Does Voluntary Disclosure of Medical Errors Prompt or Prevent Medical Malpractice Suits?

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1 Does Voluntary Disclosure of Medical Errors Prompt or Prevent Medical Malpractice Suits? Lorens A. Helmchen School of Public Health University of Illinois at Chicago Institute of Government and Public Affairs University of Illinois

2 Patient Safety: Too Little Compensation, Too Little Deterrence Medical errors are costly mostly for patients Preventing medical errors is costly mostly for providers For compensation, patient must prove provider s negligence: (1) they suffered an injury (2) that was caused by the provider s (3) substandard care. Results in: long time to reach trial verdict uncertainty about trial verdict very high overhead: For every dollar spent on compensation, 54 cents went to administrative expenses (lawyers, experts, and courts). (Studdert et al 2006) too few lawsuits, most cases settle too little compensation (especially for small cases) too little deterrence: providers do not bear full cost of error

3 University of Illinois Medical Center at Chicago large, urban, tertiary-care academic medical center ~ 20,000 patients discharged per year > 40% admitted via Emergency Department about half either uninsured or on Public Aid quarter of patients seek care related to pregnancy, childbirth, and neonatal care ca. 100 kidney transplants annually self-insured against professional liability located in judicial hellhole old risk management strategy: deny and defend catalyst for change: missed leukemia diagnosis

4 What do patients want after event? Five "R"s of Apology (Woods 2007) Remain Engaged honest, frequent, consistent communication Recognition that an unexpected adverse outcome has arisen Regret express empathy for the patient s loss and harm Responsibility accept fact that provider s action caused harm admit negligence (if harm indeed due to negligence) apologize Remediation medical financial learn from incident to prevent recurrence

5 Voluntary Disclosure of Medical Error at the U of Illinois Medical Center 1. Patient Safety Incident Reporting 2. Investigation 3. Communication and Disclosure 4. Apology and Remediation 5. System Improvement 6. Data Tracking and Performance Evaluation 7. Education and Training

6

7 Why (Not) Disclose Errors? pro ethical imperative learn about system failures and prevent recurrence personnel retention avoid claims, reduce legal costs contra fear that botched disclosure will only compound the error: frustrate frontline practitioners ruin reputation of organization and individual practitioners alienate patient, friends and family trigger costly wave of payments pragmatism existing programs at Lexington VA, U Michigan Health System seem to work, provide template legislative initiatives at state and federal levels, e.g. National Medical Error Disclosure and Compensation (MEDiC) Act of 2005 [introduced by Clinton and Obama; did not pass]

8 Bargaining with Private Information both sides observe severity of injury, W defendant knows better than the plaintiff the degree of liability q that the court will assign if trial (asymmetric information): defendant knows realization of q plaintiff only knows distribution of q ~ U [0,1] parties can settle: defendant pays S to plaintiff or parties can proceed to trial: defendant pays qw to plaintiff each party pays its litigation costs C d and C p assume case has merit: E[q]W C p = W/2 C p > 0

9 Baseline Case: Symmetric Information Both parties predict q equally well Parties always settle Nash bargaining: split total litigation cost plaintiff s expected compensation: W/2 C p + (C d + C p )/2 defendant s expected payment: W/2 + C d (C d + C p )/2

10 Asymmetric Information: Who Moves First? Screening Model Plaintiff moves first by demanding settlement S Provider is reactive Signaling Model Defendant moves first by offering settlement S Provider is proactive

11 Plaintiff screens for q after injury W, plaintiff demands settlement S if defendant accepts S, game over: defendant pays S plaintiff receives S if defendant rejects S, plaintiff has 2 options: LITIGATE: true q is revealed defendant pays qw + C d plaintiff receives qw C p GIVE UP: defendant pays 0 plaintiff receives 0 defendant accepts demand iff S p[qw + C d ]

12 Plaintiff screens for q NATURE q q PLAINTIFF demand S DEFENDANT ACCEPT REJECT ACCEPT REJECT ( S, S) ( S, S) PLAINTIFF GIVE UP LITIGATE GIVE UP LITIGATE ( 0, 0) ( qw C d, qw C p ) ( 0, 0) ( q W C d, q W C p )

13 Plaintiff screens for q Equilibrium plaintiff always demands W C p plaintiff always sues if defendant rejects demand plaintiff s expected compensation: W/2 C p + [(C d + C p )/2][(C d + C p )/W] defendant s expected payment: W/2 + C d - [(C d + C p )/2][(C d + C p )/W]

14 Defendant signals q after injury W, defendant offers settlement S if plaintiff accepts S, game over: defendant pays S plaintiff receives S if plaintiff rejects S, trial: q is revealed and defendant pays qw + C d plaintiff receives qw C p

15 Defendant signals q NATURE q q DEFENDANT offers S offers S PLAINTIFF ACCEPT REJECT ACCEPT REJECT ( S, S) ( qw C d, qw C p ) ( S, S ) ( q W C d, q W C p )

16 Defendant signals q Equilibrium defendant always offers qw C p plaintiff indifferent between accept / reject plaintiff more likely to reject lower offers (to keep defendant honest) plaintiff s expected compensation: W/2 C p defendant s expected payment: W/2 + C d - [(C d + C p )/k][(c d + C p )/W] where k < 2.

17 17 Screening versus Signaling model plaintiff s expected compensation symmetric information W/2 C p + (C d + C p )/2 asymmetric information.. screening W/2 C p + [(C d + C p )/2][(C d + C p )/W].. signaling W/2 C p

18 18 Screening versus Signaling model defendant s expected payment symmetric information W/2 + C d - (C d + C p )/2 asymmetric information.. screening W/2 + C d - [(C d + C p )/2][(C d + C p )/W].. signaling W/2 + C d - [(C d + C p )/k][(c d + C p )/W] where k < 2.

19 Error disclosure at UIMCC: the timetable 2001 Personnel changes in legal counsel office & in hospital leadership biggest naysayer left UIMCC Beginning of medical malpractice insurance crisis in Cook County, Illinois Approval to craft a full disclosure process for presentation to the University s Board of Trustees April 2006 The Comprehensive Process for Responding to Patient Safety Incidents at UIMCC goes live

20 Claims against UIMCC (preliminary) reported patient safety incidents Fiscal Year ,127 2,152 1,892 1,669 1,823 2,069 2,353 confirmed Sentinel Events lawsuits filed against UIMCC closed dropped settled defendant won plaintiff won discharges UIMCC only 17,642 18,387 18,458 18,533 19,255 20,838 high-risk discharges all Cook County hospitals 841, , , , , ,871 1 unexpected occurrence involving death or serious physical or psychological injury, or the risk thereof (Joint Commission 2007). 2 as of December any of 40 DRGs that were found most likely to be associated with an adverse event in the HMPS (1990).

21 Conclusions voluntary disclosure does not begin or end with mere provider-patient communication requires comprehensive process key element: shift from reactive to proactive management of error make asymmetric information about liability work in favor of defendant retain positive probability of trial to keep defendant honest externality of cases that go to trial on future settlements works within given system of med mal dispute resolution won t change accuracy of determining true negligence particularly beneficial for hospitals with sharp improvements in their patient safety performance record if disclosure reduces claims, replace outside liability with inside liability rules to maintain deterrence

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