August 15, 2010 | Mark Paradies

What Do Medical Errors Cost in the United States?

In June, the Society of Actuaries published  a study that estimates the cost of medical errors in the United States—titled: The Economic Measurement of Medical Errors.

What was the cost for errors in the US per year?

$19.5 billion dollars

Most of this cost ($17 billion) was for direct costs associated with increased patient care due to the error.

In other words, medical facilities had a $17 billion increase in revenue because they made mistakes.

Until recently, insurance and Medicare/Medicaid paid for correcting errors. Thus the only financial incentive to reduce errors was to reduce malpractice claims.

Because malpractice claims were not soon and certain, the incentive to improve systematically didn’t exist.

This may be changing because Medicare/Medicaid and some insurers are starting to eliminate payment for at least some types of errors. Thus, medical facilities will have a financial incentive to prevent these errors.

We’ll watch to see how this improvement goes based on economic incentives.

By the way … these costs don’t include medication errors.

If you are at a medical facility and would like to learn more about improving performance and stopping sentinel events, consider attending the Global TapRooT® Summit.

Here’s a link to the Summit schedule:

Patient Safety & Healthcare
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