Leapfrog Places Price Tag On Medical Errors

Every hospital has committed a medical error, almost certainly in the past day or two. The Leapfrog Group can now affix a price tag to such mishaps.

The Washington-based healthcare quality organization has studied the 26 hospital safety measures for which national data is available and used the letter grades it assigns to hospitals to assign costs per patient at those hospitals.

A patient treated at hospital with an “A” grade pays an average surchage of $5,935 to cover medical errors, suggesting how widespread they are in healthcare delivery. But a patient treated at a hospital that earned a “C” grade pays $7,780, more than 30% extra.

"It's counterintuitive and outrageous, but you will pay a lot more for hospitals that have more errors, accidents and infections," said Leapfrog Group Chief Executive Officer and President Leah Binder. "Errors aren't typically marked as a line item on a bill – but purchasers and consumers are paying millions of dollars for them, and we've substantiated it with our research."

According to Leapfrog data, the average employer group that provides coverage for 10,000 lives will pay $6.9 million a year in extra costs due to medical errors, assuming 1,000 inpatient admissions occur each year. However, that cost is higher if patients are treated at hospitals more prone to errors: $7.7 million. But if their patients are consistently treated at hospitals that commit the fewest medical errors, the cost is only about $5.9 million, based on Leapfrog's reporting methodology.

Medical errors on their own are particularly costly to remedy: A study published last spring in the Journal of the American Medical Association concluded that a single surgical complication at one hospital system in the southeast tacked on more than $37,000 in additional charges to the typical Medicare patient's bill.

"It is worth noting that even 'A' hospitals have patient safety challenges and arenot exempt from this hidden surcharge." Leapfrog noted in the white paper it disseminated to explain its methodology for determining the costs associated with errors. The organization also issued a spreadsheet-based calculator for employer groups to determine how much they were paying for each medical error.

Editor's Note: An earlier version of this article gave the incorrect title for Leapfrog President and Chief Executive Officer Leah Binder.