John C. Goodman


We estimate the economic cost of this loss of life and limb at between $393 billion and $958 billion in 2006 dollars. These amounts are equal to between 18% and 45% of all health care spending.

Roughly speaking, every time the health care system spends a dollar healing us, it causes up to 45 cents worth of harm. Of course, the system also does a lot of good. In fact the good is many, many times greater than the harm. Still, the cost of adverse medical events is so huge we would be foolish not to try to find ways to make it smaller.

Readers may wonder whether our study exaggerates the real size of the problem. If anything our results are conservative. For example, we estimate that the odds of a patient dying for some reason other than the medical condition which caused the patient to seek care in the first place is as high as one in 200. A study using newer data places those odds at one in 100.

To put those numbers in prospective, consider that a rule of thumb for many federal regulatory agencies is that any chance of death lower than one in one million is unacceptable. If we regulated hospitals the way we regulate the environment or consumer products we would have to close every hospital in America.

Moreover, using a more liberal definition of "injury," including bruises from falling down, as many as one-third of hospital patients are encountering adverse health events.

Our traditional method for dealing with this problem is through malpractice litigation. Yet, only about one-fourth of adverse medical events involve actual malpractice. Even in these cases, the system is highly imperfect. Only 2% of victims ever file a lawsuit and even fewer receive any compensation. Also, more than half of all the money spent on malpractice litigation goes to someone other than the victims and their families.

John C. Goodman
