Medical Device Errors a Drain on U.S. Economy

Errors from medical devices, implants or grafts and the problems they can cause cost the U.S. economy $1.1 billion in 2008, according to a new study.

The study, commissioned by the Society of Actuaries and conducted by Seattle, Wash.-based actuarial consulting firm Milliman, is based on insurance claims data. The cost estimate includes medical overhead and expenses associated with increased mortality rates and lost productivity, according to the 54-page study. In addition, the approximation covers the authors’ “conservative” estimate of 1.5 million measurable errors. The report claims all medical errors cost the American economy $19.5 billion, caused more than 2,500 avoidable deaths and resulted in more than 10 million lost days of work in 2008.

“This report highlights a singular opportunity for both improving the overall quality of care and reducing healthcare costs in this country,” said Jim Toole, FSA, CERA, MAAA and managing director of MBA Actuaries, Inc. “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.”

Some of the most common problems associated with medical errors are bed sores, post-operative infections and implant or device complications. Bed sores—which usually result from an error—produced the largest annual error cost, at nearly $3.9 billion, followed by post-operative infections ($3.7 billion), device complications ($1.1 billion), complications from failed spinal surgery ($1.1 billion) and hemorrhages ($960 million), according to the report. Researchers came up with those figures by finding the total cost of a specific injury and estimating the frequency that an error caused it.

However, Toole acknowledged to The Wall Street Journal that those assumptions, and the possibility of miscoded data are major weaknesses of the study. Still, the report stands apart from others detailing the cost of medical errors in several ways. First and foremost, the sample size is bigger, covering 24 million people. It also used control groups to calculate the cost-of-care differential between patients who sustained an error-caused injury and those who were not injured. In addition, the data are neutral, which subjects them to less bias than numbers aggregated specifically for the purpose of counting errors.

“This is so important, and yet it’s so overlooked,” Toole told the Journal. “We have wonderful information in this country about automobile safety and how in the last 20 years we’ve reduced highway deaths by 35 percent … but we have no starting point for medical errors or injuries.”

Toole said he would like to see better federal patient-safety efforts, including a mandatory national reporting system.