Medical Professional Liability: MRM’s Kelly Tackles Emerging Risks

Medical professionals and hospitals are grappling with some of the most dramatic changes they have seen in years.

Many physicians feel they can no longer succeed in private practice, and they are either moving to become part of hospital systems or are joining large group practices. And there are also emerging risks from adopting electronic health record systems, the changing payment methodology and other new technologies.

Kevin Kelly is CEO at Medical Risk Management, a Hartford, Conn.-based risk management education and consulting firm for healthcare organizations and insurers.

He recently spoke with Insurance Journal at the PLUS Medical Professional Liability Symposium in Atlanta to discuss these emerging exposures. Following are excerpts from the interview.

Insurance Journal: Could you describe some of the structural changes that you are seeing in the industry?

Kevin Kelly: The changes that are occurring today in the healthcare industry are probably the most dramatic that we’ve seen in the industry for a quarter-century.

From a structural point of view, what’s happening in the industry right now is that physicians no longer are finding that they can succeed in private practice, as one- or two- or three-physician groups. That’s been the structure for the last half-century.

What’s happening now faster than it’s ever occurred in the past is that physicians are moving into one of two arrangements: They’re either moving to join or be employed by large hospital systems – healthcare providers, hospitals – or they’re looking to join multi-specialty group practices or large single-specialty group practices. The point being, there’s an aggregation of physicians.

When 70 percent of the care being rendered to patients today is happening outside the four walls of the industry, we need to upgrade and continue to improve our risk management infrastructure within the hospitals so that we’re ahead of the curve in understanding what the private practice physicians’ exposures are and how when we integrate them in, either through employment or otherwise, we can support their efforts to reduce malpractice exposures and improve patient safety.

IJ: How does the adoption of new technologies impact medical malpractice?

Kelly: From a technology point of view, think of the impact of transitioning from an entirely paper world to an electronic health record world.

Physician groups, hospitals, the ambulatory care facilities, the ambulatory surgery facilities at a breakneck speed right now are looking to adapt and implement electronic medical records. But in doing so, what we’re finding are unintended consequences of the rapid deployment of the EHR (electronic health records), so let’s examine them really quickly, just a few.

The cut and paste function. We’re seeing exposures that are growing now of residents who have come in the institution. They’re rounding on the patients every day, cutting and pasting or using a carry-forward function within the EHR so that we may have five or six days of exactly the same notes within that – exactly the same notes, cut and paste and move forward.

Whether or not that’s good medicine is almost…you can put that aside, but imagine in the event that something adverse occurs, and now we’re going into a litigation scenario, and the plaintiff’s attorney pulls out the patient chart and says, “There’s six days of exactly the same notes. What did you do, cut and paste? Did you really pay any attention?” Medical malpractice defense attorneys tell me, “I can’t defend that. We have to settle it.”

Think about issues like incidental findings. A patient enters the emergency room with lower right quadrant pain. It’s diagnosed as acute appendicitis. He needs to go up for a laparoscopic surgery. The emergency department physician sends him up to radiology to get cleared for surgery. He’s cleared for surgery. The surgery’s completed, he’s discharged the next day and is happily on his way.

One issue: when the radiology work was done, there was an incidental finding, a lung nodule. It had nothing to do with the appendectomy, but because of the electronic record structure that we have in place, that incidental finding showed up on page 23 of the discharge report.

Five years later, that patient’s back with lung cancer, and the fact that that incidental finding that showed up on page 23 of the medical record for that appendectomy never got into the patient’s hands results in a huge medical malpractice exposure.

The Affordable Care Act. The notion of changing a physician and institution’s payment structure from fee for service to either the Medicare Shared Savings Program or global capitation. In either of those scenarios, the entire payment structure has moved from the government or the insurer paying the physician for work that they render on a fee-for-service basis to giving them a lump sum of money and saying: “Take care of this population, and every time a service is rendered, you’re going to pull out of that bank account, if you will, the money necessary to cover the cost of that service.”

At some point, you get to one of two scenarios at the end of that year: One is you pulled more money out than necessary, and therefore you’re running at a loss; or there’s money left in the account at the end of the year and you provided a much more efficient delivery of care, in which case you have a profit.

Now imagine an adverse event occurs and you’re in that group that has profit at the end. The allegation that comes now toward you as a physician is you denied care to this person so you could profit, so it’s a very different landscape.

There are others: robotic surgery for the da Vinci and others. There’s not a town in this country that you can drive through that you won’t see a billboard that says, “Were you injured by the da Vinci robotic surgery?” They’re ubiquitous. Why? Because there’s an exposure there.

IJ: What can carriers, brokers and health care providers do to get in front of the curve?

Kelly: We need to help the policyholders, whether they’re physicians, or hospitals, or systems.

We need to help and support their efforts to, one, identify emerging risks and, two, identify techniques with which to educate on a specialty-specific basis the providers, whether they’re a physician, a nurse, an APRN (advanced practice registered nurse), a PA (physician assistant). We need to educate them at each of their roles, and then we need to help them introduce mechanisms and tools to reduce those exposures and then measure the effectiveness.

There’s variability within insurance companies. Some are very progressive; some have very focused efforts to support. But it’s difficult for an insurance company alone to really become a part of the fabric of an institution. It has to be a partnership.

The broker’s typically in between the insurance company and the insured, the hospital or the physician, so the broker has to become part of that.

So generally speaking, I guess I’d say some carriers are doing a good job. Most of them are not aware of what the real ramifications of these emerging risks are.

Topics Trends Carriers Medical Professional Liability