Managing Professional Liability Costs Through Peer Review

If your hospital is like many across the nation, you're facing a crisis in being able to manage your professional liability costs in the face of rising lawsuits and rapidly increasing premiums. What's the root cause of this problem? Well obviously it's lawsuits coming from patients who have experienced sentinel events or negative outcomes such as deaths, hospital readmissions, etc. While these patients and their families are entitled to relief in certain circumstances when medical treatments go bad, the fact is that most hospital administrators are being crushed by the rise in liability costs.

If you are a hospital administrator or CEO and looking for remedies in this regard there are a number of things that you can be doing. First and foremost is taking a holistic look at your quality of care delivery system and in particular, look at your quality management system. Taking an outside assessment of your quality management system can provide insight to where your potential root causes are that are leading to sentinel events and in turn produce the kind of litigation and lawsuits that drive insurance premiums up.

These premiums don't get driven up only by actions in your own hospital but by actions across the board in all hospitals. In our litigious society today it's no secret that when people feel that a service provider (particularly in the medical environment) has wronged them, their first impulse is to find a litigious, fee hungry attorney who is willing to take on a malpractice suit or a suit against the hospital on contingency. Since it doesn't cost them anything to sue, it's very easy for them to get started.

Who bares the brunt on these costs? In general, ultimately consumers do as well as health plans, hospital providers - everybody suffers under an overly litigious system which rewards people for bringing suits against others. If you are a hospital in today's environment there is no question that liability insurance premiums are on the rise and are going to continue to escalate. The exception is those hospitals that can demonstrate the absolute best practices when it comes to quality management.