Wednesday, October 31, 2012

This Is Really A Totally Astonishing Figure. Could It Be True?

The following appeared a few days ago:

Study Pegs Cost of Medical Errors Near $1 Trillion Annually

OCT 19, 2012 5:24pm ET
A study in the Journal of Health Care Finance from Wolters Kluwer finds medical errors in the U.S. may cost up to $1 trillion per year.
That figure includes measuring the cost of lost human potential and contributions, making the overall cost from errors considerably higher than shown in previous research. Study authors used Quality-Adjusted Life Years (QALY) to get a more  complete accounting of the economic affect when a person dies from a preventable medical error. They took calculations on measures from multiple previous reports, including the 1998 benchmark figure from the Institute of Medicine of 98,000 deaths caused annually from medical errors.
More here:
Here is the abstract of the paper (free full text available from same link)

The Economics of Health Care Quality and Medical Errors

Article from Journal of Health Care Finance, Vol. 39, No. 1, Fall 2012, published by Wolters Kluwer Law & Business

Charles Andel, Stephen L. Davidow, Mark Hollander, and David A. Moreno

Hospitals have been looking for ways to improve quality and operational efficiency and cut costs for nearly three decades, using a variety of quality improvement strategies. However, based on recent reports, approximately 200,000 Americans die from preventable medical errors including facility-acquired conditions and millions may experience errors. In 2008, medical errors cost the United States $19.5 billion. About 87 percent or $17 billion were directly associated with additional medical cost, including: ancillary services, prescription drug services, and inpatient and outpatient care, according to a study sponsored by the Society for Actuaries and conducted by Milliman in 2010. Additional costs of $1.4 billion were attributed to increased mortality rates with $1.1 billion or 10 million days of lost productivity from missed work based on short-term disability claims. The authors estimate that the economic impact is much higher, perhaps nearly $1 trillion annually when quality-adjusted life years (QALYs) are applied to those that die. Using the Institute of Medicine’s (IOM) estimate of 98,000 deaths due to preventable medical errors annually in its 1998 report, To Err Is Human, and an average of ten lost years of life at $75,000 to $100,000 per year, there is a loss of $73.5 billion to $98 billion in QALYs for those deaths―conservatively. These numbers are much greater than those we cite from studies that explore the direct costs of medical errors. And if the estimate of a recent Health Affairs article is correct―preventable death being ten times the IOM estimate―the cost is $735 billion to $980 billion. Quality care is less expensive care. It is better, more efficient, and by definition, less wasteful. It is the right care, at the right time, every time. It should mean that far fewer patients are harmed or injured. Obviously, quality care is not being delivered consistently throughout US hospitals. Whatever the measure, poor quality is costing payers and society a great deal. However, health care leaders and professionals are focusing on quality and patient safety in ways they never have before because the economics of quality have changed substantially.
Key words: medical errors, quality, patient safety, quality-adjusted life year, QALY, Joint Commission, Institute of Medicine, Society of Actuaries, Milliman, efficiency, Medicare, accountable care organizations (ACOs), facility-acquired condition, cost savings.
Full text link here:
The conclusion sentence or two of the paper says it all


“Quality care is less expensive care. It is better, more efficient, and by definition, less wasteful. It is the right care, at the right time, every time. It should mean that far fewer patients are harmed or injured.”
What is interesting is the implications for Australia.
On a population basis 22/315 Million = about 7% = $70 Billion ($US)
On a GDP basis it is 1.4/15 (Trillion $) = about 9.5% = $95 Billion ($US)
Now while all this cannot be got rid of - even small percentage improvements can thus make a huge difference.
Properly implemented e-Health can be part of this story. Seems like there is an opportunity here!
Pity that isn’t the focus of present e-Health rather than the unproven PCEHR.