Saturday, December 29, 2007
An interesting abstract regarding externalities and payment for medical errors was recently posted on SSRN by Michelle M. Mello, David M. Studdert, Eric J. Thomas, Catherine Yoon, and Troyen A. Brennan. The article is entitled "Who Pays for Medical Errors? An Analysis of Adverse Event Costs, the Medical Liability System, and Incentives for Patient Safety Improvement."
Here is the abstract:
Patient safety advocates argue that the high costs of adverse events create economic incentives for hospitals to invest in safety improvements. However, this may not be the case if hospitals externalize the bulk of these costs. Analyzing data on 465 hospital adverse events derived from medical record reviews, we investigated the amounts that hospitals and other payers incurred in medical-injury-related expenses. On average, the sampled hospitals generated injury-related costs of $2,013, and negligent-injury-related costs of $1,246, per discharge. However, hospitals bore only 22% of these costs. Legal reforms or market interventions may be required to address this externalization of injury costs.
The entire article is available in the Journal of Empirical Legal Studies, Vol. 4, No. 4, pp. 835-860, 2007.