A recent report published in the Journal of HealthCare Finance touched on a subject of obvious importance to our legal team: the intersection of economics and medical errors. In particular, the comprehensive research sought to examine the actual financial toll that healthcare quality problems take on national budgets. The full report can be found here.
Our med mal attorneys frequently push back against all of the false claims made about the connection between the civil justice system and healthcare costs. The obvious reality is that a focus on the healthcare system itself is required to truly tackle the rising healthcare financial burden. In particular, the wasted funds required as a result of medical errors is a good starting point to understand the changing priorities that are needed to truly address the human and monetary losses accrued as a result of inadequate medical quality.
The Economics of Medical Errors Study
The latest study lays out the sad reality. Some estimates suggst that as many as 200,000 Americans are killed annually as a result of preventable medical errors and hospital acquired infections. The direct costs of those erorrs is significant, totaling nearly $20 billion each and every year. Those costs mostly refer to the those things directly related to the medical quality problems, like prescription drugs, ancillary support, inpatient and outpatient medical care, and more. On top of that, the figure includes costs for things like lost work productivity and disability claims.
But the reality is that the $20 billion figure may be far too low. After all, how does one fully account for the full financial consequences of the hundreds of thousands of deaths? The article points to another study which tried to more fully recognize the overall financial impact of preventable medical errors. That effort used “quality-adjusted life years” figures to capture the overal financial loss. What figure did they reach? A staggering $1 trillion annually may be lost because of medical negligence and preventable problems throughout our national healthcare industry.
Those figures should not be ignored.
The bottom line argument made by the authors of this study is that better care is actually more financially efficient care. This runs counter to natural perceptions when compared to other markets. One assumes that higher quality products and services are naturally going to be more expensive. In that way, there might always be a trade-off between quality and costs. But the healthcare world does not work like that. And considering lives are on the line, there is simply never a reason to sacrifice quality.
Fortunately, not only should one never sacrifice quality, but quality and cost are related. Better care is less expensive. The goal, according to the study’s authors is “the right care, at the right time, every time.” Right now we are falling far short of that goal. As a result more patients are hurt and we are losing billions and billions of dollars that might be saved. The stakes are high and therefore much more focus needs to be on improving the quality of care. Things like tort reform are nothing more than a completely useless distractions from the real issues.
Not to be too pessimistic, the authors suggest that there are positive signs of change in the healthcare industry. Many insiders may finally be prioritizing real reforms seeking to address this quality issue. While the changes might be motivated by finances, it will still save lives along the way–something that all of us understand is necessary and welcome.
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