Tallying the High Cost of Preventable Harm

By Sophia Bernazzani

Public opinion polls suggest most Americans trust their medical team. People consistently list doctors, nurses and pharmacists as some of the most trusted professions. When we go to the doctor or are admitted to the hospital, few of us worry about the doctor, or someone else from the medical team, making a mistake. But mistakes do happen.

What Is Preventable Harm?

The Institute for Healthcare Improvement defines preventable medical harm as “unintended physical injury resulting from or contributed to by medical care (including the absence of indicated medical treatment), that requires additional monitoring, treatment or hospitalization, or that results in death.” These mistakes, called “preventable harm” or “adverse events” in medical literature, account for up to 1,000 deaths per day.

The most common types of preventable harm include hospital-acquired infections, surgical error or wrong site surgery, medication errors, in-hospital injury, misdiagnosis, and deep vein thrombosis. Adverse events are serious. Depending on the set of prevalence data you are using, preventable harm results in between 210,000 to 400,000 deaths annually. A far more common outcome than death is serious harm; which affects more than 10 to 20 times more patients than lethal harm.

What Are the Costs?

It is quite evident the human cost of adverse events is unacceptable, but equally startling is the massive economic impact. In 2008, preventable harm was estimated to cost the United States $19.5 billion. The bulk ($17 billion) of this cost was directly associated with additional medical expenses, followed by increased mortality rates ($1.4 billion) and loss of worker productivity ($1.1 billion). When indirect costs are accounted for, the estimated economic impact skyrockets to nearly $1 trillion annually.

Who Pays for these Medical Errors?

Data indicate that hospitals, on average, externalize 78 percent of medical costs associated with all injuries and 70 percent of medical costs associated with negligent injuries to patients through medical billing and malpractice claims. The average cost per incidence of preventable harm is approximately $58,776 per injury. Increasingly, Medicare and other insurers will not cover the cost of medical treatment related to adverse events and the remaining costs are typically externalized through malpractice insurance, which costs an average of $123 per patient the hospital sees.

But who pays for the remaining $83 billion in indirect costs? The patients themselves typically shoulder costs and the economy at large also suffers through disability payments, lost productivity and other associated costs. Many patient safety advocates have voiced concerns that hospitals are responsible for such a small proportion of preventable harm costs. Advocates argue that if hospitals should be accountable for more of the expenses associated with medical errors, which would lead to safer systems and practice. Essentially, this makes high quality patient care a “business case” where more precise care would reduce malpractice and other costs.

How Do We Address the Problem?

Health advocates and hospitals agree: Addressing preventable harm requires evidenced-based measures applied to system wide efforts co-led by effective health administrators. Errors leading to preventable harm are almost always multifactorial.  Systematic errors such as dysfunctional teams, poor allocation of resources, bad communication, and poor leadership among the administration are often more difficult to spot, but often easier to address. Systemic solutions are often applied to fix, catch and prevent human errors — meaning these predicate and facilitate human errors. This feedback loop requires continuous monitoring and constant updates of policies to defend against repeated adverse medical events.

In the end, reducing the impact of preventable harm will have lasting, immediate effects on both the bottom line of health systems and our overall economy. Just as there is no single determinant of preventable harm, there is no easy answer to the question, “How do we prevent it?” What we do know is there are health systems succeeding in reducing preventable harm by tailoring data, creating effective leadership and overhauling systems, and they are seeing improvement in both health and financial outcomes.

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Sophia Bernazzani is the community manager for the online master of health administration (MHA@GW) offered by the Milken Institute School of Public Health at the George Washington University. She’s passionate about global health, nutrition, and sustainability.