To Achieve Zero Harm,We Must Address Financial Harm

Abstract

Financial harm to patients from preventable medical errors is a widespread problem that can have long-term consequences financially as well as on well-being and experience. Organizations need to develop better measurement strategies for this harm, aligned with their patient safety efforts, and implement robust mitigation strategies, such as including financial harm in root cause analysis processes and implementing Communication and Resolution Programs. In addition, the full health care system, including health systems and payers, must come together to create best practices and policies to ensure that patients are not harmed financially when experiencing medical error.

Introduction

I had a preventable medical error that left me amputated to my waist and with ongoing physical pain. What I did not expect was how much it would affect my life financially. The doctor bills started coming so fast I could not keep up with them. After depleting our savings, retirement, and 401k accounts, there were times when medical bills had to override the house payment. The toll of physical, emotional, spiritual, and financial devastation continues today. (Rosie Bartel, Patient Advocate)

Our aspirational goal in healthcare is to achieve zero preventable harm. Some may argue this is not achievable, but as an industry, this sets a North Star for what every patient and caregiver expects and deserves, and makes us think differently about ways to achieve it. As we strive to achieve zero harm, there is recognition of the need to expand harm to include both physical and emotional harm to patients and the workforce. ¹ Leading organizations have been working to embed emotional harm definitions and taxonomies, and understand ways to mitigate it, just as they have been doing for physical harm for years. As organizations expand their thinking, another important dimension that must be considered is financial harm (also known as financial toxicity), defined as the negative effects of the economic burden of medical care on patients. ²

Financial harm from healthcare is widespread and has an enormous impact. Medical expenses are the leading cause of personal bankruptcy in the United States, and 1 study found that over 60% of patients with medical debt had to cut spending on essentials such as food and clothing, 40% took on extra work, and 17% experienced bankruptcy or home loss. ³ In addition, studies have shown a substantial impact of financial harm, including poor experience, well-being, and quality of life.^4,5

The overall burden of financial harm is daunting, given the challenges of the US healthcare system. However, an important subset of financial harm events is more in organizational control and occurs frequently: financial harm from medical errors. Financial harm in this context is negative financial impacts from care needed as a result of preventable medical error, and can lead to financial toxicity, such as poor well-being and quality of life. In a survey conducted in 2017, 41% of the general public experienced long-term or permanent financial harm after experiencing medical error (Supplemental Figure 1). ⁶ In another survey, of those who experienced medical error, 50% reported increased medical expenses, 33% had a decrease in income, and 33% had increased household expenses. ⁷ In addition, inequities can contribute to financial harm, given socioeconomic differences that impact patients’ ability to pay.

Particularly in cases of medical error, financial harm can lead to further emotional and physical harm, as highlighted by Rosie Bartel's story. The stresses of financial burdens, as well as the inappropriateness of being asked to pay for care that has caused preventable harm, is known as compounding harm ⁸ and can cause emotional harm and lack of trust in the healthcare system. This can also be a contributor to future litigation risk as well as impact future health behaviors (eg, healthcare avoidance), potentially leading to eventual additional preventable physical harm.

Actionable Insights

An important place to start to reduce financial harm from medical errors is to treat financial harm from preventable errors just like other types of preventable harm. Leaders must be transparent about financial harm and commit to preventing it. To start, organizations should implement robust reporting and measurement, including asking patients impacted by error about financial impacts (both short and long term) through surveys, focus groups, and other listening strategies. As with other kinds of harm, event root cause analysis (RCA) should be performed and lessons learned and shared. As part of the RCA process, patients should be asked about potential financial concerns during interviews and in follow-up conversations.

The great majority of patients who sustain a medical injury as a result of error do not sue, so relying on medical malpractice to mitigate financial harm is unreliable. ⁹ Communication and Resolution Programs (CRPs) are a way to address this concern. CRPs are principled, comprehensive, and systematic with the goal of preventing and responding to harm events. ¹⁰ Importantly, CRP implementation is part of the recently launched CMS Patient Safety Structural Measure.

CRP includes several components, including robust processes for communicating transparently to patients and families about harm and the results of harm investigations, with early financial settlements for harm due to preventable medical error. It is recommended that organizations hold all bills until the investigation is complete. A critical aspect is actually identifying all the sources of bills and notifying patients that they will be held and then released if the event is determined to have not been preventable. Medstar Health has published a detailed flowchart of their process for the bill waiver process that shows the complexity, and can be used as a starting point for other organizations. ¹¹

Many barriers exist currently that need to be overcome to advance financial harm reduction. First, there can be concern that the financial impact of waiving these charges could be substantial, given the rates of harm that occur in hospitals. However, implementation of CRPs with a robust process for holding and waiving bills has been shown to reduce overall litigation costs ¹² and claims. ¹³ Ultimately, these processes should be developed to reinforce that patients should be held harmless when preventable harm events happen. Second, there is a lack of clarity about who should pay for the follow-up care, what the duration of follow-up is, and how to manage this complexity. Guidance could be developed to determine what payers versus health systems need to pay going forward. It is complex, given that future care may not even occur at the system where the harm occurred, but organizations such as The Leapfrog Group, a nonprofit that focuses on safety, quality, and transparency, are actively working through these issues. Leapfrog has published high-level recommendations for holding bills for serious reportable events ¹⁴ and is currently convening a multistakeholder group (including payers) to identify best practice guidance around how to handle long-term costs (using the case example of wrong-site surgery; Missy Danforth, Senior Vice President, The Leapfrog Group, Personal communication June 2025). Third, holding bills can be challenging given all the varied billing sources; it is key to inform patients of the process and give them an easy way to notify someone about any bills they still receive despite best attempts to hold them. Often, organizations wait for patients to complain about bills and then waive the fees, which is reactive and inequitable. Organizations must create robust, proactive, and equitable processes, given that financial harm impacts are not the same for all patients.

Lastly, it has been challenging to create a return on investment for patient safety efforts, and this form of reduced revenue should incentivize investments in high-reliability safety practices to reduce harm in the first place. Investing in safety and high-reliability organizing is the foundation for preventing and mitigating errors. In addition, the benefits of building trust to retain patients and families for the long term should not be minimized. Loss of trust by billing for costs related to harm that we ourselves have caused is unacceptable.

Practical Recommendations

So how can health systems get started, given the complexity? First and foremost, leadership needs to be committed to reducing financial harm from preventable errors, measuring this harm, and making it visible. Then, create a multidisciplinary team (including safety, finance, billing, patients and families, and other key individuals) to create implementation strategies (Table 1). Particular focus can be placed on robust processes for identifying preventable medical error, identification and measurement of financial harm, mitigation strategies to reduce the likelihood of financial harm, including robust CRPs and multidisciplinary processes for waiving bills for preventable harm, and transparent communication with patients. In addition, organizations need to ensure that strategies are in place to reduce inequities. Consistent practices need to be in place for everyone and not just based on the ability to pay or the ability to file a complaint. Guidance from organizations such as Leapfrog and sharing of best practices and lessons learned will be essential going forward.

Table 1.

Organizational Approach to Financial Harm in Cases of Preventable Harm Due to Medical Error.

Measure and categorize financial harm.	Leaders cause financial harm to the organizational focus. Add questions about financial impacts to standard event analysis/root cause analysis. Ask patients about their financial experiences using surveys or focus groups. Develop long-term financial and emotional support for patients and families harmed by medical error.
Ensure clear policies for holding hospital and professional fees.	Create a multidisciplinary team with safety, risk, and finance professionals, patients, and families to create policies and manage the process for holding fees. Develop a process for ensuring downstream bills are held in cases of unexpected negative outcomes until the full analysis is completed, and then waived if determined to be a preventable event. Implement Communication and Resolution Programs to reduce litigation costs and ensure financial support. Ensure transparent communication with patients/families about the billing process. Develop a process to communicate and coordinate with payers for holding long-term bills. Create a fund to cover long-term expenses (potentially in partnership with malpractice insurers).
Become more proactive in reducing inequities.	Ensure that bills are waived for everyone impacted by medical error, not just for the most vocal, by ensuring that the holding of bills is occurring reliably for all.

Conclusion

Financial harm to patients from preventable medical errors must be addressed, just as we need to address the physical and emotional harm. A system meant to achieve health should strive for zero harm. And until we achieve that, preventable harm should not lead to financial harm that can have additional lasting impacts on the health and well-being of patients.

Supplemental Material

sj-docx-1-jpx-10.1177_23743735251383264 - Supplemental material for To Achieve Zero Harm, We Must Address Financial Harm

Supplemental material, sj-docx-1-jpx-10.1177_23743735251383264 for To Achieve Zero Harm, We Must Address Financial Harm by Tejal K Gandhi and Carole Hemmelgarn in Journal of Patient Experience