Medical Errors Report #16
A Four-Year Solution Implementation Study
Drains Health-care Revenue
Medical Errors Drains Health-care Revenue
Work inefficiency created by medical errors in hospitals and systemic failures in other businesses is costing institutions billions of dollars annually in non-productive and non-billable costs. It is estimated that an average hospital loses from $3 to $5 million dollars annually due to medical errors, repeat testing, rework, work duplications, misadventures, and so on. This money can better be used to improve the quality of patient care.
Improvement in Quality of Patient Care Saves Money
Contrary to what some hospital administrations may want to believe, quality improvement does not have to cost money, but involve commonsense and efforts. In one particular hospital under our study, the nursing staff drawing blood caused many specimen collection errors. They were about to switch to having trained phlebotomists draw blood. But the hospital administration hesitated because the cost of hiring phlebotomists was estimated to be $200,000 annually. The hesitation seemed reasonable until some other facts were revealed. When computer evaluating the amount of nursing time used to draw blood, estimated that though the actual quarterly cost of drawing blood was $360,000, it was costing the hospital over $1 million dollars annually. Which one is a better design; hiring trained phlebotomists to draw blood for $200,000 a year or letting the nursing staff continue to draw blood making many errors for over $1.2 million dollars a year? With a few exceptions, quality of improvement tends to reduce operational costs and increase patient satisfaction. Hospital administrations tend to believe that quality improvement will first cost them money before saving starts. Quality improvement does not have to initially cost money. If designed properly, effective quality improvement should lead to immediately savings.