The University of Michigan’s Early Disclosure and Offer Program

Medical liability litigation is a powerful force in the U.S. health care community. The mere possibility of being sued may affect clinical decision making, strain physician-patient relationships, and shape the professional experiences and attitudes of physicians. When they occur, liability lawsuits can be a financially and emotionally devastating experience. As a result, hospitals across the country rely on professional risk managers to reduce their legal liability. Given the short-term financial exposures associated with liability claims, risk management—historically expected to “circle the wagons”—has often been perceived as a financial necessity first and foremost.

However, the concept of risk management is evolving. The core challenge to medical risk management is not litigation but harm to patients. Patient safety is, and must be, the central goal of any risk management program. To illustrate this point, this article looks at the early disclosure and offer (D&O) program at the University of Michigan Health System (UMHS), Ann Arbor, which has shown promising results since its implementation 10 years ago.

Reduced medical liability is indeed a desired outcome of the D&O program, but the best risk management is reduced patient injuries. This program demonstrates that the D&O approach cuts the costs associated with liability claims by creating the safest possible environment for patients.

Restoring accountability

In late 2001 and early 2002, UMHS changed the way the health system responded to patient injuries, applying what has become known as the Michigan Model and has since been described as an early disclosure and offer program. The UMHS’ approach was designed to promote patient safety through the principles of honesty, transparency, and accountability.1 In 2004, UMHS announced its goal of becoming the safest hospital system in the nation.2

The program was informed by two central observations: (1) honesty is indispensable for safety improvement, and (2) a short-term focus on financial risk impedes long-term improvement. The tenets of the D&O system include compensating patients quickly and fairly when inappropriate medical care causes injury, communicating openly with patients about error(s), supporting staff vigorously when appropriate care has been provided, and reducing future injuries and claims through application of knowledge garnered through the discovery process. The system emphasizes UMHS’ commitment to patient safety, as well as its accountability to patients and to clinicians who provide high-quality care.

Recognizing that problems can only be addressed if they are known, the UMHS’ D&O system uses multiple strategies to capture unintended clinical outcomes. UMHS promptly investigates patient complaints. At all stages of the investigation, UMHS prioritizes open communication with patients, and representatives offer to meet with patients, families, and legal counsel to obtain their views, discuss the complaint, and explain the progress of the investigation. These meetings provide an important opportunity to help manage patients’ expectations regarding continuing clinical needs and dispute resolution. When the investigation is complete, UMHS communicates its full findings to patients and promptly offers compensation when it determines that inappropriate care led to an injury.

A UMHS internal committee assesses errors in patient care after thorough investigation and review. This approach, as opposed to reliance on outside “experts,” promotes a sense of ownership among UMHS care providers. It also reduces physicians’ anxiety over whether their clinical reasoning and decision making will be undervalued and lessens their feelings of victimization at the hands of a broken and unfair litigation system. Most importantly, a careful internal assessment of clinical events dramatically increases the chance that safety problems will be fixed going forward.

Departure from deny and defend

UMHS’ D&O program represents a radical departure from the traditional “deny and defend” paradigm. Under that model, the health care community categorically rejects fault for adverse events and outcomes, and complex medical and emotional issues are systematically “turfed” to lawyers. Consequently, the physician-patient relationship inevitably becomes adversarial. Attorneys on both sides, focused on winning the case that might ensue, advise stonewalling the patient instead of discussing the case openly and honestly. Patients are kept in the dark about clinical decisions and events related to their care and often describe feeling abandoned. As misunderstandings and resentments solidify, patients increasingly turn to lawyers who, in turn, recommend litigation, regardless of the merits of the case.3

Although physicians are well-aware of the financial and emotional impact of litigation, deny and defend only increases these burdens.4,5 Deny and defend exacerbates several factors that drive patients to seek legal counsel. For instance, patients often contact lawyers in search of answers, but the threat of legal involvement has a chilling effect on communication between patients and clinicians because they are now perceived as being in opposition to one another. Similarly, patients who have suffered an adverse event have a natural desire for justice and accountability. When the medical community denies and defends, lawsuits become the only constructive recourse.

Furthermore, the fact that patients feel compelled to protect others from the same adverse clinical outcome has been grossly underappreciated. Several studies on why patients sue their caregivers cite this sense of obligation to fellow patients as a strong motivating factor for pursuing litigation.6,7 Deny and defend undermines this driving force because it rejects the notion that the outcome was preventable. Instead, it commits physicians and their attorneys to justifying the care provided, even if it was substandard. For all members of the health care community, deny and defend provides a disincentive for investigating clinical events and decisions for fear that such scrutiny would reveal compensable error.

Finally, and most powerfully, deny and defend serves neither the individual nor the common good. By systematically justifying substandard care, this approach is both an obstacle and a threat to patient safety. It undermines accountability, actively ignores dangerous individuals and patterns in the health care system, and disregards the ongoing risks that they present to patients.

Two sides of the coin

The impression that medical liability suits are an inevitable cost of doing business can render settlement an appealing option for defendants, even when no medical error has been committed. However, for individual physicians, this pattern can be painful and demoralizing, and for health care systems, it is an extremely costly strategy. It leaves caregivers dispirited and less likely to make evidence-based clinical decisions and may encourage patients and attorneys to pursue meritless lawsuits risk-free.

If UMHS concludes that a patient was injured due to inappropriate care, its policy is to offer patients a prompt apology and fair compensation. Conversely, if UMHS finds that the adverse outcome was not a result of inadequate care, it generally refuses to settle, regardless of expediency. In this situation, open communication with patients takes on additional value as a means of informing potential plaintiffs and their attorneys that they do not have a meritorious legal case and the reasons for that conclusion. Furthermore, it is important that UMHS providers see the clear and robust connection between quality of care and risk management; settling non-meritorious claims would undermine this correlation. Ironically, UMHS officials agree that refusing to settle such claims has been one of the most difficult components of the model to implement. It is costly to refute frivolous accusations in court, and it is often less expensive to appease plaintiffs with a settlement payment. However, the UMHS views court cases in which they defend reasonable care as an investment in the integrity of their institution and the D&O program, and as an important demonstration of UMHS’ commitment to safe, high-quality care.

Results of the program

UMHS’ D&O model has successfully resulted in fewer claims, fewer lawsuits, and lower liability costs. Kachalia and colleagues found that the rate of new claims at UMHS has decreased from approximately seven per 100,000 patients to fewer than five.     The rate of lawsuits has declined from 2.13 suits per 100,000 patients per month, to roughly 0.75. The median time from claim to resolution has dropped from 1.36 to 0.95 years. Cost rates due to total liability, patient compensation, and legal fees have decreased as well. Because UMHS generally refuses to settle what appear to be non-meritorious claims, patient compensation is now a direct indicator of substandard care in UMHS and a powerful motivator for increased safety and adherence to standards of care.

Anecdotal evidence suggests that the D&O program has helped UMHS retain patients, even after they were harmed because of a medical error or mistake.9 In that respect, the institution’s response to the adverse event seems not to undermine patient trust in the medical system but to actually help restore it. Anecdotal evidence also suggests that the program has had a positive effect on clinician morale. Health care professionals find reassurance and validation in UMHS’ staunch defense of high-quality care and have reason to believe and expect that their work will be recognized and honored by their institution. Finally, the D&O program has contributed to a culture of patient safety at UMHS. The institution’s scores on the biannual safety attitudes questionnaire have improved steadily since 2006.1

Well-received program

The UMHS model has been generally well-received in Michigan and elsewhere. In Michigan, the plaintiffs’ bar has embraced the model, in part because they do not benefit from pursuing groundless litigation. In contrast, the defense bar consistently views it in a negative light, possibly because early resolution negatively affects their practice. Nationally, the model has been covered by major newspapers and newsmagazines and was cited by then-Sens. Barack Obama (D-IL) and Hillary Clinton (D-NY) in a 2006 editorial on health care reform.10,11

Although the UMHS D&O program is novel in its focus on patient safety improvement, the model was not without precedent. The Department of Veterans Affairs (VA) initiated a D&O program in Lexington, KY, in 1987.12,13 The model spread to several private institutions and VA hospitals, but was not adopted by the VA system overall. Primarily an early resolution model, the VA’s program was not linked to patient safety improvement.

Traditionally, many health systems and insurance carriers have engaged in “service recovery,” a practice in which risk managers spot potential claims early and intervene with modest payments as a means of intercepting litigation. In Colorado, for instance, the liability insurance provider COPIC established a compensation model in which patients could be reimbursed up to $5,000 for lost time and $25,000 for out-of-pocket expenses related to their adverse outcome or event.12

The program was very limited, however. Patients who had legal counsel were excluded. Payments were made largely for out-of-pocket costs, not as compensation for injuries. By design, no admissions or apologies were attempted. Generally under the compensation-only model patients who accept the payout retain the right to sue. Severe or fatal injuries, and adverse outcomes clearly due to medical error, are exempt from this process. Notably, compensation models do not involve investigations into possible provider error, and no connection is drawn between injury and patient safety efforts.

Patient safety through D&O

In terms of patient safety, early and open communication with patients is not simply the right thing to do—it is also the smart thing to do. Most health systems view liability costs as simply a cost of doing business, and not a legitimate indication of the quality of their care. By significantly reducing spurious lawsuits, the UMHS D&O program provided the institution with an additional metric with which to measure the quality of care it delivers regularly. Data pertaining to settlements and court cases are now seen as robust indicators of what UMHS is doing well, and where and how it continues to put patients at risk.

In other words, D&O helps the institution isolate problematic or dangerous processes and health care professionals. The model forces the host institution to confront unpleasant and often tragic realities and determine its own accountability for them. In offering early disclosure to patients, UMHS must first admit mistakes to itself. It follows, too, that patient safety will always be at risk if UMHS and the health care system overall are unwilling to remove the individuals who provide substandard care. UMHS’ awareness of the weaknesses of systems and staff can and must be leveraged to shape improvements, reduce risk, and protect patients. Having taken stock in an accountable way, the D&O approach stimulates honest, evidence-based peer review and forward-thinking approaches to improvements in patient communication and engagement.

In addition, the systematic and thorough investigation of patient complaints—not simply patient claims—is a powerful means of uncovering opportunities to improve patient safety. At UMHS, patient complaints and the peer review process are used to inform educational initiatives for clinicians and to direct other quality improvement efforts.

The physician’s role

Several points pertaining to clinician responsibilities in the D&O program warrant mention. Of note, UMHS discourages physicians from disclosing errors to patients. There are several reasons for this. First, physician disclosure is likely to be biased in some way and based on partial or otherwise imperfect information or emotional bias. Furthermore, clinicians risk losing credibility if their disclosure is in some way wrong—a “false positive” or “false negative”—and the goal of the D&O program is to maintain and foster trust between patients and providers. At the UMHS, the risk management staff sees itself as advocating for the institution and its clinicians, but with the understanding that defending care that should not be defended benefits no one.

Some clinicians are hesitant to apologize to patients for fear that the apology will be used against them in court. Although physician apology is an important component of the D&O model, such expressions of regret tend not to make physicians more legally vulnerable. Under this model, clinicians are encouraged to offer formal apologies only if an internal UMHS medical committee has judged the care to be substandard. In that case, however, an offer of prompt and fair compensation reduces the likelihood of litigation.

UMHS offers alternate guidance to clinicians available 24 hours, seven days a week. In particular, physicians are encouraged to help patients understand the risks of procedures or treatments and are discouraged from stating things that patients might interpret as promises or guarantees. Patients who have unrealistic expectations may experience a heightened sense of disappointment, suspicion, distrust, and betrayal should an adverse event or outcome occur.

Conclusion

The UMHS’ disclosure and offer program is a compelling demonstration of the power of honesty, transparency, and accountability as pillars of medical liability management, serving the dual goals of improving patient safety and ameliorating the costs of avoidable medical mistakes. The program makes every effort to put patients and their safety first and, in that way, fulfills its commitment to serving and protecting physicians, providers, and health systems.


References

  1. Boothman R, Imhoff SJ, Campbell DA. Nurturing a culture of patient safety and achieving lower malpractice risk through disclosure: Lessons learned and future directions. Front Health Serv Manage. 2012;28(3):13-27.
  2. Anstett P. U-M hospital’s goal: Safest in the nation. Detroit Free Press. February 24, 2004. Detroit, Michigan.
  3. Brennan TA, Sox CM, Burstin HR. Relation between negligent adverse events and the outcomes of medical-malpractice litigation. N Engl J Med. 1996;335(26):1963-1967.
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  7. Dauer EA, Marcus LJ, Payne SM. Prometheus and the litigators. A mediation odyssey. J Leg Med. 2000;21(2):159-186.
  8. Kachalia A, Kaufman SR, Boothman R, Anderson S, Welch K, Saint S, Rogers MA. Liability claims and costs before and after implementation of a medical error disclosure program. Ann Intern Med. 2010;153(4):213-221.
  9. Gotbaum R. Interview with Richard Boothman on a medical-error disclosure program in Michigan. N Engl J Med. 2006; 2205-2208.
  10. University of Michigan Health System. The Michigan model: Medical malpractice and patient safety at UMHS. 2012. Available at: www.med.umich.edu/news/newsroom/mm.htm. Accessed November 28, 2012.
  11. Clinton HR, Obama B. Making patient safety the centerpiece of medical liability reform. N Engl J Med. 2006;354(21):2205-2208.
  12. Mello MM, Gallagher TH. Malpractice reform—opportunities for leadership by health care institutions and liability insurers. N Engl J Med. 2010;362(15):1353-1356.
  13. U.S. Department of Health and Human Services. Agency for Healthcare Research and Quality. Proactive reporting, investigation, disclosure, and remedying of medical errors leads to similar or lower than average malpractice claims costs. AHRQ Innovations Exchange. Available at: www.innovations.ahrq.gov/content.aspx?id=2731. Accessed November 28, 2012.

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