Organizational Structure of Risk Management in Healthcare

Healthcare organizations typically have several departments and individuals responsible for a wide range of activities that have an effect on mitigating the organization’s risk by optimizing the patient’s experience. Often these activities are overseen and managed by several departments, and rarely do these departments report to a single individual who is able to coordinate their activities, maximize data collection and analysis and avoid duplicating work product.

An organizational review of the risk management program evaluates the effectiveness of how risk is managed at your hospital or healthcare system. The purpose of such a review is to determine whether there is a more efficient, patient-friendly, and cost effective way to manage areas that are sources of risk to your patients, your employees and your organization. Areas that may be reviewed include:

• Infection Control
• Patient Safety
• Patient Grievances
• Quality Management
• Compliance
• Employee Safety
• Risk Management
• Employee Education
• Patient Education
• Insurance Purchasing
• Claim management for workers compensation claims
• Claim management for professional liability claims

A focused study would include a review and assessment of the organizational structure of the functional areas noted above. Alternative structures would be discussed to include a review of the advantages and disadvantages of each. Occasionally, an organization is not looking to change but rather requesting validation that the current structure is effective and consistent with highly effective risk management programs. A review of this magnitude for a single hospital would likely require 3 days of on-site work.

Focused Clinical Risk Assessments

There may be an identified need to have a focused review of a clinical department or service. This identified need may arise as the result of incident report trends, frequency or severity trends in malpractice claims or lawsuits, employee dissatisfaction concerns, patient safety data and patient complaints. The purpose of this review is to provide an in-depth analysis of the practices, policies or behaviors present or not present that pose risk to the organization. This analysis will assess your organization’s compliance with Joint Commission requirements and medicare COP and other regulatory agency requirements. Risk management improvement opportunities will be identified and recommendations made.

The process for conducting this review will include a review of relevant department policies and procedures, a review of a sampling of patient medical records, interviews with nursing or department managers, nursing or department staff, and the medical director of the department. A review of this magnitude for a single hospital may take 2 to 3 days of on-site work.

Professional Liability Claim Processing and Administration

If your organization manages or is considering managing professional liability claims in-house, it is important to know whether your process for managing claims and incidents is as effective as it could be. A review of this process would include an evaluation of the incident reporting system, reports generated from the system, follow-up of serious events reported, how and to whom these serious events are reported, and early intervention strategies to reduce the potential for litigation.

Tools and report card metrics for evaluating claim management effectiveness will be suggested with samples provided. Internal investigation processes and reports will be reviewed and evaluated and recommendations made if there are identified areas for improvement. The goal of an effective claim management program is effective stratification of claims with early intervention of those that are likely to be settled quickly, appropriate referral to outside counsel and early, thorough investigation of the patient event including retaining expert opinion quickly. A review of this magnitude for a single hospital would take 1 to 2 days of on-site work.

Professional Liability Claim Analysis

Professional liability claim management is as much art as it is science. An organization can experience substantial financial loss resulting from an unfavorable turn in a malpractice claim. Often a second opinion evaluating attorney management, defense strategy, and decision making regarding settlement or trial is recommended particularly for high exposure claims where potential loss is high, medical facts are complicated, and the plaintiff is sympathetic.

Our evaluation would include a comprehensive review of the litigation file and documents contained there-in such as, deposition transcripts of key witnesses, expert opinion reports, defense counsel reports and other documents related to the claim. Consideration would be given to the venue factors that may be important to the decision such as the presiding judge and recent jury verdicts on similar claims. Defense counsel would be interviewed regarding file documents and case strategy. The goal of this review is to offer a second opinion on the defensibility of the case, the effectiveness of defense counsel, the quality of the reports provided, the quality of the file and a second opinion on claim disposition.

Professional Liability Claim File Audits

Audits by outside parties are a familiar activity for healthcare organizations. Whether your organization engages a third party administrator (TPA) to manage claims, or manages the claims in-house, it is an important quality management activity to conduct annual claim audits. The process includes a random selection of a sampling of claim files for in-depth review. The review will include an evaluation of the following,

• Initial file preparation
• Orderliness of the file
• Timely followup
• Quality and comprehensiveness of file documentation
• Defense counsel reporting and management of the claim
• Reserve setting procedures
• Pattern of reserve changes
• Reserve recommendations

The timing for our onsite work is dependent on the claim count and the sample number of claims. Our report will identify deficiencies observed and offer suggestions for improvement.