US hospitals pass 78% of the costs of all adverse events and 70% of the costs of negligent injuries to other payers, says a report by Harvard researchers. Their report, published in the Journal of Empirical Legal Studies (2007;4:835-60), says that these other payers include the Medicare insurance plan for elderly people, health insurance companies, disability insurance programmes, and injured patients and their families.
Medical errors cost $17bn (£8.6bn; €10.7bn) to $29bn a year in the United States, estimates the Institute of Medicine. Advocates for patients’ safety have tried to persuade hospitals that the cost of malpractice lawsuits and adverse events are a “business case” for improving safety, the authors of the report write. However, the study found that hospitals shift most of the costs of injury to other parties and therefore have little economic incentive to improve patient safety.
The study was funded by the non-profit Commonwealth Fund, which promotes improvements in the US healthcare system.
The report’s lead author, Michelle Mello, a professor at the Harvard School of Public Health, said that the authors used previously collected data on the costs of 465 injuries, including 127 negligent injuries, at 24 teaching and non-teaching hospitals in Utah and Colorado in 1992.
The authors used a cost model that included economic and non-economic losses. These included longer hospital stays or days spent in intensive care, outpatient visits, prescription drugs, medical equipment and supplies, home health care, physical therapy and rehabilitation, and nursing home care. They also included disability payments, burial costs, and lost wages, fringe benefits, and household production.
Only 2-3% of patients who are injured by negligence go on to file malpractice claims, the researchers found, and only about half of these recover compensation through lawsuits.
Injuries from operations were the most common type among the 465 injuries found, then drug errors, medical procedure errors, incorrect or delayed diagnosis or treatment, postpartum and neonatal errors, anaesthesia errors, and others.
The total societal cost of all 465 injuries was about $439m, including $270m for the 127 negligent injuries. The average cost per injury was $58 766 for all adverse events but was $113 280 for negligent injuries, the authors said. The higher cost of negligent injuries was due to non-economic losses.
The study found that each adverse event cost the hospital an average of $2013, and each negligent injury cost an average of $1246. The remainder of the costs was passed on to insurers, patients, and their families.
The biggest reason for hospitals’ ability to pass on costs was “the very low percentage of injuries that are compensated through the tort liability system,” the authors wrote. They argue that the way to revitalise the “business case” for patient safety is for insurers to direct patients to hospitals with a good safety record, for insurers to refuse to pay costs arising from medical errors, and for “health courts” to be established where cases would be adjudicated by administrative law judges who specialise in medical injury claims.
Such courts would be more efficient than the current medical liability system and would expand the group of patients liable for injury compensation, the authors say.
