What Is the Cost of an Adverse Event?
Adverse events are events in which care resulted in an undesirable clinical outcome – an outcome that prolonged the patient stay, caused permanent patient harm, required life-saving intervention, or contributed to death. They include but are not limited to healthcare-acquired infections (HAIs), patient falls, pressure ulcers, medication errors, and wrong-site surgeries.
Health economists at the Centers for Disease Control estimate that the annual costs of HAIs alone in the United States can cost the healthcare industry up to $45 billion per year. Furthermore, approximately 30–35% of falls occurring in healthcare facilities result in injury that can cost over $14,000 per incident and add, on average, 6.3 days to an individual's length of stay.
There are several ways in which the cost of events can affect a healthcare organization’s revenue stream. Consider the following:
- Adverse events can directly affect reimbursement under value-based payment programs. Payments from commercial or government payers are increasingly tied to the achievement of quality targets; poor performance means less reimbursement.
- Safety errors can cause hospitals to lose money under capitated payment arrangements. Errors may increase the total cost of care so that it eventually exceeds the fixed payment the organization will receive. This is particularly true for HAI-related events that unnecessarily drive up the cost of care.
- Noncompliance with accreditors often brings monetary penalties and fines.
- Lawsuits by patients, families, and even providers can result in legal costs for handling and processing. When not managed appropriately, even logged incidents that don’t necessarily result in patient harm can increase costs, leading to revenue loss.
- Adverse events (and even near misses) can take a psychological toll on involved participants. There are costs to treating depression and provider burnout, and addressing employee turnover.
- Reputational harm can lead to patients seeking care at competitor organizations, directly affecting volume and revenue.
While HAIs, inpatient falls, and other incidents can cause patient harm and increase financial burden to an organization, many adverse events are preventable with an effective patient safety and clinical quality technology that strengthens care delivery and drives quality outcomes.