Preventable medical errors cost country $1 trillion

Preventable medical errors may cost the United States up to $1 trillion dollars in lost human potential and contributions, according to the Journal of Health Care Finance.

That estimate is exponentially higher than previous studies, which focused solely on direct medical expenses associated with preventable medical errors. Previous studies showed the economic impact to range from $17 billion up to $50 billion annually and only focused on direct medical costs such as ancillary services, prescription drug services, and inpatient and outpatient care.

“Previous studies do not come close to illustrating the economic loss of human potential and contribution, which families, colleagues, businesses, and communities experience when someone dies from a preventable medical error,” says author Stephen Davidow, a Chicago-based health analyst. “The magnitude of the problem for our society is many orders of magnitude greater than just the medical costs.”

But researchers used “Quality-Adjusted Life Years” to develop a more complete accounting of the economic impact when someone dies from a preventable error.

The authors based their calculation on several well-accepted reports, studies, and economic measures. Based on that, there is a loss of $73.5 billion to $98 billion in QALYs. However, an article in last year’s Health Affairs says preventable deaths due to medical errors are 10 times higher than the IOM estimate. If that is the case, the economic impact is a loss of $735 billion to $980 billion—nearly $1 trillion—in human potential.

“There has been too much focus to date on just the health care cost impact of medical errors. This analysis makes an important contribution to our understanding of the broader economic impact of preventable medical harm,” says Jim Unland, editor of the Journal of Health Care Finance.

Davidow also notes that, to estimate the true economic cost of medical errors, there must be an effort to calculate lost productivity and assign a value to the economic activity of the 1 million or more patients who suffer from a medical error but survive. Some patients clearly have no long-term problems but others may be disabled for an extended period of time or for the rest of their lives. What this means is that the economic impact could be much greater than $1 trillion dollars.

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