Tag Archives: Jon Shreve

Have preventable medical errors led to higher preventable death rates in the United States?

A new study in Health Affairs examines preventable death rates in the United States. Here is the study’s abstract:

We examined trends and patterns of amenable mortality… in the United States compared to those in France, Germany, and the United Kingdom between 1999 and 2007. Americans under age sixty-five during this period had elevated rates of amenable mortality compared to their peers in Europe. For Americans over age sixty-five, declines in amenable mortality slowed relative to their peers in Europe. Overall, amenable mortality rates among men from 1999 to 2007 fell by only 18.5 percent in the United States compared to 36.9 percent in the United Kingdom. Among women, the rates fell by 17.5 percent and 31.9 percent, respectively. Although US men and women had the lowest mortality from treatable cancers among the four countries, deaths from circulatory conditions—chiefly cerebrovascular disease and hypertension—were the main reason amenable death rates remained relatively high in the United States. These findings strengthen the case for reforms that will enable all Americans to receive timely and effective health care.

On the topic of preventable medical errors, research authored by Milliman consultants for the Society of Actuaries  estimates that 1.5 million medical injuries in 2008 were associated with a such errors.

Here is an excerpt:

Using medical claim data for a large insured population to extrapolate to the United States population, we estimate that 6.3 million measurable medical injuries occurred in the United States in 2008. In an inpatient setting, seven percent of the admissions in the claim database resulted in some type of medical injury. Of the 6.3 million injuries, we estimate that 1.5 million were associated with a medical error… these errors resulted in over 2,500 excess deaths and over 10 million excess days missed from work due to short-term disability.

A PDF of the entire study, “The Economic Measurement of Medical Errors,” can be downloaded here.

“The Economic Measurement of Medical Errors” was authored by Jon Shreve, Jill Van Den Bos, Travis Gray, Michael Halford, Karan Rustagi, and Eva Ziemkiewicz.

Milliman perspectives on healthcare risk adjustment

Risk adjustment is commonly used by health insurers to increase the accuracy of cost models by taking into account the risk characteristics of different populations, usually by providing a risk score for each individual. Milliman consultants are commonly asked to perform risk adjustment and are always looking to advance its analytical utility. In a recent paper, Milliman consultant Ksenia Draaghtel demonstrates that

…segregating risk by service category better represents the differences in utilization and cost within each component, and is an important aspect in actuarial pricing. Inpatient, outpatient, physician, and pharmaceutical services possess different characteristics with respect to the utilization frequency, cost severity, speed of claim payment, and underlying trends.

The simulations used in the paper show how these techniques can increase profitability.

Risk adjustment has become more newsworthy recently with the resurgence of interest in provider cost-sharing as a mechanism of healthcare cost control. Two recent Milliman papers discuss the issue. The first, “Risk adjustment and its applications in global payments to providers” by Rong Yi, Jon Shreve, and Bill Bluhm, is a great place to start if you are new to the topic. It starts with a rationale for using risk adjustment in this field. Take two patients, one healthy, one with chronic diseases, each patient being treated by different providers. Assume that healthcare payments are determined by patient age and gender. Without risk adjustment, the provider with the sicker patient would appear overpaid and inefficient and would miss out on efficiency-based performance bonuses. The paper goes on to discuss risk adjustment methodologies, concurrent and prospective models, data issues, and other important considerations.

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Risk adjustment in Massachusetts

The Massachusetts Medical Society has published two papers on risk adjustment:

The papers provide an overview of risk adjustment and where it fits in health reform while offering practical suggestions for using risk adjustment in Massachusetts.

Quality (from a slightly different perspective)

We’ve talked a lot about quality since launching this blog, but most of the discussion has been specific to the healthcare industry. It’s always interesting to see a well-trodden issue through the eyes of an outsider, which is what we have with this article in Quality Digest summarizing the “Year in Quality.”  Here’s an excerpt:

Other low points in human endeavor centered in the medical industry. Findings from a study commissioned by the Society of Actuaries (SOA) and completed by consultants with Milliman Inc. estimated that measurable, avoidable medical errors cost the U.S. economy $19.5 billion in 2008. Having mulled over the data for a couple of years, 87 percent of the actuaries concluded that reducing medical errors is an effective way to control health care cost trends for the commercial population; 88 percent believe this to be true for the Medicare population.

What other healthcare topics attracted the eye of a publication that devotes a lot more pages to Six Sigma than actuarial science? The Institute of Medicine’s effort to weed out waste and the emergence of new nanotechnology that can help speed diagnostic capabilities also made the cut.

The most costly medical errors

Health Leaders looks at a recent report on avoidable medical errors and highlights the most costly such errors. Here are the top ten.

    1. Pressure ulcers—374,964 errors, $10,288 per error and $3.858 billion total.
    2. Postoperative infections—252,695 errors, $14,548 per error, $3.676 billion total.
    3. Mechanical complication of a device, implant or graft—60,380 errors, $18,771 per error, $1.133 billion total.
    4. Postlaminectomy syndrome—113,823 errors, $9,863 per error, $1.123 billion total.
    5. Hemorrhage complicating a procedure—78,216 errors, $12,272 per error, $960 million total.
    6. Infection following infusion, injection, transfusion, vaccination—8,855 errors, $78,083 per error, $691 million total.
    7. Pneumothorax—25,559 errors, $24,132 per error, $617 million total.
    8. Infection due to central venous catheter—7,062 errors, $83,365 per error, $589 million total.
    9. Other complicaitons of internal (biological) (synthetic) prosthetic device, implant and graft—26,783 errors, $17,233 per error and $462 million total.
    10. Ventral hernia without mention of obstruction or gangrene—53,810 errors, $8,178 per error and $440 million total.

Read the full article here and the full report here.

Avoidable medical errors cost $19.5 billion annually

A new study commissioned by the Society of Actuaries looks at the cost of avoidable medical mistakes and quantifies the economic impact of such mistakes as $19.5 billion annually. Here is a description of the study from the Wall Street Journal:

Medical errors and the problems they can cause — including bed sores, post-op infections and implant or device complications — cost the U.S. economy $19.5 billion in 2008, according to a study released today. (That’s enough to buy almost 1.3 billion copies of The Checklist Manifesto, Atul Gawande’s bestseller on reducing such errors via the lowly checklist.)

The study, commissioned by the Society of Actuaries and carried out by the actuarial and consulting firm Milliman, is based on insurance claims data. The cost estimate includes medical costs, costs associated with increased mortality rate and lost productivity, and covers what the authors describe as a conservative estimate of 1.5 million measurable errors. The report estimates the errors caused more than 2,500 avoidable deaths and over 10 million lost days of work.

The Hill also picks up on this story. Here’s an excerpt:

Preventable medical errors cost the country $19.5 billion in 2008 — or roughly $13,000 for each avoidable case, according to a report published Monday by the Society of Actuaries (SOA).

And that number is likely low, according to consultants at Milliman, who crunched the data. 

“We used a conservative methodology and still found 1.5 million measureable medical errors occurred in 2008,” says Jonathan Shreve, an actuary for Milliman who co-authored of the report. “This number includes only the errors that we could identify through claims data, so the total economic impact of medical errors is in fact greater than what we have reported.”

Read the study here.