Medical errors are not just causing harm to patients, they are also proving to be quite expensive. At least that is what the Institute of Medicine feels because it estimates that medical errors cost $17 billion to $29 billion each year. So, who pays for medical errors?
It is believed that the most of the cost of medical errors is palmed off to outside parties like the payers, that is you, and Medicare. This would explain why hospitals have no incentive to improve patient safety because they do not feel the brunt of the cost of medical errors.
For years now patient safety advocates are trying to educate healthcare organization so that they invest in safer practices and systems. The advocates believe that the healthcare organizations will be the ultimate winners because they will have reduced malpractice costs and other associated expenses.
An analysis on who pays for medical errors was done by a renowned scholar from the Harvard School of Public Health and this was done to gauge the extent to which hospitals would be ready to take on the costs of medical errors. The research showed that hospitals tended to take on two-thirds of the extra costs associated with medical errors and the balance one-third was billed to Medicare. However, the analysis just took into consideration initial hospitalization.
While conducting the research, the researchers ensured that they took into consideration all the costs hospitals would have to bear through tort liability system and this included inpatient care, outpatient care, lost income, future medical expenses, burial costs, and non-economic costs like pain and suffering.
So, ultimately who pays for medical errors? The research revealed that the costs associated with medical errors were passed down by the hospitals to other payers. Hospitals externalized 78 percent of the costs of injuries due to medical errors and 70 percent of the costs due to negligence. This means that ultimately the ordinary man is paying for medical errors.
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