Lowering Malpractice Risk through Disclosure

by Holly Hayes

The University of Michigan Health System implemented a system to respond to patient injuries and medical malpractice claims and has “lowered its average monthly cost rates for liability, patient compensation, reserves, and non-compensation legal costs” as well as reducing “its average monthly rate of new claims from 7.03 to 4.52 claims per 100,000 patient encounters, decreased the average monthly rate of lawsuits from 2.13 to 0.75 per 100,000 patient encounters, and reduced the time between claim reporting and resolution”. The new system was implemented in mid-2001 and early 2002. The full report by Richard C. Boothman, Sarah J. Imhoff and Darrell A. Campbell JR can be seen in the Spring 2012 edition of “Frontiers of Health Services Management” an American College of Healthcare Executives (ACHE) publication. Click here for ACHE member sign-in.

At the beginning of the new approach, the University of Michigan Health System (UMHS) communicated with the plaintiffs’ bar and the Michigan courts. During the first year of the program, plaintiffs’ lawyers changed the way they approached UMHS about claims. Currently, they openly engage UMHS before any claims are asserted and before a suit is contemplated. This level of dialogue allows plaintiffs’ lawyers to make better choices about the cases filed and allows UMHS to resolve most claims without litigation.

Before implementation of the new system, UMHS frequently settled non-meritorious cases (cases where UMHS felt the standard of care was met). Since the adoption of the principled approach, the non-meritorious settlements has decreased significantly. The meritorious claims, those where UMHS agrees the standard of care was not met, make up the majority of settlements. While the overall lower claims numbers result in claims savings, of major importance is the clarity from analysis of errors which presents opportunities for positive change across the system. The authors state, “We can delve deeply into the remaining claims for patterns to strategically target those areas in which errors have occurred to further reduce the number of claims through patient safety improvements.”

In summary,

The UMHS can no longer blame predatory lawyers and opportunistic patients for its malpractice losses. Isolating legitimate claims allows the health system to precisely examine patterns of behavior, staff members, and processes that signal fixable problems. The UMHS can at least put a partial price tag on the cost of failure to provide patients the quality of care they deserve. This engenders a sense of accountability and a greater sense that the health system can control its malpractice costs through improvements in patient safety. The link between patient safety and medical malpracatice has historiclly been elusive for most institutions; one of the most salient benefits derived from the Michigan Model is the graphic demonstration of that clear link, which is often obscured by the noise of litigation over complications that arrive in spite of reasonable care.

We welcome your thoughts on the Michigan Model and the benefits of disclosure in health care.

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Holly Hayes is a mediator at Karl Bayer, Dispute Resolution Expert where she focuses on mediation of health care disputes. Holly holds a B.A. from Southern Methodist University and a Masters in Health Administration from Duke University. She can be reached at holly@karlbayer.com.