Hospitals face risk management head-on

WASHINGTON – When the landmark 1999 Institute of Medicine report To Err is Human revealed that tens of thousands of people die each year from medical errors, the news was not a surprise to the profession, said Elizabeth Summy, executive director of the American Society of Healthcare Risk Management (ASHRM).

The news, however, drove hospitals to articulate to themselves, policymakers and the public how they could contribute to delivering safer quality healthcare services, she said.

Hospitals took to proactively surveying their risk and protecting against any liability. The focus on risk management (RM) is especially keen, given the “incredibly slim margins” on which hospitals are operating, said Summy.

Risk managers and chief risk officers (CROs) have since taken on a larger role, impacting their hospitals’ financial picture. Risk managers and CROs wear many hats, overseeing patient safety and clinical malpractice; business processes, including workers compensation and business interruption; and financial management, processes and strategies.

The University of Michigan Health System has developed a proactive RM program based on “common sense,” said Richard Boothman, JD, chief risk officer. His more than two decades of experience as a trial lawyer defending healthcare providers taught him that learning from patient complaints could reduce future patient claims for UMHS.

Commitment to improved patient safety, accountability and patient communication is the major reason why UMHS has seen a huge drop in claims, claims to resolution and outside attorney fees. “We don’t wait for litigation to happen,” he said.

Patient complaints are routed to quality improvement measures and peer review opportunities. Claim decisions are dealt with under UMHS’s set of principles:

1. We will compensate quickly and fairly when inappropriate medical care causes injury.

2. We will defend medically appropriate care vigorously.

3. We will reduce patient injuries (and therefore claims) by learning from mistakes.

Since August 2005, the medical center’s claims have dropped below 100.

“Our average claims processing time dropped from 20.3 months to 9.5; total reserves on medical malpractice claims dropped by more than two thirds; average litigation costs have been more than halved,” Boothman said.

He did not employ risk management consulting firms or technology, but relied on his past expertise and contacts. “It was a lot of hard work,” he admitted, but it paid off, with UMHS’ risk management initiatives being nationally recognized.

Stanford University Medical Center also has a well-known risk management program, with numerous patient safety initiatives. It’s headed by Jeff Driver, CRO of SUMC and executive vice president for SUMIT.

Working with RMF Strategies, a subsidiary of the Risk Management Foundation of the Harvard Medical Institutions, Stanford uses accident causation taxonomy to analyze its closed claims. “This allows Stanford to understand from a very fundamental perspective, exactly what driving forces are behind human and financial losses,” Driver said.

The Stanford University Medical Indemnity & Trust Insurance Company (SUMIT) is the captive liability insurance company that covers medical malpractice, general, employment and miscellaneous liability of the entities and employees of Stanford’s numerous medical facilities.

SUMIT premiums are 15 percent to 40 percent below market, allowing it to invest part of that premium on RM initiatives to reduce financial loss. “Success in these efforts breeds financial success, which therefore causes a continuous performance improvement cycle,” Driver said.

Stanford’s two cornerstone safety initiatives rely on technology. EMMI Solutions provides an online education system that facilitates communication between patient and physician. “Studies show that better informed patients have better outcomes and are less likely to pursue litigation,” Driver said.

Stanford Hospital and Lucile Packard Children’s Hospital employ on-site high-fidelity simulation centers to enhance physicians’ clinical judgment and technical skills.

Over the past three years SUMIT’s strategies have resulted in improved loss ratios.

“We can count hundreds of system improvements that have been designed to avoid accidents,” Driver said. “Patients are better informed about their procedures and clinicians are even better prepared for the complexities of providing medical care by receiving advanced training utilizing on-site simulation technology.”

Overall, Summy said, “Hospital leaders today get it. They understand that any incident creates a huge impact on the community.”

Despite the advances, Summy said the industry is “just scratching the surface” of risk management. 


Clinical/Patient Safety



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