1.5 Million Measurable Medical Errors Cost the U.S. Economy $19.5 billion in 2008

Findings from a new study, "The Economic Measurement of Medical Errors", estimate that measurable medical errors cost the U.S. economy $19.5 billion in 2008. Commissioned by the Society of Actuaries (SOA) and completed by consultants with Milliman, Inc., the report used claims data to provide an actuarially sound measurement of costs for avoidable medical injuries. Of the approximately $80 billion in costs associated with medical injuries, around 25 percent were the result of avoidable medical errors.

"This report highlights a singular opportunity for both improving the overall quality of care and reducing healthcare costs in this country," says Jim Toole, managing director of MBA Actuaries. "Of the $19.5 billion in total costs, approximately $17 billion was the result of providing inpatient, outpatient and prescription drug services to individuals who were affected by medical errors. While this cost is staggering, it also highlights the need to reduce errors and improve quality and efficiency in American healthcare."

Medical errors are a significant source of lost healthcare funds every year. For example, the study found that $1.1 billion was from lost productivity due to related short-term disability claims, and $1.4 billion was lost from increased death rates among individuals who experienced medical errors.

"We used a conservative methodology and still found 1.5 million measureable medical errors occurred in 2008," says Jonathan Shreve, consulting actuary for Milliman and co-author of the report. "This number includes only the errors that we could identify through claims data, so the total economic impact of medical errors is in fact greater than what we have reported."

Key findings from the study include:

• There were 6.3 million measureable medical injuries in the U.S. in 2008; of the 6.3 million injuries, 1.5 million were estimated to be associated with a medical error.
• The average total cost per error was approximately $13,000.
• In an inpatient setting, seven percent of admissions are estimated to result in some type of medical injury.
• The measurable medical errors resulted in more than 2,500 avoidable deaths and more than 10 million excess days missed from work due to short-term disability.

The study also identifies the 10 medical errors that are most costly to the U.S. economy each year. Approximately 55 percent of the total error costs were the result of five common errors:

• Pressure ulcers
• Postoperative infections
• Mechanical complications of devices, implants, or grafts
• Postlaminectomy syndrome
• Hemorrhages complicating a procedure

The study also published the detailed results for each error type.