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It's a win-win: Hospitals should apologize for mistakes

Research by Stanford Health Policy’s Michelle Mello looks at what happens when a group of hospitals started systematically acknowledging adverse outcomes in care by apologizing and proactively offering compensation where substandard care caused serious harm. 

Hospitals have traditionally “crouched in a deny-and-defend posture when things go wrong in medical care,” said Mello, a professor of law at Stanford Law School and a professor of health research and policy. The new approach, called “a communication-and-resolution program,” or CRP, is being adopted by an increasing number of health-care facilities.

“None of the hospitals experienced worsening liability or trends after CRP implementation, which suggests that transparency, apology, and proactive compensation can be pursued without adverse financial consequences,” Mello and her co-authors write in the study published Monday in Health Affairs. However, despite the growing consensus that CRPs are the right thing to do, concerns over liability risks remain.”

Stanford Health Policy asked Mello some questions about the research:

Could this new approach to resolving patient conflict be a thing of the future?

Hospitals that adopt CRPs believe they will help improve patient safety and are consistent with the ethical obligation to disclose medical errors; they also hope they will reduce liability costs. However, there is a lot of uncertainty about their effects on costs. On the one hand, being honest with patients could avoid the anger that prompts patients to sue, and compensating injured patients early on saves on litigation expenses. On the other hand, in the traditional system, very few patients injured by substandard care ever get compensated. Offering up admissions of error and early compensation could mean a lot more patients receive payment, raising total costs. Uncertainty about this issue continues to be a barrier to widespread adoption of the CRP approach.

What were the key findings in your study?

We evaluated the liability effects of CRP implementation at four Massachusetts hospitals by examining before-and-after trends in malpractice claims, volume, cost, and time to resolution. We then compared those to trends among similar hospitals in the state that did not adopt CRPs. We found that CRP implementation was associated with improved trends in the rate of new claims and legal defense costs at the two big hospitals that implemented these programs — favorable developments that were not seen at comparison hospitals with no communication-and-resolution programs in place. CRP implementation was not associated with significant changes upward or downward in trends of new claims receiving compensation, compensation costs, total liability costs, or average compensation per paid claim, nor was it associated with a significant change in time to resolution.

So then why are the findings important?

The study helps resolve uncertainty about the liability effects of admitting and compensating medical errors, especially since the study design was much stronger than that of previous studies. We found that the CRP approach does not expand liability risk and may, in fact, improve some liability outcomes. Therefore, hospitals can “do the right thing” — be honest about errors, apologize, and compensate patients who are injured by negligence — without adverse financial consequences.

Who began the CRP approach and what is the average payment proactively made to patients who did not receive proper care?

The approach dates to the late 1990s and was first publicized by a Veterans Affairs hospital in Kentucky and then by the University of Michigan Health System, both of which reported very positive outcomes.  Stanford was also an early adopter.

The model calls for patients to be compensated at about what the hospital estimates their claim would be worth in traditional litigation. In our study in Massachusetts, the median payment to patients was $75,000. That’s a lot lower than the median payment in the tort system, but the mix of injuries is different. In traditional litigation, 85 percent of claims involve very serious injuries or deaths, because smaller claims aren’t attractive to plaintiff attorneys. They just go uncompensated. In CRPs, it’s easier for patients with moderate-severity injuries to have access to justice.