Innovation: Transparency and Apology Proves Effective

Sometimes the best innovation can be as simple as doing the right thing.

The University of Michigan Medical System is finding this to be the case in its proactive strategy in how it handles medical mistakes.  This innovative policy – owning up and simply doing the right thing – is showing significant benefits, both in how possible malpractice suits are handled AND improving its balance sheet in the form of substantially reduced Malpractice Reserves. This video, courtesy of CBS News, tells the story.

And the savings do not stop at U of M.  Other hospital systems  in Michigan are experiencing similar results as detailed here in Hospitals find confession good for the bottom line.

It seems that confession is good for more than just the soul after all.

Why is this so important?

In his article, The Cost of Defensive Medicine (AAOS Now, November 2008), Stuart L. Weinstein, MD shared the following analysis on the burden this places on the system:

The impact on cost
Defensive medicine is defined as providing medical services that are not expected to benefit the patient but that are undertaken to minimize the risk of a subsequent lawsuit. Diagnostic defensive medicine practices have a much greater impact on costs than do therapeutic defensive practices. The quality of the literature on the true costs of defensive medicine and its impact on healthcare costs is poor; few good studies exist, and cost estimates vary widely.

The study quoted most often is by Daniel P. Kessler and Mark B. McClellan. To really understand actual costs, Kessler and McClellan analyzed the effects of malpractice liability reforms using data on Medicare beneficiaries who were treated for serious heart disease. They found that liability reforms could reduce defensive medicine practices, leading to a 5 percent to 9 percent reduction in medical expenditures without any effect on mortality or medical complications.

If the Kessler and McClellan estimates were applied to total U.S. healthcare spending in 2005, the defensive medicine costs would total between $100 billion and $178 billion per year. Add to this the cost of defending malpractice cases, paying compensation, and covering additional administrative costs (a total of $29.4 billion). Thus, the average American family pays an additional $1,700 to $2,000 per year in healthcare costs simply to cover the costs of defensive medicine.

President Obama, in his remarks to a joint session of Congress  on September 9, 2009 highlighted Tort Reform and the costs of defensive medicine in the list of actions that need to be taken to get healthcare costs under control.  And he is right.  We must address this if we want to have a prayer of getting these costs under control.

But equally important, proactive and responsible policies, like those demonstrated in the video can also make a huge difference.   In many cases, they can keep the whole thing out of the courts in the first place.  Saving everyone – doctors, hospital and patients from the pain and suffering  of a long and expensive litigation process.

Imagine the savings if this was applied nationwide and if EVERYONE simply did the right thing.

Thanks for stopping by.  Stay tuned…

Joan Koerber-Walker

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