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Definition of the Problem
Introduction
Risk management (RM) has been defined as the process of scheduling, classifying, directing, and managing organizational conduct in order to curtail the detrimental effects of fortuitous losses at reasonable costs on the organization.
Risk avoidance involves eliminating all losses associated with a particular activity, loss prevention involves reducing the chance of a mishap occurring, and loss reduction emphasize reducing the severity and impact of losses once they occur. Loss prevention techniques focus on reducing the frequency of occurrences likely to result in claims and/or lawsuits.
In health care, risk management has become an important issue during the 1980s and 1990s. The complexity of the legal environment has challenged institutions to strengthen the practice of health care to protect staff and hospitals from loss. Risk management is defined as the science for identification, evaluation, and treatment against the risk of financial loss. Risk management also envisages the evaluation and scrutiny of medical treatment to identify and circumvent injuries to patients. It is envisaged that in most cases of medical malpractices, In medical malpractice cases, the duty owed by the defendant physician arises from the physician-patient relationship (Shandell & Smith, 1990, p.1-4).
What risk management is about?
RM is concerned with utilizing key functional activities of the organization to reduce the detrimental effects of accidental losses on that organization at pre-judged and predetermined costs. Further, the scope of risk management can also be extended to include aspects of recognizing, assessing, and protecting against the risks of financial losses that may arise due to risk materialization.
Further, there have been paradigm shifts in the underlying causes of fundamental issues governing risks in patient management. While at one time, the safeguards against losses or damages to the financial strengths of health care institutions and the prevalence of a reliable treatment environment were considered paramount, this has now shifted in terms of greater need for preventing harm and injury to patients by offering them a greater degree of health care protection and adequate safeguards against injuries caused by neglect by concerned health care professionals.
Thus, it can be seen that over time, the onus has shifted from the health care organizations need to protect its health care environment from outside malpractice attacks to a more focused and perhaps narrower need to keep the best health care interests of the patient uppermost and to improve the quality of service and discharge all responsibilities vested upon the health care workers, which, it is believed would significantly reduce the occurrences of medical malpractice and issues connected therewith.
The industrys risk manager of today faces many new and exciting challenges. By conventional practices, the job focuses on safeguarding the pecuniary trust of the organization and preserving a secure milieu. Today, the focus has broadened to include preventing patient injury and improving the quality of service. The administrator and physician must now respond and increase the emphasis on a system that can monitor, promote and guarantee the quality of service. Their objective is to alleviate malpractice judgments, cut defense expenses, and manage the insurance premium.
Background of the problem
The rising number of malpractice cases was not being reduced through prompt and speedy disposal of those cases by concerned officials. The fundamental causes for these issues to surface included issues arising out of technology advancement in medicine, which carried with it higher risks of injuries; issues arising out of worsening relationships between physicians and patients; and, problems arising out of unrealistic demands made by patients about modes of treatment and their results.
The probability of medical errors increased with the larger number of people involved in inpatient care. Risk management is used to secure the financial assets of an enterprise against the risks of calamities by assuring adequate economic protection and security against perceived and imminent occurrences of liability through appropriate risk cover strategies, including insurance of property and thus alleviating the possibility of financial losses that may accrue.
The word liability is used in various ways, but the general definition would be the state of being exposed to damage, danger, expenses, etc. The professional liability of the hospital is an area of great risk and all hospitals must decide on the amount of coverage they will carry. Comprehensive loss and exposure information must be collected and the data analyzed before purchasing insurance coverage. To ease the malpractice crisis, state legislators enacted a variety of laws designed to establish limits on the number of awards, set up arbitration screening panels, revised the contingency fee systems, and modified the collateral source rules.
Problem statement
Medical malpractice received a great deal of attention in the early 1970s when a crisis emerged due to the lack of availability of liability insurance. Most insurance carriers increased premiums at alarming rates, and others stopped writing malpractice coverage altogether, thereby shrinking market capacity. The increased frequency and severity of malpractice claims were the primary factors precipitating these actions. Insurers found themselves unable to adequately predict the frequency of claims or to adequately price this line of insurance. Patients will have to bear the cost and detriment caused by the lack of proper care in the health care setting due to faults caused by medical malpractice in health care.
Purpose of the study
Purpose of study
The purpose of this study is to consider the aspects of medical malpractices in a closed environment of Wayne State University Physician Group affiliated with the Detroit Medical Center Hospitals in Detroit, Michigan.
Research Questions
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Whether trusted methods are available that could identify specific medical outcomes of medical malpractices or liability incurring thereon?
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What is the extent to which a risk management program and risk managers could make difference?
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Could gaps in physician-patient relations impact medical malpractice?
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Could a collapse in communication in a physician-patient relationship result in a malpractice case?
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How could physicians avoid diagnostic errors and lawsuits?
To prevent lawsuits against hospitals and to prevent further injuries to the patient, ensure compliance with state insurance departments. Risk managers must develop a close working relationship with the persons who provide hands-on patient care. These professionals are often the first to realize that an untoward event has occurred. Risk managers must establish an open line of communication so that he or she is advised of events as soon as possible. Risk managers must develop an occurrence reporting system that these professionals understand and are willing to utilize.
Assumptions/Limitations
The study subject will be limited to Wayne State University Physician Group (WSUPG) affiliated with the Detroit Medical Center Hospitals in Detroit, Michigan.
Definitions
Summary
Risk Management has become a growing concern of all hospital administrators since the 1970s. Whether the institution is profit-motivated or not, it must be fully protected from loss to remain competitive in the health care industry. A program must be established, personnel must be educated, legal strategies must be planned, and insurance protection must be ensured. The goal is to provide quality service to the patient and to avoid negligence. The hospital should be a safe place for treatment and improving health, not a hazardous environment that creates further harm or injury to the patient.
Literature Review
The industrys risk manager of today faces many new and exciting challenges. According to custom, the work entails maintenance of the financial stability of the institution and upholding secure surroundings. Today, the focus has broadened to include preventing patient injury and improving the quality of service. The administrator and physician must now respond and increase the emphasis on a system that can monitor, promote and guarantee the quality of service. Their goal is to reduce malpractice verdicts, cut defense costs, and control the insurance premium.
Some of the findings showed normal circumstances within the study, but not all injuries were due to negligence, and not all injuries were preventable. Due to deficiencies in prevailing systems, nearly 30% to 40% of mortality among stressed patients could be due to avoidable issues in medical attention, taking into account a wrong diagnosis and delay in providing treatment (Acute care, disability, and rehabilitation, 2006, para.1).
These findings were based on the results of studies concerning the incidence of injuries. More findings prove that the severity of the injury was more apt to be the determining factor in deciding whether a claim would arise. In conducted studies, it is seen that early research is suggestive of the fact that disabled people may not have the longevity and inferior wellbeing as they become older than people who have not been diagnosed with any kind of physical or mental inabilities (Acute care, disability, and rehabilitation, 2006, Priorities, para. 32).
The American Hospital Association (AHA) gave guidance and it helped promote the acceptance of risk management. Across the country, hospitals are quietly improving the way they provide health care services and medical attention (Umbdenstock, 2009, para.1).
Risk management entails the identification, assessment, and taking of corrective measures against threats and challenges caused by fiscal indiscipline and, inter alia, has issued directives to hospitals to enforce risk management practices as a viable solution for the impaired provision of health services.
All medical activities that can lead to injury or death of any person, or damage to or loss of property, material, or reputation must be systematically managed regarding risk (Grose, 2005, para.1). This could be seen as being within the scope of risk management.
Risk management also outlines the basic elements of the program and directs that the manager be someone whose training or background was in hospital administration, insurance, or safety engineering. This guideline also stipulated essential components necessary for an effective program. This description listed mandatory requirements but left space for modification that would be dependent upon the unique characteristics of the individual hospital.
The steps of risk management are simple and straightforward:
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Identify the risk
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Analyze and evaluate the risk
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Control or eliminate the risk
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Protect the agency and the consumers of its services
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Manage any failures (Risk management: The steps of risk management, 2002, para. 1).
In its simplest form, risk management in health care has historically focused on providing a safe environment for hospital patients. With the formation of health care systems in recent years, the scope of risk management now expands beyond the inpatient setting. Organizations have affiliated components that provide not only acute care hospitals but also the outpatient, home care, and long-term care that patients require.
The new structure of health care delivery systems brings with it the obligation to increase the scope of risk management. Thus, establishing expectations is a first step in defining and delivering quality care and services and minimizing risk in the environment of long-term care (Peterson, 2005, para. 1). Broadening the focus of patient care is also a risk management initiative. Research has emphasized the need for recognizing that risk management now means, the comprehension of the entire gamut of care and devising ways and means by which these could be improved. Normally, patients may receive a range of care in multiple settings from multiple providers of care.
The continuum of care needs to be the central theme of patient care, as paradigm shifts occur, new policies are enforced or the standards of care are upgraded and refurbished to meet varying needs and demands of patient care.
An effective risk management program covers all aspects of hospital operations. To achieve this goal, managers must establish early warning systems, target clinical areas or practices that present the greatest exposure to liability, and implement preventive action to minimize the risk associated with these activities. Several professional regulatory agencies and other industry associations have worked hard to improve the quality of care provided in nursing homes (now called nursing facilities), the administration and governance of those facilities, and in turn the reputation of the overall field (Pratt, 2009, p.73).
Risk management is primarily designed to protect the financial assets of an organization by assuring adequate financial protection against potential liability through appropriate insurance coverage, reducing liability when untoward events occur, and preventing those events that are most likely to lead to liability.
The term Liability may be defined in various ways, but a general definition would be the state of being exposed to damage, danger, expenses, etc. The hospitals professional liability is an area of great risk and all hospitals must decide on the amount of coverage they will carry. Comprehensive loss and exposure information must be collected and the data analyzed before purchasing insurance coverage.
First of all, it is necessary to analyze the gross patient service volume, with relation to inpatient and outpatient visits, and also determine the number of employees on staff, including full/part-time employees. It is also necessary to review any case history of previous losses and identify the number of legal expenses paid therein. Evaluating loss projections: this can be accomplished in three steps.
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Determine the frequency and magnitude of the loss, the nature of the injury sustained is the best predictor of the value of a loss;
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Adjust frequency averages to reflect significant future changes in hospitals risk climate; and
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Review the accuracy of loss payout estimates.
This is to include the settlement amount and the cost of the investigation, and defense for both paid and reversed cases. A skilled attorney should be retained for a second opinion as to the estimates of case values.
No one can estimate the amount of coverage an institution should carry, because each case differs in each area of care. Larger amounts of fund payouts are needed for meeting lawsuits awarded in court settlements. After the data has been analyzed, a risk manager would prepare for the future loss by purchasing insurance. Most hospitals overkill the expected loss projection and settle for the purchase of a premium that protects against catastrophic settlements and payoffs which are in the millions. Insurance coverage is paid for protection; the risk manager can further protect the institution by ensuring all health care providers work towards preventing loss within the institution.
Risk managers are responsible for developing systems to prevent injuries and other losses within the organization. Performance improvement actions are often initiated in response to suggestions offered by the risk manager. Education is also an invaluable tool in risk management and sometimes is the only activity required to prevent potential safety problems. Patient care and accessibility to mental health services rest not only on clinical skills, but on a place to practice them and an organized system supported by staff, physical facilities and funding (Reid, D J., & Reid, W H., 2009, Abstract, para. 1). Risk managers in many healthcare organizations are responsible for developing policies and procedures aimed at preventing accidents and injuries and reducing the organizations risk exposure (Johns, 2002).
The specific policies and procedures that constitute a risk management program in a hospital are developed in collaboration with the hospitals legal counsel. Judicial interpretation of statutory law in the court system is a continually evolving process and hospital leadership and governance are well-advised to seek the advice of counsel to ensure that risk management practices adequately protect the organization. Generally speaking, the infrastructure of a risk management program is designed to circumvent, or alleviate monetary setbacks, allocate funds for compensation and/or damages, and also clear the corporate image impediments caused by legal claims and lawsuits.
Prevention is a critical aspect of any effective risk-management program. Staff members need to be provided with the right kind of training and exposure to deal with emergencies, which may not be the result of their actions.
In summary, risk management has become a growing concern of all hospital administrators since the 1970s. Whether the institution is profit-motivated or not, it must be protected from loss to remain competitive in the health care industry. A program must be established, personnel must be educated, legal strategies must be planned, and insurance protection must be ensured. The goal is to provide quality service to the patient and to avoid negligent acts. The hospital should be a safe place, not a hazardous environment that creates further negligence.
Sentinel Event Statistics
This part of the study shall examine events that have a high capacity for attracting liability or cause for damages that result in lawsuits. It shall also consider ways and means by which these incidents could be prevented. According to the cases reviewed by the Joint Commission of Sentinel Event National Statistics as of June 30, 2009, there could be many kinds of surgical errors or delays that could harm, or cause death to patients, and thus give rise to criminal or civil proceedings for medical wrongdoing. High on their lists are wrong-site surgeries (13.4%), suicides (12%), operative and post-operative complications (11.1%), and delay in treatment (8%). (Appendix 1 and 2)
It would be presumptuous to blame for all kinds of errors on health care providers. However, errors caused while transfusing fluids, errors while administering injections and anesthesia, deaths caused by ventilator malfunctions, etc., do come within the purview of due services to be rendered by health care providers. Thus, they would be liable for potential legal action, at the choice of the aggrieved patient or their families.
The authors took up an empirical study on the aspects of care of patients undergoing treatment in three sections of a large urban teaching hospital. Of the total 1,047 patients being considered, 185, representing 18% had, at least one serious unfavorable consequence. The rate of such unfavorable consequences increased with the patients length of stay. There is a 6% probability of adverse effects increasing with every day the patients stay in the hospital. The highest incidence of mistakes (28%) occurred during the surgical intervention and daily care. During surgery, it was 10%, and intensive care patients were most likely to have critical impediments caused by medical errors (Annotated resources: Sentinel events, 2009, para. 3).
It is anticipated that there will be an increase in the findings of medical negligence against physicians as a result of the change in standards for the evaluation of medical negligence (Medical professional liability insurance trends in Asia; Malaysia, n.d., p.3).
The increase in such cases is a cause for major concern since these incidents could trigger off suits of medical malpractices, especially if large-scale death or injury is involved.
Omissions and delays
In a typical medical malpractice case, the onus would be on whether the mistake(s) made by the nurse amounted to deviation from standard care and caused harm and detriment to the patient, or direct cause of death to the patient (White & Traux, 2007, p.63). In the event, the nurse was employed by doctors as an agent, or member of the group, these doctors or groups would also be legally held responsible for the injuries caused to the patient.
Utilization Management and Risk Management
Utilization Management (UM) may need to be integrated with Risk Management (RM) so that coverage of aspects such as, insurance reimbursement billing and hospital stays (typically UM functions) work in harmony with patient omissions and delays in treatment, medical malpractices, and its aftermath (typically RM functions). It is believed that in most scenarios, importance to RM may not be possible, mainly due to staff shortages, and also due to the non-critical character of its activities; thus, RM and UM must work together, to enhance the quality of treatment, eliminate or significantly reduce aspects of medical malpractice and so on.
Medical Malpractices Jury Trial Verdicts
However, it was also seen that of the medical malpractice verdicts by jury considered during the calendar year 2008, of the total of nine verdicts, eight have gone in favor of the defendants, and only one has gone in favor of the plaintiff, or the aggrieved party. This was a case involving misdiagnosis, which was settled for an amount of $2,200,000 (Medical malpractice jury trial verdicts (January 1, 2008- December 31, 2008, n.d.).
Next, it is necessary to consider the benchmarks that need to be achieved under the Operational Risk Management & Safety Assessment (ORM&SA), laid down by Wells Fargo Healthcare Group. The modus operandi for conducting such assessment would be in terms of assessing present compliances and how deficiencies in the present system to make it congruent with desired levels could be achieved. The assessment would also include compliance audits and in-depth questionnaire-aided assessments in major functional areas of health care.
Enterprise Risk Management
Again, Enterprise Risk Management (ERM) forms a major area of public and governmental accountability, including in its scope, management of emergency room, infection control, laboratory, blood bank, and transfusion controls. Again, critical areas where risks of medical malpractices could be high are obstetrics, radiology, anesthesiology, and oncology, and pain management. This is more sharply accentuated in geriatrics and post and pre-natal interventions.
According to the Wells Fargo Healthcare group, a detailed and comprehensive view of all medical and patient-related aspects of patient care must be made. According to them, The purpose of this Operational Risk Management & Safety Assessment (ORM & SA) is to assist an organization in determining how prepared it is to retain risk as well as determine if the care that is provided to the patient meets established standards of care and other recognized benchmarks (Wells Fargo Healthcare, n.d.).
Aspects that influence quantum of coverage
Many aspects need to be considered while taking up the question of medical malpractice in the hospital setting. For one thing, hospital administration needs to decide upon the amount of coverage that it needs to carry and this has to be laid out on a scientific and deterministic basis. For another, the coverage would depend upon several variables, which may depend upon controllable and uncontrollable factors. The major aspects that need to be covered would be gross patients and their service volume, including a breakdown of inpatient and outpatient statistics. It is also necessary to find out the number of employees, including health care professionals whose conduct could have an impact and make it subject to risks of medical malpractices.
Legal history could dictate future trends
It is evident that before a risk management program is set into place, the history of medical risks and their settlement in the context of the institution needs to be identified and assessed. It is necessary to know cases of previous litigation regarding medical malpractices that have been instituted either against the institution or against any of its constituent practitioners. If so, it is also important to know how these issues were dealt with and the extent, or amount of damages that were made by the institution, or its represented insurance agencies, or firms. This aspect is important since this would bring out the public image that is associated with this particular health care center.
Importance of public image in health care settings
It is common knowledge that, to a very large extent, the survival and growth of public health care institutions depend largely upon the public image and goodwill that it has earned over years of providing health care services to patients. However, even a few instances of medical malpractices by its constituted agents, or health care providers would be enough to earn disrepute, which could significantly impact its image and potential prospects, since few patients would be willing to visit health institutions where the medical services are compromised or neglected, inviting legal complaints and actions.
Thus, many factors impinge upon the aspect of medical malpractices, which cannot be seen in isolation but has to be seen in the context of the individual case studies. The importance of a proper methodology for seeking out how best these issues could be addressed would form the next part of this paper.
According to the practicing physicians at Wayne State University Physician Group (WSUPG), the responsibility for controlling medical malpractices vests with the profession itself (Prognosis E-New: Fieger, Howard debate merit of health courts, 2005). According to the physicians, there are reasons to believe that health courts could be the best place where medical malpractice issues could be sorted out.
The judges have well acquainted with Medical Malpractice (MM) laws and with the help of unbiased observers, the judgments for such cases would be reasonable and in the best industry practices. Besides, the fact that WSUPG sets high professional standards of medical practices could lower the rates of such malpractices and move toward a more transparent and patient-oriented system of care provision.
Data Analysis
Introduction
Since January 1989, the Joint Commission on Accreditation of Health care Organizations (JCAHO), an autonomous agency that assesses and evaluates the performance of Health Care institutions and programs in the length and breadth of the USA, has enunciated benchmarks for patient safety. Although JCAHO benchmarks are not key drivers in risk management, nevertheless, there is evidence to prove that these ethical and commercial elements are critical to any strategic planning models concerning risk management. Through this, JCAHO provides an excellent vehicle for creating a culture of patient safety and welfare.
The goal of risk management is to reduce an entitys accidental loss of corporate assets, personnel, revenue, and reputation. Each organizations risk management plan should include the following components: the plans objectives, key elements, responsibilities, methods, and areas of focus for the current year.
Risk Management Plan
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Objectives: The main aim of the internal regional medical monitoring unit is to supervise risks to reduce losses, protect resources and assets and also ensure security, safety, and stability of condition of staff members, care providers, patients, and visitors. This could be in terms of a separate unit that has been given the responsibility of taking care of the above-mentioned aspects, thus allowing other care-providing units and departments to carry out their normal routine functions.
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Key Elements: Risk management involves several key elements. The methods for implementing these elements are described later in this document. The key elements are identifications of risk issues, evaluation of areas of risk, communication of risk information, education of organizational personnel and others, and reduction of risk.
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Responsibilities: The risk manager will be responsible for managing risk management activities.
These activities include:
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1. Coordinating insurance coverage.
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Managing claims against the facility.
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Interfacing with legal counsel.
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Identifying and analyzing areas of risk exposure.
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Considering and proposing suitable peril management practices.
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Mounting and upholding an information supervision scheme.
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Executing and observing security, teaching, and quality assertion agenda.
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Inspecting, detailing, and observing risk management data and information.
Although the risk manager has the responsibility for this plan, risk cannot be reduced without education and participation by all team members. All team members are expected to report events, follow standards of practice, identify risk events, guide the organizational mission, implement systems to reduce risks, and budget monies to solve problems. Risk managers will be available to consult with any department or manager to assist in a risk assessment of the environment or system. Risk managers will also research issues and gather additional data to assist decision-makers in the search for solutions. This research may include local, state, or national data.
Methods for Carrying Out Key Elements
Identification
The methods of identification include, and are limited to, incident reports, medical device reports, customer comment tracking forms, attorneys health records requests, security reports, performance improvement referrals, medical staff/peer review reports. Safety hazard reports, supervisor reports, documentation by staff and/or phone conversations with individuals who feel a need to speak about issues, and visual inspection of all areas of the organization to identify potential risk situations.
Committee membership and participation are essential for risk identification. Risk managers will assist i
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