Hellinger FJ. The impact of medical errors on 90-day costs and outcomes: an examination of surgical patients. Health Services Research online, 2008.

    Source: HBNS