The Social Cost Of Adverse Medical Events, And What We Can Do About It

Adverse medical events-medical interventions that cause harm or injury to a patient separate from the underlying medical condition-are unfortunately an all-too-frequent occurrence in US hospitals. They may cause as many as 187,000 deaths in hospitals each year, and 6.1 million injuries, both in and out of hospitals. We estimate the annual social cost of these adverse medical events based on what people are willing to pay to avoid such risks in non-health care settings. That social cost ranges from $393 billion to $958 billion, amounts equivalent to 18 percent and 45 percent of total US health care spending in 2006. A possible solution: Patients offered voluntary, no-fault insurance prior to treatment or surgery would be compensated if they suffered an adverse event-regardless of the cause of their misfortune-and providers would have economic incentives to reduce the number of such events.