Medical error disclosure not linked to more lawsuits

Hospitals and health systems have long debated the potential merits and consequences of informing patients of medical errors. Several medical centers have adopted such disclosure policies, but fears that transparency will garner more lawsuits remain prevalent.

One health system that has embraced the practice for nine years has concluded that those fears are unfounded. Disclosing medical errors and offering timely compensation to patients or family members do not increase medical liability lawsuits, according to a new study on the University of Michigan Health System's disclosure-with-offer program published in the Aug. 17 Annals of Internal Medicine.

Under the program, the health system conducts an internal investigation of all medical error reports, notifies patients and offers compensation when employees are found at fault.

The health system has had fewer lawsuits, lower liability costs and faster resolution of medical-error cases since the policy was implemented in 2001. Although researchers could not definitively link those trends to disclosure, they were able to conclude that instituting the program did not lead to more lawsuits.

"Patients trust the university is going to be honest," said Allen Kachalia, MD, lead study author and medical director for quality and safety at Brigham & Women's Hospital in Boston. "The fact that the university will offer them fair compensation avoids the need for them to file a lawsuit."

Nationwide, an estimated 1.5 million medical errors cost the U.S. economy $19.5 billion in 2008, according to a separate study by the consulting firm Milliman Inc., commissioned by the Society of Actuaries.

"Of the $19.5 billion in total costs, approximately $17 billion was the result of providing inpatient, outpatient and prescription drug services to individuals who were affected by medical errors," Jim Toole, managing director of MBA Actuaries Inc., said in a statement. "While this cost is staggering, it also highlights the need to reduce errors and improve quality and efficiency in American health care."

For the Michigan study, researchers analyzed 1,131 liability claims and associated costs from 1995 to 2007 at the UM health system. During that time, the average number of claims paid per year dropped from 53.2 to 31.7. The average time to resolve a claim went from more than 16 months to less than 11½ months.

The number of reports that led to lawsuits dropped significantly, from an average of 38.7 to 17 annually. Liability costs also dropped due to lower legal bills and patient compensation expenses, with the typical cost per lawsuit falling from $405,921 to $228,308, according to the study.

More research needed

"It's encouraging, and I think [the study] should be read by the people who are skeptical that this can't work," said A. Russell Localio, PhD, MPH, associate professor of biostatistics at the University of Pennsylvania School of Medicine.

Nevertheless, although it provides interesting information specific to the UM program, the study doesn't translate well to other institutions, said Localio, who wrote an editorial that accompanies the Annals study. Researchers were unable to distinguish between error reports originated by employees, patients or family members and could not compare the findings to an outside control group, he said.

"It is going to take more sites, more experience and more evidence that these things can work more broadly in other jurisdictions," Localio said.

The American Medical Association Code of Medical Ethics says physicians are ethically obliged to disclose what happened "when a patient suffers significant medical complications that may have resulted from a physician's error."

Other institutions with disclosure policies include the Veterans Health Administration, University of Illinois Medical Center at Chicago, Stanford University Medical Center in California, Kaiser Permanente network, Johns Hopkins Hospital in Baltimore, and Children's Hospitals and Clinics of Minnesota, according to the Agency for Healthcare Research and Quality.