By Glenn Day
While the year is still young, now might be the time to take a close look at your hospital’s policies and procedures to assess how well you’re managing your medical professional liability risks
The rising severity of losses is creating market pressures that could well mean higher premiums or reduced coverage for healthcare organizations who aren’t prepared. If your insurance carriers can’t make an underwriting profit at current rates, they will look closely at your hospital’s policies and procedures in order to assess risk. Are yours sufficiently strong? Are they diligently followed? It’s essential that you make a compelling case to demonstrate your favorable risk profile in order to avoid rate increases and/or new terms and conditions that are less favorable to you.
Medical professional liability insurance accounts for about half of a hospital’s casualty insurance costs each year. It’s an area of ongoing concern as a factor that drives healthcare costs in total. Data paints the picture:
- The National Association of Health Underwriters has estimated that medical malpractice costs add between $55 billion to $200 billion to healthcare costs annually.
- Costs of medical liability and defensive medicine combined account for 7.2 percent to 12.7 percent of increasing healthcare costs.
- When it comes to claims under medical professional liability policies, the good news is that frequency is on a continuing decline that seems to be bottoming out, but is still expected to be down by 1 percent in 2018. Unfortunately, claims severity is heading up by 2 percent annually.
All told, your best protection against the risks that play a role in these trends is to undertake a thorough examination of your policies, procedures and practices to make sure yours measure up. Areas that have the greatest impact on your medical malpractice insurance include:
- Loss history. Reviewing a long-term loss and incident history is enlightening for trends and patterns showing breakdowns in policies and procedures or where new ones are needed. The more finite the data, the more precise one can be in finding departments in the hospital that may need a closer look. There’s an emerging trend of more large catastrophic claims and batch claims involving multiple patients. It suggests that such losses ultimately are rooted, as one hospital risk manager tells me, in a failure of individual accountability to the patient, the team, and the organization in delivering high quality healthcare in a hospital setting.
- Procedural review policies. This is also important to guard against errors, like wrong-side surgeries or instances where a tool or a dressing is left in the surgical wound. Detailed checklists today are standard operating procedure. When these are thoughtfully developed and consistently used, negative outcomes can be reduced and liability lessened.
- Processes for managing hospital patients outside of surgery. This could extend to how patients are informed about post-surgical costs, like physical therapy. One study showed that getting hit with unexpected and unexplained costs led to more malpractice claims by disgruntled patients. Another process revolves around who manages things if a patient starts crashing after a procedure. Hospitalists – or doctors who specialize in hospital patients – are increasingly utilized to communicate immediately and directly with the primary physician and handle issues quickly, cutting down on medical malpractice claims.
- Charting and documentation. This is a critical function for more than just quality assurance and efficient claims processing. Medical procedures need to be listed to prove that they were done. Plus, they provide a powerful paper trail to counter patients who don’t follow advice or those who come back with the same complaint without improvement.
- Claims-handling, pre- and post-lawsuit. This is a big test of an organization’s risk posture. Mistakes are made. The best thing it can do is step up, address them, and try to resolve them favorably with the patient. It’s worth noting that people are less likely to sue a medical professional with whom they’ve established a friendly, ongoing relationship. Further, while apologies once were strictly forbidden by medical professionals accused of malpractice, the “sorry” laws enacted by a number of states have been shown to have a mitigating effect on both lawsuits and on jury response.
Hospital systems and the professionals who work there are under constant pressure to provide top-notch quality of care. It’s a challenge as they grapple with hurdles that can affect optimal outcomes. They need to effectively deal with issues like the growing shortage of physicians. Fiscal pressures, like the costs of charity care, are unrelenting.
Staying current and complying with regulatory change is an ongoing burden. But those that maintain an aggressive posture toward risk control will put themselves in an enviable position for quality outcomes – on every front.
HUB International’s team of professional brokers has deep experience in the healthcare risk environment. Our assessments of hospital policies and procedures are instrumental in helping your organization mitigate your risks.