Medical liability insurance plays a large and essential role in the U.S. health care system. This article demonstrates how one insurance carrier, CRICO, has embraced and achieved the twin goals of protecting health care providers and promoting patient safety.
CRICO is the largest medical liability insurer in Massachusetts and an internationally known leader in evidence-based risk management. CRICO’s mission is to provide superior medical liability insurance to its members and to assist them in delivering the safest health care in the world. To achieve this mission, CRICO is committed to defending good medical practice, offering compensation for substandard medical care, and contesting at trial nonmeritorious cases in which no medical fault is apparent. CRICO applies this strategy to serve 12,000 physicians and 15,000 mid-level providers at 22 hospitals, including Harvard flagship hospitals, such as Massachusetts General Hospital and Brigham and Women’s Hospital, and more than 200 health care organizations.
Formed in 1976 by the Harvard Medical Institutions, CRICO operates primarily within the Massachusetts legal context, which is significant in that the efficacy of the tort system varies by jurisdiction. Massachusetts and New Jersey are the only states to provide “charitable immunity” to health care institutions, limiting their liability to $100,000 per claim. The practical effect is that patients who allege harm sue individual providers and only infrequently not-for-profit health care entities or systems. Massachusetts juries historically have viewed providers favorably. Nonetheless, CRICO is committed to fair outcomes for patients and providers alike.
Because litigation is often financially and emotionally costly to all parties, CRICO seeks to avoid going to trial whenever possible. Clinicians are encouraged to empathize with and support patients in order to restore and maintain trust, and in cases involving obvious error, prompt settlement is pursued. In these instances, CRICO provides physicians with guidelines for disclosure, emphasizing attention to patients’ clinical needs, as well as family questions and concerns. CRICO also advocates a team approach to disclosure, and an “institutional coach” to facilitate the process.* To date, CRICO has resolved most claims with clear liability through disclosure and apology without protracted litigation and often without any court involvement.†
CRICO’s approach to risk management has meant that, over time, the organization has seen more informally asserted claims, fewer lawsuits, and even fewer jury trials. The frequency of CRICO claims is approximately 2.3 per 100 physicians per year, well below state and national averages; 0.46 claims are paid per 100 physicians per year.‡ Awards tend to be of mid- to high financial severity because only significant cases are pursued. Very few frivolous cases are brought to court. Of the 252 CRICO claims and suits resolved in 2011, 52 percent were denied, dismissed, or abandoned by plaintiffs; 33 percent were settled; 13 percent resulted in a jury verdict or arbitration award for the defense; and 2 percent in a verdict or award for the plaintiff. Year after year, more than 90 percent of CRICO jury verdicts are for the defense. These data indicate that CRICO is meeting its goal of addressing most cases with open dialogue and payment when warranted, while reserving litigation for the 15 percent of cases that are truly contested.
CRICO also embraces binding arbitration as an alternative to trial. In binding arbitration, opposing parties present their cases to an arbiter, often a retired judge, who determines their relative merits. Key features of binding arbitration include a private and informal setting outside of the courtroom, no appeals process, and a written decision and explanation from the arbiter. Binding arbitration tends to occur as scheduled and without delay, unlike many court cases. Damage awards tend to be more predictable and usually are more in line with settlement values than those afforded by jury trials.
CRICO is successful in approximately three-quarters of binding arbitration cases. CRICO’s experience with binding arbitration may indicate the potential of health courts to reduce liability litigation, as described elsewhere in this issue of the Bulletin.
The key to CRICO’s success in arbitration and trial lies in its analytic process, which systematically recognizes and resolves those cases in which clinicians are clearly or likely at fault. CRICO pays meritorious claims, instead of allowing them to proceed to trial. Most fundamentally, CRICO has been successful because the group realizes that the best way to protect its members is by promoting best medical practices and patient safety. Avoiding litigation through open communication and prompt settlement where warranted is a strategy that benefits the insurer, provider, and patient alike.
*LaValley D. CRICO: Guidelines for disclosure. 2009; Available at: www.rmf.harvard.edu/Clinician-Resources/Guidelines-Algorithms/2009/Guidelines-for-Disclosure. Accessed January 16, 2013.
†CRICO. Clinician resources. CRICO’s Approach to Disclosure of Medical Error and Compensation. 2012; Available at: www.rmf.harvard.edu/Clinician-Resources/Article/2012/CRICOs-Approach-to-Disclosure-of-Medical-Error-and-Compensation. Accessed January 16, 2013.
‡CRICO. CRICO: Protecting providers. Promoting safety. 2012; Available at: www.rmf.harvard.edu/About-CRICO. Accessed January 16, 2013.