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.

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