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Study Based on Insurance Claims Data Finds Medical Errors Cost $19 Billion

Source: Wall St. Journal

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Posted on 10 Aug 2010

A just-released study based on insurance claims data finds that medical errors and their subsequent problems, such as bedsores, post-operative infections and other complications, cost the U.S. economy a whopping $19.5 billion in 2008.

The study was commissioned by the Society of Actuaries and conducted by the actuarial and consulting firm Milliman. The cost estimate includes medical costs, costs associated with increased mortality rate and lost productivity, and covers what the authors describe as a conservative estimate of 1.5 million measurable errors. The report estimates the errors caused more than 2,500 avoidable deaths and over 10 million lost days of work.

A couple of things make this study stand apart from previous studies, says Jim Toole, the chairman of the SOA’s project oversight group, who proposed the study a few years ago. First, the sample size is bigger, starting with a dataset of 24 million people. It also used control groups to calculate the cost-of-care differential between a patient who sustained an error-caused injury and a similar patient who wasn’t injured. And finally, says Toole, these were neutral data, collected for another reason, which means they’re less subject to bias than data aggregated for the sole purpose of counting errors.

Bed sores — which are always considered to be the result of an error — produced the largest annual error cost, at almost $3.9 billion, followed by post-op infections ($3.7 billion), device complications ($1.1 billion), complications from failed spinal surgery ($1.1 billion) and hemorrhages ($960 million). To come up with those figures, researchers found the total cost of a given type of injury and estimated how often it was caused by an error. (Those assumptions, plus the possibility that some data were miscoded, represent the study’s biggest weaknesses, Toole says.)

“This is so important, and yet it’s so overlooked,” says Toole. “We have wonderful information in this country about automobile safety and how in the last 20 years we’ve reduced highway deaths by 35% … but we have no starting point for medical errors or injuries.”

Toole says he would like to see better federal patient-safety efforts, including a mandatory national reporting system.


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