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Will the cost of poor medical care in US hospitals change the pharma marketplace?
Four healthcare-policy researchers affiliation with Loyola University’s Medical Center and Quinlan School of Business (Chicago) have published a paper in the latest J. of Health Care Finance (vol. 39, No. 1, pp 39-50) analyzing the costs of medication errors to the US economy. Using previously published sources (such as the oft-cited figure from the Institute of Medicine’s To Err is Human report, which calculated 98,000 premature deaths), combined with Quality-Adjusted Life Years (QUALYs) analysis of these deaths, they come up with a figure of $98 billion as the upper range of the lost value to the US economy. To this can be added an estimated $19.5 billion annually in direct extra medical costs caused by medication errors; and another recent estimate (from a 2011 Health Affairs article) that preventable errors might be underreported by a factor of 10, and you wind up with the nearly $1 trillion estimate.
The pharma industry’s role in this is minimal, based on what the authors analyze; among other things, they point a finger at the practice of “purchasing multi-dose medications instead of single-use vials and syringes” as a source of error, and also the extra costs being incurred by health systems dealing with medication shortages.
Analysis employing concepts like QUALYs are open to debate; using the paper’s measure of $100,000 per QALY, one could conclude that the entire US population (312 million) is “worth” $31 trillion each year—but what does one do with that? The paper (which apparently was not peer-reviewed) concludes that “health care leaders and professionals are focusing on quality and patient safety in ways they never have before because the economics of quality have changed substantially.” If so, pharma leaders who can clearly make a case for better safety through using their products should be getting a better hearing in healthcare circles.