Early action cuts claims, costs

Researchers at Brigham and Women’s Hospital (BWH) and the University of Michigan analyzed a program of full disclosure and compensation for medical errors and found a decrease in new claims for compensation (including lawsuits) and liability costs. The findings are published in the Aug. 17 issue of the Annals of Internal Medicine.

While experts acknowledge that patients should be informed of medical errors, there is concern that a fear of increased litigation and costs may discourage proactive disclosure.

“The need for full disclosure of harmful medical errors is driven by both ethics and patient safety concerns,” said lead study author Allen Kachalia, medical director of quality and safety at BWH and an assistant professor in the Department of Health Policy and Management at the Harvard School of Public Health. “However, because of fears that disclosing every medical error may lead to more malpractice claims and costs, disclosure may not happen as often and consistently as we would hope.”

In 2001, the University of Michigan Health System (UMHS) launched a comprehensive claims-management program that centered on full disclosure with offers of compensation for medical errors. Under this model, UMHS proactively looked for medical errors, fully disclosed errors to patients, and offered compensation when at fault.

Researchers conducted a before-and-after analysis to determine how the UMHS model affected claims and costs. Reviewing claims from 1995 to 2007, researchers found a decrease in new legal claims (including the number of lawsuits per month), time to claim resolution, and liability costs after implementation of the disclosure program.

“The decrease in claims and costs may be attributed to a number or combination of factors,” says Kachalia. “We found a 61 percent decrease in spending at the UMHS on legal defense costs, and this supports the possibility that patients may be less likely to file lawsuits when given prompt transparency and an offer of compensation.”

Researchers hope the study alleviates fears associated with disclosure and encourages efforts to disclose all harmful medical errors. The study was funded by the Blue Cross Blue Shield of Michigan Foundation.