Who Wins When Medical Malpractice Claims Are Filed?

Screen Shot 2013-10-28 at 6.43.08 AMThe Doctors Company (TDC) and their Foundation (TDCF) have been committed to medical education for many years. They have been the major supporter of our annual Telluride Patient Safety Summer Camps for medical and nursing students the past four years, providing full scholarships to sixty medical and nursing students last year so they could attend this week-long immersion in safety, quality and transparency.

I have been honored the past two years to be invited to attend TDC Annual Advisory Board Retreat. The retreats have become a favorite meeting of mine, as well as one of the best educational meetings I have attended. One of the presentations I enjoy hearing most is given by Dr. Richard Anderson, the CEO of TDC, who opens the meeting with an update and discussion on the current medical malpractice environment. Dr. Anderson shares claims data along with insightful narrative so that a “novice” to the medical malpractice industry like I am can understand and appreciate the challenges healthcare really faces today.

A couple of numbers he shared this year really hit me:

  1. The average cost of a claim at TDC is $97,000
  2. 82% of all claims filed do not result in any payment to the patient and/or family

A couple of things came to mind as I reflected on those two facts. First, where is all that money going? If the $97,000 isn’t going to patients or families, who was it going to? Who was getting all that money? The second thing was the pioneering work done by Rick Boothman, Susan Anderson, Skip Campbell and others at the University of Michigan highlighted in the article entitled Liability Claims and Costs Before and After Implementation of a Medical Error Disclosure Program. After full implementation of a disclosure-with-offer program at the University of Michigan, Boothman and colleagues observed:

  1. Decreases in the monthly rate of new claims from 7.03 per 100 000 patient encounters to 4.52
  2. Declines from 232 lawsuits (38.7 per year) to 106 (17.0 per year)
  3. Declines in median time to claim resolution from 1.36 years to 0.95 year

They also appreciated decreases in monthly costs associated with total liability, patient compensation, and non–compensation-related legal costs. Through an open, honest, timely and effective communication approach to unanticipated outcomes, they were able to successfully start addressing the excessive costs Dr. Anderson referred to associated with liability claims.

Maybe there is a better approach to the “deny and defend” model we have seen used through the years.

One additional figure Dr. Anderson shared also hit me hard this year. The number of claims filed asking for compensation above $10,000,000 has tripled over the last year, with the total claim pool going from $400,000,000 to $1,200,000,000 in total costs in just twelve months. Even gas prices haven’t risen that fast. Has the severity of patient harm suddenly tripled over the past year or are there other factors contributing to this sudden escalation?

If interested, The Doctor’s Company website contains numerous healthcare, patient safety and risk reduction resources. Click here for more information.

One Comment on “Who Wins When Medical Malpractice Claims Are Filed?”

  1. Hi, Dave,

    Great post…I just got home from the ASHRM meeting in Austin, TX and while there heard the AON benchmark study on med-mal liability. According to AON, frequency is flat but severity is increasing, and the biggest increase for severity are the expenses such as legal fees, witnesses, etc.

    Every risk manager I’m talking to these days says their numbers – claims and associated litigation expenses – are dropping with disclosure. They all tell me their numbers are mirroring Michigan’s data. So, while there is much work to do, there is also reason for hope.

    All the best,

    – Doug

    Doug Wojcieszak, Founder
    Sorry Works!
    PO Box 531
    Glen Carbon, IL 62034

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