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A definition of medical errors cited by Neilipovitz (2005) denotes it as "Both as the failure of a planned action to be completed as intended or as the use of a wrong plan to achieve an aim, whether or not the error results in harm" (p. 28). Neilipovitz (2005) notes that it is hard to measure the extent of medical errors as a problem in the healthcare sector. This is in regard to the fact that some of the medical errors do not elicit unfavorable effects or outcomes hence are not easily identified. However, many fatalities have been reported over the past due to medical errors. In fact, Neilipovitz (2005) asserts that between forty four thousand and ninety eight thousand fatalities are reported in the U.S. per annum.
In order to explicate and understand the financial impact of medical errors in health service organizations, it is of significance to delineate the causes of medical errors. Medical errors according to the American Society for Healthcare Risk Management (ASHRM) (2011) may result from a number of factors such as ineffective communication, poor flow of information within a healthcare facility, inadequate staffing levels, as well as poor action plans and strategy implementation. These medical errors impact on all stakeholders and the society in general socially, physically, emotionally, and economically. According to Naylor (2002), more than fifty percent of medical errors are caused by prescription mistakes while more than thirty percent relate to how drugs are administered. For instance, if a physician does not have all the information relating to a drug, then he or she is more likely to give the wrong dosage, give wrong directions on how the drugs ought to be administered, and sometimes even give the wrong medication for a specific ailment. Medical errors may also occur when a physician does not take time to assess a patients medical history (Naylor, 2002).
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