How to Reduce Liability Insurance Exposure

We talk to hundreds of hospitals across the country every week. In our dealings with them we've come to realize that liability insurance carriers who are protecting hospitals are increasingly either requiring or strongly recommending that their risk management professionals insist upon sending all sentinel events out for external peer review. Why? Well, the fact is that hospital peer review is rapidly becoming a best practice for insuring quick case resolution, root cause analysis of sentinel events, and illuminating conflicts of interest when it comes to insuring quality and patient safety.

It's no secret that all insurance companies expend a certain percentage of their revenues on helping their clients to improve their practices in order to reduce costs when it comes to risk management. Professional liability insurers who operate in the hospital group space are using peer review as another strategy to help their clients lower their experience ratio and improve the root cause analysis that leads to a reduction in sentinel events.

The external medical peer review process when integrated into a hospital quality management system provides an outstanding remedy to the professional liability insurance premium escalations that have now turned into a crisis in so many states across America. If you're a CEO or hospital administrator looking for ways to reduce your risk and reduce your liability premiums so that you can reduce the costs of providing services to your patients and your local population, consider an investment in an external review process every time you have a sentinel event that has a potential for litigation. By sending cases out for external peer review, you can often prevent any potential lawsuit by insuring that nothing was done wrong by your medical professionals and hospital staff that lead to a particular sentinel event.

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.

How To Select the Best Independent Review Organization

If your company is in the process of looking to hire its first independent review organization, many of the topics that were just listed in this blog can provide you with the criteria that you should be using as you go through your selection process. Certainly URAC accreditation is another important one.

Our suggestion is: If you're going to hire an IRO, look beyond just the surface of a company's size. Look at what their critical attributes are. What sort of commitment does it have to customer service? What are its quality management systems and measurements? What sort of reporting can it provide to you? How quick are the turnaround times? Do they exceed the URAC turnaround times? What sort of culture does the IRO have inside its company relating to continuous improvement, quality management, and training. These are some of the criteria that I would apply if I were out looking for a new IRO to add to my vendor list. I would suggest that if you're interested in talking more about that, you consult with some of your other colleagues to find out what company they're using and who they hear is among the best.

Importance Of Having A On Site Clinical Staff in Independent Review Organizations

Many independent review organizations actually work without having any onsite clinical staff within their companies. In fact, they have administrative and operational people who provide the coordination of sending, receiving, proofing, and editing reviews that are done only by outside specialists.

Our own viewpoint is that an IRO today needs to have an internal full time clinical staff working inside the company. There are a number of reasons for this. First, having doctors on staff allows us to provide a much higher level of customer service to our clients than IROs who don't. Second of all, those doctors are needed in order to correctly select the right specialists for each review that comes in. Why is this? Many of these review requests are highly technically and only can be decided upon in terms of where to send cases by a physician. Third, having in house physician staff allows us to interpret and communicate with specialists who are on our peer panel at a much higher level than IROs who do not. Finally, many of our clients ask for us to make telephone calls to attending physicians prior to rendering a final review determination. This is next to impossible to organize between a peer specialist who is in active practice and an attending physician. Therefore, it makes sense for us to have our own medical staff that is capable of doing this in house. Typically, multiple attempts have to be made in order to catch an attending physician when they're not seeing patients. Having your own medical staff is the way you achieve this.

For a number of reasons today's IRO is called upon to have a full time clinical staff to be able to interface at the level that is required in order to meet customer demands. Our own clinical staff consists of primary care and emergency physicians. In addition, they are supplemented with physicians assistants and registered nurses who work for them but can still use their medical knowledge to interpret cases and provide some of the background work required as a part of the independent review process.

Independent Review Organizations and Credentialing of Specialists

We run across clients who are shifting over to us when their previous Independent Review Organization has amounted to nothing more than a doctor with a small group of his or her buddies who are reviewing charts and providing medical determinations to their clients. That doesn't cut it in today's day and age. An IRO has to have a core competency in recruiting and credentialing top specialists from each specialty area and subspecialty area, as well as allied healthcare fields in order to be at the top of its game.

Our organization has recruited and credentialed well over 300 specialists across the country. AllMed Healthcare is actually one of the smallest. Some IROs have as many as 3 or 4 thousand reviewers. We don't believe that this is effective because unless you're managing huge volumes of independent reviews every day it pays to have fewer specialists doing more reviews so that they can maintain a level of training and involvement with your company. When you over recruit specialists what happens is they never get reviews from you and as a result, they can never remember what the elements of the review processes are and ultimately this leads to a higher level of turnover amongst the specialists.

An IRO needs to be able to recruit and attract the top specialists from their field and this is no trivial task. Neurosurgeons, oncologists, and radiologists (just to name a few), these are doctors who are very highly compensated and extremely busy. Typically, it's very difficult to attract these types of specialists to your company and retain them. An IRO has to be able to exercise both science and art in the process of attracting, retaining, training, and developing these capabilities as a part of it's infrastructure. Recruiting and retaining top specialists is no trivial task for an IRO, and one that adds a lot of value to the process of providing medical reviews for our clients.