We took a little break for awhile. We wanted to regroup as the health care reform shakeout unfolded and to make sure we continued to provide relevant ideas, information, and thoughts through our blog. We’re going to resume our previous direction. We simply want to provide interesting information, resources, and thoughts concerning the broader context of our health care system. We’ll obviously need to include some of the activities, fallout, and progress associated with health care reform- and we want to provide our views from a consumer/patient perspective. Our goal is simple- to improve the dialogue and context of health care between all stakeholders; consumers, providers, employers, health plans, government. We believe an informed health care market can and will make better decisions than one relying heavily on emotions, siloed perspectives, or legislation. The dollars and costs of our health care system are simply staggering. We all know we spend over $2 trillion in health care. We talk about this number so frequently that the number has, itself, become abstract. To put context of how big a trillion dollars is consider this fact; 1 million seconds is about 11.5 days. 1 billion seconds is about 32 years. 1 trillion seconds is equal to 32,000 years. These are big numbers- our current health care expenses equate to over 64,000 years from this perspective.
So, when we talk about an area that costs our system less than 1% of our annual health care expenses it doesn’t get a whole lot of attention. However, it’s when we start to make a difference in these “smaller” areas that we can start to make a difference on the bigger number. In addition, addressing some of these areas is simply the right thing to do.
The Society of Actuaries recently released a commissioned study completed by Milliman, Inc. concerning the costs of medical errors in our health care system today. (We posted the study in our Library and you can get it by Clicking Here). This study quantified the cost of documentable medical errors using claims data and some pretty conservative methodologies. In 2008, medical errors cost our health care system an estimated $19.5 billion dollars. Over $17.5 billion were direct costs of inpatient, outpatient, and prescriptions. Another $1.1 billion was related to lost productivity (10 million excess days missed from work), and over $1.4 billion to increased death rates (2,500 deaths due to medical errors).
An estimated $15 billion is spent in Medicare for readmissions to hospitals for preventable medical events. In California, over 1/3 of the patients are readmitted to the hospital within a year.
These are very real costs. These are preventable costs. In addition to the financial costs, these events impact the quality of life of every individual accessing our health care system. The Patient Protection and Affordable Care Act (PPACA) included a significant segment of its massive rules to addressing the issue of “readmissions.” In our view, this is an example of where the private market (hospitals, doctors, health plans) should have and could have picked up the ball and addressed the issue on its own. In “the best health care system in the world” you shouldn’t need a law to dictate the rules to fix an issue that shouldn’t be an issue in the first place. Unfortunately, the private market fumbled on this one. Now, we’ve got rules and laws to follow.
Live and learn.
