As the healthcare industry constantly evolves and “return on investment” remains a focus, it is becoming more imperative that risk managers allocate their budgets in areas that have the greatest impact on mitigating claims and litigation.
Fortunately, The Sullivan Group has the luxury of working with many large, sophisticated, self-insured hospital systems as well as smaller single-site facilities and physician groups. This experience has helped us identify four key areas that an organization should consider when developing its loss prevention strategy.
1) Focus on Patient Experience
Although this topic has been relevant for quite some time, the Affordable Care Act amplified the importance of patient satisfaction by incorporating HCAHPS into the Hospital Value-Based Purchasing Program (which impacts reimbursement). Also, there has been a pretty well adopted belief as well as literature to support the notion that happy patients are less likely to bring litigation. By investing budget dollars in this arena, hospitals can impact both their reimbursement and hospital professional liability.
Target the Areas of Highest Risk
2) Diagnosis-Related Adverse Events
Despite being one of the most difficult areas to tackle, preventing diagnosis-related errors stands to have the greatest impact on a hospital’s loss profile. Many closed claims studies have been published that point to the failure to diagnose or delay in diagnosis as the most frequent and expensive malpractice claim in the Emergency Medicine, Hospital Medicine and Ambulatory environments. Factors contributing to these losses include cognitive errors, gaps in communication, and lapses in vigilance and memory.
Fortunately, there have been many success stories presented at national forums on the significant reductions that many hospital systems have experienced after implementing a sustainable, multi-faceted program targeted at the largest drivers of patient morbidity and mortality. In some cases, these success stories led to their captive repatriating tens of millions of dollars back to the hospital system for reinvestment into other initiatives.
While diagnosis-related adverse events can be broad and cover many medical conditions, Obstetrics-related adverse events tend to be more focused in a few key areas; these include electronic fetal heart rate monitoring competency and appropriate oxytocin intervention, preparedness and response to obstetrical emergencies, and identifying and managing postpartum hemorrhage. That said, these areas can be remarkably complex and merit a sustainable training program for all clinicians. Although these adverse events tend to be less frequent than diagnosis-related events, prevention of one claim over a ten-year period can make a significant financial impact.
4) Teach Communication & Resolution
Having a strong “last line of defense” can be instrumental in preventing financial losses and expenses from litigation. Developing and designing a comprehensive communication and resolution program has been effective for many institutions across the United States for the last 15 years. If your state laws are friendly towards this strategy, hospitals and physician groups should consider training their clinicians to “empathize without admitting fault”, and administration needs to be coordinated in setting expectations and follow-up.
Customizing Your Loss Prevention Strategy
The most effective loss prevention programs are those that address their individual risks. Some might choose to prioritize areas in which a recent near-miss or malpractice claim occurred, and that’s certainly a sound strategy.
While every organization is unique, focusing in these four areas builds a solid foundation for any loss prevention program. Start by emphasizing strong provider and nursing communication with a Patient Experience Program that can have a dual benefit of impacting reimbursement and improving overall patient care. Then, target reductions of risk in two of an organization’s most vulnerable areas: diagnosing departments and Obstetrics. Finally, create a last line of defense with a strong Communication and Resolution Program.