Medical Errors -Financial


Organizations seek to provide quality care to patients, which is essential in determining the financial health of the organization. However, medical errors deter organizations from achieving these objectives. Medical errors are defined as all the errors that occur in a healthcare organization (Starmer et al., 2013) As such, this paper seeks to discuss the financial effect of medical errors to an organization based on interviews from the financial managers and the leading physician of Impala healthcare organization. The interviews provided a useful means through which the researcher could access in-depth information on the attitudes and behaviors of the interviewees with regard to medical errors and thus uncover facts affecting the delivery of quality service in the organization. The financial manager and leading physician were chosen because of the financial roles they play in the organization.

The financial manager is responsible for the financial health of the organization by providing financial reports and developing the long-term financial goals as well as using analytical and communication skills to influence decisions. The leading physician, on the other hand, guides the organization through the implementation process by removing obstacles, such as negligence that may bring about medical errors as well as setting up control measures and training fellow staff.

Addressing the Medical Error Issue

The organization has for the last 12 months been looking to address the issue of medical errors using quality improvement strategies to cut costs and improve the operational efficiency and quality. The financial manager concurred that the organization was in track to improve the financial system, the outcome of care, and processes. This report has been made following an analysis of data to extrapolate the medical errors that have occurred in the healthcare organization, which were preventable if better practices and policies were instituted. The medical errors had cost the organization $400,000 in the drug-related, diagnostic, operative, and procedure-related areas in the past two years with increases in mortality rates in the hospital.  

Past Measures to Address the Issue

Since its inception, the healthcare organization has been using quality improvement techniques in the financial and healthcare delivery. The organization procured machines to aid in treating respiratory and other chronic diseases thereby reducing variation by 30 percent and increasing patient survival by 20 percent. These initiatives led to cost savings in the annual clinical costs and thus provided the organization with a strategic plan to apply across the healthcare system. The organization also established a blame-free environment whereby no one would be punished for reporting errors. This ensured that near-misses would be reported and as such assist the financial manager in identifying the error-prone areas and eventually simplify the treatment process (Lu, Guenther, Wesley & Gallagher, 2013). The staff members were advised to speak up in the case of any concerns that may alleviate medical errors. Moreover, the organization makes sure that the right people coordinate patients’ care. 

Future Steps to Address this Issue

The organization is in the process of putting measures to ensure patient and quality safety. This has been put under the watch of the financial director to attain operational excellence. The healthcare organization also deems it fit to adopt new principles to improve the healthcare operations and eventually eradicate medical errors (Johnson, Adkinson & Chung, 2014). Moreover, the organization would have to launch incentives and penalties for quality care delivery. This would come handy since the CMS has ceased from reimbursing healthcare providers for any preventable hospital readmissions. The last step would be to improve prescribing and thus mitigate medication errors by educating fellow staff on prescription procedures and providing prescriptions using computerized systems (Starmer et al., 2014). The organization would also work to improve accountability as well as transparency of information and thus improve the social capital.

Foreseeable Problems

One of the problems the organization is likely to encounter in addressing the problem of medical errors is heterogeneity since different healthcare providers deliver services to patients with different needs. This makes it difficult for organizations to establish quality standards, especially in service operations. Moreover, practitioners have varying personalities, abilities, and experiences thereby varying the quality of service delivery. Conversely, the inability to store healthcare services makes quality control difficult and thus making it difficult for the organization to guarantee healthcare financial outcomes (Johnson et al., 2014). Another key problem is the occupation of medical practitioners without finance expertise in the key managerial positions in the organization. This affects decision-making as these managers rely on intuition rather than reliable information to make decisions.

Perception Differences

The researcher thinks that it is crucial for the organization to employ the services of managers who understand financial and accounting concepts, a perception that differs from what the current management feels. As the demand for quality healthcare rises, the organization would find itself in an unpleasant situation whereby its management cannot provide accountability services and thus fail to curtail medical errors. However, the individuals working in the finance department assert that the organization lacks adequate resources, such as computerized systems to eradicate medical errors although the researcher feels that dealing with medical errors should start with transparency and accountability on the part of the management (Starmer et al., 2013). This would ensure that patients are taken into account and assist in reducing frequent management turnover and as such incentivize the staff to step up the reporting of errors.


Leave a Reply