When the University of Michigan Health System launched a program to inform patients of harmful medical errors and offer compensation, legal claims dropped more than 25%.
The numbers of lawsuits decreased along with liability costs, also the remaining legal issues were resolved much faster.
"These findings demonstrate that it is possible to implement a disclosure-with-offer program without increasing liability claims and costs," wrote the authors in the report published in the Annals of Internal Medicine.
The authors, Allen Kachalia, MD, and others from the University of Michigan Health System, say their institution is the second—in addition to the Veterans Affairs Medical Center in Lexington, KY—to report its experience with a medical error disclosure with offer program, although other systems have undertaken such projects.
The study compares six year periods before and after the program's launch: between July 1, 1995 to July 1, 2001 and between July 1, 2001 to September 1, 2007.
The authors say they wanted to examine how a culture of transparency affected claims. Although many hospitals and physicians say they fully disclose errors as is their ethical responsibility, "in practice disclosure may not occur as frequently as we might hope."
Some practitioners and hospital officials fear that admitting a medical error might be tantamount to "handing over a 'blank check' and invite lawsuits and disputes about compensation amounts" while others might worry about damage to the institution's or individual provider's reputations.
What they discovered, however, was a dramatic decline in legal action taken on the part of patients and their families. "The monthly rate of new claims decreased from 7.03 per 100,000 patient encounters before initial program implementation to 4.52 after," the researchers wrote. They decrease was statistically significant for claims resulting in lawsuits, 232 of which were filed per year before the program and 106 of which were filed after.
Median time to claim resolution before the program was 1.36 years, but after the program, it went to .95 of a year.
J. James Rohack, MD, immediate past president of the American Medical Association, says the AMA supports funding "to further test the effectiveness of early disclosure programs and other innovative proposals, including health courts and safe harbors for the practice of evidence-based medicine."
However, he emphasized that the AMA strongly supports liability reform at state and federal levels to implement policies with malpractice payment caps on non-economic damages, such as the $250,000 pain and suffering limit in California and another program in Texas.
Nancy Foster, vice president for quality and patient safety policy for the American Hospital Association, says that such programs are growing throughout hospitals in the country, with the support of the AHA. "It's about changing the culture of the institutions," she says.
Questions remain, however, about how the hospital selects the right person to talk with the patient and his or her family, and at what point in the discovery process of exactly what happened should disclosure be made.
"As we see with other errors, you don't know very much in the first few minutes or hours. How early do you share the information with the patient especially when there is still a good deal of uncertainty?"
"It's like a disclosure that happens around a plane crash, or something else that we might see on the news...you share what you know, and promise to continue to investigate," she says.
Another issue being debated within hospitals is for providers to make sure the people who are being informed about a medical error involving a patient are people the patient agreed should have access to that medical information, she says.
The Michigan authors of this report say their disclosure with offer program addressed other problems within the legal system.
"Two frequent criticisms levied on the tort liability system are that only a small proportion of patients are ever compensated for negligent injury and that the time to obtaining compensation is excessively long.
"Our finding that time to claim resolution was shorter with the disclosure program suggests that the program seems to address the latter criticism. Quicker resolution can be important especially for patients sustaining disabling injuries."
The program also reduced malpractice administrative expenses. "After implementation, mean legal expenses for UMHS decreased by about 61%," and while that was partially offset by the increase in the risk management budget needed to "more proactively" address claims internally, much of the spending went toward efforts to improve patient safety rather than administering the disclosure program, the authors wrote.
Asked for a comment on the report, Ray De Lorenzi, spokesman for the American Association for Justice, formerly known as the Association of Trial Lawyers of America, says:
"Apology programs can be successful in preventing litigation when they encourage the disclosure of errors and offer appropriate compensation to affected patients. However, safeguards must be in place so these programs are not coercive and the legal rights of patients and their families are preserved."
In an accompanying editorial, A. Russell Localio, an attorney and biostatistician with the University of Pennsylvania School of Medicine, said the Michigan system "identifies errors, discloses them to the injured patients and offers financial compensation, all without the involvement of the legislature, Congress, courts, or administrative agencies and with greatly reduced expenses for attorneys.
And while the Michigan report offers "promising answers," it "lacks details necessary to fully evaluate the plan's success," he wrote. For example, "the authors could not distinguish disclosures initiated by the health system from those offered in response to a patient complaint," a distinction he said "is vital if the ideal is a health system that monitors its care and discloses its errors voluntarily before a patient's complaint."
He called for additional evaluation of such programs. "We still need more and better data to confirm their findings," Localio wrote.