Medical errors cost hospitals $19.5 billion in 2008, says SOA report

A recent report from the Society of Actuaries (SOA) found that medical errors cost hospitals $19.5 billion in 2008.  According to the SOA report, the top three most costly medical errors were pressure ulcers, postoperative infections, and mechanical complications of device, implant or graft.

The release of the report comes at a time when hospitals and other health care facilities are under immense pressure to reduce costs, while government mandates and cost containment strategies squeeze their top line revenues.  Yet while hospitals work to reduce costs, health care reform mandates will require hospitals to make significant investments in IT upgrades.

But those upgrades could be a real opportunity for progressive-minded organizations, according to Ed Daihl, CEO of Surgical Information Systems (SIS).  "Operating rooms are the economic engine of any hospital," said Daihl.  "Because of this, improvements in patient safety and operating efficiencies can have a profound, long-term impact on a hospital's financial condition.  We've seen firsthand how specialty perioperative systems can drive hospital efforts to reduce medical errors and foster better health outcomes, while decreasing waste and improving overall financial viability of the enterprise."

Daihl went on to say that the top three errors cited by the Society of Actuaries can be significantly reduced through the implementation of a specialty surgical information system that supports the use of comprehensive pre-admission testing, standardized workflow, automated checklists and intuitive analytics tools.  

The safety concerns are obvious for hospitals.  Healthier patients are the goal of every health care institution.  But the financial downside to medical errors is also a significant issue facing hospital executives.  A related survey—this conducted by Surgical Information Systems (SIS) in July—found that 92% of hospital executives indicated that perioperative performance is more important in light of recent regulatory changes.  And the economic downturn is causing many of them to take action.  According to another survey—this, from the Healthcare Financial Management Association (HFMA)—more than 80% of responding financial executives reported that their organizations have devoted more attention to process improvement and clinical business performance.

Daihl said that recent findings regarding the scope and cost of medical errors in the U.S. highlight the importance of the perioperative department during a time when hospitals are seeking ways to meet government mandates, improve patient safety and enhance revenues.  "Healthcare providers are realizing that hospital-wide systems are not necessarily the best option when considering extreme challenges facing hospitals now.  ARRA requirements are certainly important; however, staying profitable and improving safety is even more critical," said Daihl.  "With the SOA reporting that each medical error costs approximately $13,000, perioperative automation is the best investment hospitals can make right now to improve both patient health and the financial health of the hospital, while also meeting new government mandates."