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States, the authors estimate the national costs of adverse events to be $37.6 billion and of preventable adverse events to be $17 billion. The total national costs associated with adverse events was approximately 4 percent of national health expenditures in 1996. In 1992, the direct and indirect costs of adverse events were slightly higher than the direct and indirect costs of caring for people with HIV and AIDS.

It has been estimated that for every dollar spent on ambulatory medications, another dollar is spent to treat new health problems caused by the medication.97 Studies of the direct costs of medication-related errors fall into three categories; (1) population-based studies of patients in a community or health plan; (2) studies of medication-related errors that occur in hospitals; and (3) studies of medication-related errors that occur in nursing homes.

One estimate places the annual national health care cost of drug-related morbidity and mortality in the ambulatory setting as high as $76.6 billion in 1994.98 Not all drug-related morbidity and mortality is preventable, but numerous studies document errors in prescribing,99,100 dispensing by pharmacists,101 and unintentional nonadherence on the part of the patient.102

Medication-related errors occur frequently, most do not result in actual harm, but those that do are costly. One recent study conducted at two prestigious teaching hospitals found that almost two percent of admissions experienced a preventable ADE, resulting in an average increased length of stay of 4.6 days and an average increased hospital cost of nearly $4,700 per admission.103 This amounts to about $2.8 million annually for a 700-bed teaching hospital, and if these findings are generalizable, the increased hospital costs alone of preventable adverse drug events affecting inpatients are about $2 billion for the nation as a whole.

In a matched case-control study of all patients admitted to a large teaching hospital from January 1990 through December 1993, it was found that adverse drug events complicated 2.43 admissions per 100.104 Controls were matched to cases on primary discharge diagnosis related group (DRG), age, sex, acuity, and year of admission. The occurrence of an ADE was associated with an increased length of stay of 1.91 days and an increased cost of $2,262. The increased risk of death among patients experiencing an adverse drug event was 1.88.

Other studies corroborate the high cost of medication-related errors. One study conducted in a university-affiliated medical center hospital estimated that the annual costs of treating the 1,911 medication-related problems identified through the hospital's voluntary reporting system in 1994

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