by Fred E. Foldvary, Senior Editor"Iatrogenic" means "caused by medical treatment." The term "iatro" comes from the Greek word "iatros" for medical or medicinal.
Iatrogenic death occurs when people die due to errors or negligence by doctors and pharmacists. The reported yearly death rate from medical error is over 120,000. This compares to around 44,000 deaths from motor vehicles and only a few hundred from commercial aviation. You should be far more worried about dying in a hospital than from an airplane crash.
The high death rate from hospitals was revealed by the release of data from the Medical College of Pennsylvania Hospital. During the past decade, hundreds of patients at this hospital suffered serious injury, and at least 66 died because of medical "mistakes." Some of the patients were never told that the injuries were caused by the doctors, and no disciplinary action was taken on any of the doctors involved in these incidents.
These records became publicized because of bankruptcy proceedings, when the new owner filed a detailed account of the 598 incidents from 1989 to 1998. This level of iatrogenic death and injury is typical of hospitals in the United States. A study by Harvard University professor Lucian Leape, reported by Knight Ridder newspapers, found that one million patients are injured by errors during hospital treatment annually, with some 120,000 deaths. One out of every 200 patients in hospitals in New York State had an iatrogenic death. Less than 10 percent of the medical mistakes are reported to hospital authorities.
I won't go into the gory details of these cases, but clearly, many of these errors are due to negligence, injuries which can be prevented. Since hospitals pay millions of dollars in malpractice awards and to legal costs, the administrators are either very bad businessmen or else they calculate that it would cost more to prevent the injuries than to pay compensation. Less than ten percent of iatrogenic cases result in lawsuits, often because the doctors keep quiet about the errors or negligence.
This high rate of medical negligence is a national scandal. As always, to find a remedy, we need to examine the cause. Is the market failing here, or is there not a truly free market? To answer this, we need to ask, how would a pure market work?
A pure market consists of voluntary economic activity, without any force or fraud. To accomplish this, there needs to be a basic market rule: all products are presumed to be safe and effective, unless the known faults are fully disclosed. Hospitals should therefore disclose their rate of iatrogenic deaths and injuries. Patients need to know this not just when they get sick or injured, but also beforehand, when they choose a medical plan and the hospital to which they would usually be sent to.
Another intervention that prevents medical care from being a pure market is that many of the customers do not directly choose and pay for medical service. Typically, insurance and medical plans are offered and paid for by employers. The employee might have a choice among a few plans, but he cannot get paid insurance outside these options, and there is little incentive for hospitals to honor consumer sovereignty if the patient is not paying. The reason employers pay for the medical treatment is that the cost is deductible from the employer's taxes, but not from the employee's taxes, so the incentive is for employer-provided plans.
Even if the patients directly paid for the medical care and insurance, and hospitals were required to report all iatrogenic incidents, doctors would still have an incentive to avoid reports that raised their malpractice insurance and damaged their reputation. What is needed to avoid such fraud is monitoring by neutral parties - representatives of insurance companies as well as patient's rights groups should be there observing operations and checking the records. There should be stiff penalties for fraud and the failure to report such incidents.
So it's not that the medical market is not working well, but that the medical market is skewed and larcenous, rather than free and pure. We have what economist James Buchanan calls "constitutional chaos." To escape this dangerous chaotic condition of massive medical negligence and fraud, we need to implement that basic market rule: all goods are services are to be safe unless otherwise reported! We also need to shift to a loser-pays system of lawsuits, and standardized malpractice awards.
Finally, to have a truly free market in medicine, we need to abolish the income tax, with its perverse incentives, and shift to public revenue that does not hamper consumer choice. The best base for consumer-neutral public finance is land rent, a payment that is fixed during the fiscal year, leaving consumers free to choose the services they desire, with no extra tax cost.
We can see that ending the medical nightmare of iatrogenic death and injury requires not just better hospital care but big changes in the legal and tax system to shift the whole health-care business towards accountability to the patients. Meanwhile, we can be alert to the iatrogenic danger. When you get a prescription, make sure you understand the medicine and dose, and then check the label. If possible, check on the safety record and complaint records of your doctors and hospitals. Since most doctors mean well, we should not be too cynical, but it is prudent to be wary and skeptical.
-- Fred Foldvary
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Copyright 1999 by Fred E. Foldvary. All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, which includes but is not limited to facsimile transmission, photocopying, recording, rekeying, or using any information storage or retrieval system, without giving full credit to Fred Foldvary and The Progress Report.