Medical errors cost the U.S. economy $19.5 billion in 2008, according to a study commissioned by the Society of Actuaries. The study, based on claims data and completed by the consulting firm Milliman, found that of the approximately $80 billion in costs associated with medical injuries, around one in four were the result of avoidable medical errors.

“This report highlights a singular opportunity for both improving the overall quality of care and reducing healthcare costs in this country,” says Jim Toole, managing director of MBA Actuaries. “Of the $19.5 billion in total costs, approximately $17 billion was the result of providing inpatient, outpatient, and prescription drug services to individuals who were affected by medical errors. While this cost is staggering, it also highlights the need to reduce errors and improve quality and efficiency in American healthcare.”

Medical errors are a significant source of lost healthcare funds every year. For example, the study found that $1.1 billion came from lost productivity due to related short-term disability claims, and $1.4 billion was lost from increased death rates among individuals who experienced medical errors.

The study found measurable medical errors resulted in more than 2,500 avoidable deaths and more than 10 million excess days missed from work due to short-term disability.

The study found approximately 55 percent of the total error costs were the result of five common errors: pressure ulcers, postoperative infections; mechanical complications of devices, implants, or grafts; postlaminectomy syndrome; and hemorrhages complicating a procedure.

Jonathan Shreve, consulting actuary for Milliman and co-author of the report, says the researchers used “conservative methodology” and still identified 1.5 million measureable medical errors that occurred in 2008. The number includes only the errors that the researchers could identify through claims data. As a result, he says, the total economic impact of medical errors is in fact greater than what the study reports.