More than 1.5 million Australians experience problems with their medications annually, resulting in 400,000 visits to GPs, 140,000 admissions to hospitals and 'significant' costs.
Each year 200,000 Australians get infections such as golden staph associated with their treatment.
The figures are from Windows into Safety and Quality in Health Care 2008, a report issued yesterday by the Australian Commission on Safety and Quality in Health Care.
The commission's chief executive, Professor Chris Baggoley, said there were clearly ''safety challenges in health care.'
'It would be nice to think that health care would be trouble-free but even ... our own illnesses are complex.
'What we need to do is take advantage of [the] best systems to improve that.'
Health departments report so-called 'sentinel events' where procedures are performed on the wrong patient or body part, an inpatient commits suicide or patients need a second operation to remove instruments or material left inside their bodies during the first operation.
Other sentinel events are when babies are sent home with the wrong family, women die or suffer serious complications during childbirth, patients are given the wrong blood type or they die because of medication errors or gas embolisms in their blood vessels.
In 2006-07, public hospitals recorded 257 sentinel events almost 120 more than the figure for 2005-06.
The most common mistake involved procedures performed on the wrong patient or body part, according to the report.
Almost 70 per cent of private hospitals had voluntarily reported sentinel events, the number increasing from 44 to 67 between the two reporting years.
The report says, 'Improving patient safety is a concern for both public and private hospitals in Australia, and obtaining information from adverse-event reporting, analysis and investigation is an important part of achieving this.'
But these events were only a sample of the 'large number' of incidents reported, investigated and analysed every year in the health system.
For instance, 11 patients died from the consequences of medication errors in 2006-07 compared with only five the previous years.
'[But] sentinel event reporting only captures a tiny fraction of adverse events attributable to medicines,' the report says.
'It is estimated that over 1.5million Australians suffer an adverse event from medicines each year, resulting in at least 400,000 visits to general practitioners and 140,000 hospital admissions.
'The cost is significant. Cost estimates for medicine-related hospital admissions were $380 million in 2002.'
Professor Baggoley said medication safety could be improved with the introduction of electronic prescribing and electronic medical records.
'They'll help reduce miscommunication if we could link data [and] learn more about what happens when medications are used: that would also make a difference.
'We have to be cleverer than the problems that confront us. ... We are clever people. ... we need to standardise as many processes of care as we can.'
A reader posted on the website of Canberra Times, "I went to a Canberra Hospital recently by ambulance, after having severe chest pain. I had already had heart surgery, so no other medical history was taken from me, despite my efforts to give it. I was released after being told my tests (including chest x-ray) were clear, and my heart was fine. I still had chest pain and felt terrible. Three days later, on a Sunday morning, the hospital rang to say they made a mistake - my chest x-ray showed I had pneumonia!!! Pretty obvious that they were so busy looking at my heart that they didn't think to look for anything else. If they had taken my history, which included several bouts of pneumonia, perhaps things would have been different. It frightens me to think what could have happened if I had continued on untreated."