Taking a risk to better manage OB risk

Medical malpractice liability is a persistent concern in healthcare. Nationally, costs related to malpractice liability, including tort litigation, malpractice premiums, and the costs of practicing “defensive medicine,” top roughly $150 billion annually.

One of the most significant risk areas is in obstetrics. A recent study from the American College of Obstetrics and Gynecology shows the medical liability climate forces OB/GYNs across the US to reduce gynecologic surgeries, drop obstetrics, move their practice out of state, or pursue other endeavors.

OB risk affects not only clinical practice, but also hospital management and finances. In addition to large, multi-million dollar line items for OB liability which tie up needed funding for services, there are other, less quantifiable risks that impact administrators. Social media and the consumer voice heighten reputational and public relations risk with hospitals and systems facing claims. Even if the hospital can support huge liability line items for OB liability risk, there is no protection from reputational risk in an economic environment where every patient counts because margins are so low. And in a value-based purchasing environment, which focuses on extending quality data to the consumer to drive performance, the PR liability from a major obstetrical bad outcome and claim could cost more in a fiscal year than any particular metric of VBP and public reporting.

Many organizations accept these extraordinarily high direct and indirect costs around practicing obstetrics in their hospitals and the corresponding claims management as part of the cost of doing business. But in a world where there are emerging best practices about how we manage obstetrical patients, we should, at the highest level of the c-suite, question whether that cost of doing business is still acceptable. The simple fact is, it doesn’t have to be this way.

The best way for administrators to reduce risks is understand an organization’s own data, trends and captive performance – and intentionally pursue opportunities for meaningful change.

Some organizations are leading the industry in these examinations and benefiting from the analysis. In 2016, Ascension Health undertook a study to analyze the key risk mitigation strategies that resulted in favorable loss trends / claim reduction for Ascension in recent years. Based on a Towers Watson’s National OB benchmarking study of >550 birthing hospitals, they found while obstetrics claims continue to represent the largest driver of healthcare claims, Ascension Health experiences lower claim frequency than the industry average. Notably, the study identified that a 31% reduction in perinatal serious harm events at hospitals was attributable to one factor: implementation of an OB hospitalist program at those facilities.

This reduction in harm events naturally translates to improved captive performance, and the opportunity to use the organization’s captive to fund new quality and perinatal initiatives like simulators for hospitals and create working revenue from claims cost-savings that can fund new organizational priorities to make a hospital best in class.

By conducting an honest self-inventory, proactively identifying ways to improve an operational process flow, and moving away from industry norms, hospital administrators can better manage their OB risk. Here are four strategies to consider:

Launch an early resolution programs. A medical liability response model based on full disclosure, transparency, and early resolution, and supporting uniform approach to communicating with patients, offers greater predictability.

Consider an OB hospitalist program. New hospitalist initiatives can likely be self-funded by the correlating reduction in reduced claims and events that are associated with OB claims. And when using a national company that tracks outcomes, those data analytics can lead to better practices that keep patients safer and healthier.

Encourage advancements in continuing education. Medical education should be more than meeting annual professional requirements. Hospitals should require that CME in OB offer strong data analytics and best practices based on those analytics.

Think broadly. Small changes add up, but organizations will benefit the most from an enterprise-wide commitment to value and ROI in risk management and patient safety initiatives in a proactive manner.

Organizations that accept enormous OB liability as the cost of doing business are reactive businesses. Our experience working with hospital OB units is a scarcity of data collection and virtually no analytics. By tracking and gleaning insights from data, hospitals can reduce their liability line item, institute a culture of even greater safety and care, protect reputational interest -- and increase the bottom line.

Heather Moore is Director of Risk Management, Quality, and Compliance for Ob Hospitalist Group, the nation’s largest provider of OB hospitalist programs.

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