Results for Hypothesis Two: Average Effects ModelResults from Hypothesis Two: Marginal Effects ModelReferencesAdverse Patient Safety Events: Who Gets Them and How Much Does it Matter? By Karen Mahaffey Advisor: Dr. Marsha Goldfarb August 4, 2004Introduction/Problem Definition In 1997, 33.6 million people entered the hospital hoping to improve their health status. Between 44,000 and 98,000 died as a result of medical errors. (Institute of Medicine, 1999) Statistics from this Institute of Medicine report have been cited in studies for the past four years. Though the actual numbers were hard to determine then, and still are, the hard truth is that of the approximately 34 million patients admitted to the hospital each year, many will receive an unanticipated and unwelcome consequence of their hospital stay. Medical errors (adverse patient safety events) result from sources such as incorrect drug prescriptions, foreign bodies left in during a surgical procedure, or hospital acquired (nosocomial) infections. While infection from a hospital procedure is an inherent risk in many cases, the fact remains that patients acquire infections that are not a natural consequence of the procedure but due to preventable quality of care issues. This paper looks at the randomness of infection as well as other adverse events. The question of who sustains adverse events is of importance to health services personnel to establish prevention practices. The consequence of the event is an economic question of interest. From a moral view, medical errors cause unnecessary pain and suffering. Patients take longer to recover, are sicker, and sometimes die as a result of the adverse events, all of which affect the patient and his family. The patient’s right to quality care has been violated, as has the doctor’s mandate to “do no harm”. From an economic point of view, the costs of medical errors may be unacceptable. The costs involved depend on the view taken. From society’s view, resources are not allocated efficiently. Medical staff, drugs, and other hospital resources are being used in the treatment of these errors instead of an alternative use. The alternative uses are not hard to imagine. About 45 1million Americans are uninsured, millions more are underinsured, health care costs are on a steady incline, and nurse shortages are the norm. Resources used unnecessarily to treat the consequences of medical errors could be used to provide insurance for the uninsured, subsidize medical research, pay for preventive care services, or for provision of other public or private goods. Lost productivity is a concern on both a macro and micro level. From the patient’s point of view, there are direct costs involved, most notably to those who are uninsured or self-insured. Patients may have to pay higher out-of-pocket charges when they are billed for the additional services needed to treat the medical error. In the current economy the percentage of low wage part-time workers with few or no benefits such as sick leave has increased. When these workers can not work as a result of an adverse event, they do not get paid. The impact on these families can be enormous although these indirect costs are usually not calculated in the costs associated with medical errors. From the hospital and doctor’s view there is a loss to their reputations that impacts future business to the extent that consumer’s knowledge of these errors is known. But herein lies another problem. Hospitals are not required to report cases such as hospital-acquired infections. This gives them an unfair advantage as a consequence of asymmetric information. Patients (consumers) will choose the “best” hospital and doctor based on their best knowledge, which is incomplete. If blame can be identified for the adverse event, litigation becomes another associated cost. Higher costs of malpractice insurance will result in either higher charges to the patient or will force hospitals to cut their spending on the provision of other services. From the insurer’s point of view, higher bills associated with the additional services needed to treat the medical error may not be paid. According to the CDC (2000) this means the hospital must absorb the excess charges. However, in the long-term, higher bills created by 2medical errors will lead to higher reimbursements and higher premiums, imposing an opportunity cost on policy holders (private insurance) and taxpayers (public insurance). While much of the literature related to nosocomial infections and other medical errors tries to define the extent of the problem, the primary focus has been on getting the medical community to put programs in place to prevent infections as a matter of better care. This is the ultimate goal, but decision makers often need an incentive to undertake additional and costly new programs and procedures. An economic analysis of the costs of medical errors and their distributional impacts can give just such an incentive. Literature Review As mentioned earlier, the seminal publication and the one most often cited is the Institute of Medicine’s (1999) publication To Err is Human: Building a Safer Health System. This publication stirred interest by researchers and the media, and prompted the President to create a commission on the quality of patient care. Some studies have quantified the costs for the entire category of medical errors. Others identify specific areas of concern. A publication of the Agency for Healthcare Research and Quality (AHRQ, Migdail and Murray, 2000) summarized studies that found adverse events due to surgical procedures represented 2/3 of all adverse events and adverse drug events accounted for one out of five injuries to patients. Studies show that other countries face the same problem to varying degrees. A recent Canadian study (Norton, 2004) estimated adverse events at 7.5% nationally, compared to 2.9% in the U.S. and 16.6 % in Australia. Hospital level studies are those undertaken most often. Economic modeling (Roberts, Scott, et al, 2003) showed an excess $15,275 cost to the hospital for a confirmed case of hospital 3acquired infection and $6,767 for suspected infections. They (Roberts, Scott, et al, 2003) find, as does the CDC (2000), that hospitals usually bear the cost of hospital acquired infections, not the third-party payor. An audit of studies related to the economics of nosocomial infections