The U-M Health System approach to malpractice claims

Word is getting around that there’s something different going on at the University of Michigan Health System when it comes to patient safety, medical mishaps and medical malpractice litigation.

You may have heard something about our policy of “saying sorry”, or apologizing and having an open discussion, when clinical care does not go as planned. And while apologies are certainly part of our approach, there’s much more to it than that. Communication, full disclosure, and learning from our experiences are all vital.

You may have also heard that we have steadily reduced the number of malpractice claims pending against us and our doctors, slashed our malpractice expenses, dramatically dropped the amount paid to plaintiffs as a result of judgments or settlements, and cut the time it takes to handle a claim. All of this is true.

In short, we’re trying to “do the right thing” for our patients, our medical staff, and the public interest. We believe that court should be the last resort, not the first, when a medical mishap, complication or near-miss occurs.

This page will help you understand our approach, and what we have achieved in the years since we began using it. We don’t claim to have all the answers. But we hope this information will be useful to other health care institutions, as well as the news media, as we all grapple with medical errors and the current malpractice climate.

First, some important background information:

1. UMHS has committed itself to being one of the safest medical centers in America, and to a constant search for new ways to prevent errors, infections, patient and staff injuries, and near-misses. And when a mishap or near-miss occurs, we’re committed to confronting its causes in a blame-free way, and learning from it so that it doesn’t happen again. Visit this page to learn about some of the things we’re doing and what we’ve achieved so far.
   
2. We’re fortunate to be located in Michigan, a state that passed sensible medical malpractice reform in the 1990s and is not having some of the same crisis situations as other states. Our state law, among other things, builds a six-month “cooling off” period into the malpractice lawsuit process. If a patient is thinking about bringing suit against a doctor or hospital for medical malpractice, the patient must first alert prospective defendants of their complaints with a “notice of intent,” and both parties then have six months to consider their cases before going to court. UMHS systematically uses that period to investigate complaints and establish a dialogue with our patients, and their attorneys if they are represented, which often eliminates their need to resort to litigation.
   
3. We’re self-insured for malpractice insurance. All of the U-M physicians who treat patients at the U-M Hospitals & Health Centers are also faculty of our Medical School, and part of our Faculty Group Practice. The U-M General Counsel manages all claims against our medical staff, through staff and outside attorneys.
   
4. We have excellent faculty and staff who provide some of the most complex, advanced medical care in the United States, from transplants of bone marrow and organs, to complex cancer regimens, to open-heart surgery on newborn babies. As a result, our patient population on the whole has more serious and more complex medical issues than the populations at other hospitals. And we’re attracting more patients than ever. This combination of factors means that we walk a high tightrope of risk every day. While independent measures show that our care is world-class, we face the reality that complications can happen despite our best efforts, that procedures and treatments carry risks, and that we must always search for ways to control factors that can affect our patients’ outcomes.

So, what do we do when something happens that shouldn’t have? How exactly do we handle malpractice suits? And what results have this novel approach yielded?

Our approach can be summarized as:
“Apologize and learn when we’re wrong, explain and vigorously defend when we’re right, and view court as a last resort.”

We care deeply about our patients, and we take it very seriously when one of them is injured, concerned or unhappy about the care we have provided. We also care deeply about our staff, and we want to support and protect them so they can continue to do great work. And, we want to create as safe an environment as possible for both patients and staff.  

So, when a patient complains, or a staff person realizes that a mishap or near miss has occurred, several things happen:

1. We follow our institutional policy of communicating openly and directly with the patient or his/her medical representative in the aftermath of the situation or complaint.
2. We review the incident or complaint thoroughly and impartially, to assess what happened. This includes a peer review involving professionals in relevant fields. We also note any opportunities for improvement that might prevent similar situations in the future.
3. If the patient has engaged legal counsel, we offer to meet with both of them to review the care and answer their questions, whether or not they have sent us a notice of intent to sue.
4. If we have concluded that our care was unreasonable, we say so – and we apologize. If our care caused an injury, we work with the patient and his/her counsel to reach mutual agreement about a resolution. This doesn’t always mean a settlement, but if it does, we compensate quickly and fairly.
5. If our investigation convinces us that the care was medically appropriate, we still offer to meet with the patient and his/her counsel to discuss our findings. Often, a medical staff member involved in the patient’s care will participate in this discussion. Many patients are satisfied with full explanations, and may even drop their complaint or suit. One important thing we have learned is that patients want an explanation of their care, and when they don’t get it, they frequently feel they were not treated appropriately.
6. If a patient persists in a suit over care that we think was medically appropriate, or declines to participate in a dialogue with us, we will vigorously defend our staff with the finest legal team we can assemble.
7. No matter what happens: We will seek to learn from the experience, educate our staff, and make changes to the systems and processes that were involved in the care that prompted the complaint. Even if our analysis convinces us that we provided medically appropriate care, the patient’s complaint teaches us that something has clouded his or her perception of our care. If we can do something to keep that from happening with another patient, we will.

Our results so far:

We have always worked to be open and provide full explanations to our patients. But since the year 2001, we’ve made significant changes and implemented a whole new process. Here’s what the old process looked like:

The picture is much different today. Over the past few years, we’ve been using a system that looks more like this:

One of the major features of this system is the investigation that we perform once we receive a pre-lawsuit notice, or other communication from a patient indicating that he or she has retained legal counsel and intends to file suit. We also use this approach when a major error or near-miss occurs and is reported to our Risk Management office. The process looks something like this:

This investigative step is crucial to the success of our approach. We’ve implemented many clinical improvements as a result of review of incidents, complaints and near-misses.

We’ve empowered our staff to speak up, to suggest changes, and to alert us to potential problems, including an easy-to-use secure online patient safety reporting form.

The number of claims and lawsuits has dropped dramatically. In July, 2001 we had more than 260 pre-suit claims and lawsuits pending, already an enviable number in our region. We currently just over 100.

Our legal costs appear to be down dramatically, with the average legal expense per case down by more than 50 percent since 1997. We went to court over seven cases between Aug. 2001 and Sept. 2002, using the principle of court as the last resort. If we had lost all of them, we estimate the verdicts would have cost us more than $8 million. If we had settled all seven at the lowest pre-trial settlement demands, it would have cost about $2.5 million. We won six, and in the seventh the verdict called for a penalty of $150,000, far less than the $550,000 settlement demanded before trial. Trying all seven cost us $320,000 in legal fees. So, if you combine the settlement and the legal fees we paid, and compare it with the cost of settling all seven, we saved $2 million just in the first year of using this approach. We are still tallying results from later years.

The severity of our claims is rising far less rapidly than the national average. Nationally, the predicted severity of malpractice suits is rising by more than 10 percent each year. We’re also seeing an increase, but it’s about 2.6 percent each year. The slope of our claim severity graph began to change for claims arising from care in 2000, coinciding with our claims management changes in 2001 and 2002.

Opening-to-closing times for claims are dramatically shorter, down to about 10 months from more than 20 months in 2001.

Our malpractice premiums are practically level, despite increases in our clinical business. Both in terms of total expense and premium paid per adjusted hospital discharge, this goes completely against state and national trends. Because we’re self-insured, this is a true savings that helps us spend our Health System’s resources where they are needed.

We have instituted many changes to our clinical care based on lessons learned from patient complaints.

In closing...
Do we think the medical malpractice system in Michigan, or in the United States, is perfect? Of course not.

We see what our colleagues in other states without reforms are going through, and we hope that change will come in a form that will provide justice for both sides. We also hope that this country will work toward ensuring that litigation is held as a last resort, and that courtroom evidence is soundly grounded in mainstream medicine and science.

But we also feel that, if there is to be any major reduction in medical malpractice claims and the financial impact they have on the medical community, there must first be an integrated approach to patient safety, quality improvement and the education of both medical staff and patients.

We hope our experience will be informative to others grappling with these same issues.

For an update on recent publications and news coverage regarding our approach, please visit this page.

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