The evolving liability landscape and obstetrical care 

August 18, 2020
Heather Moore
Heather Moore

Hospital risk leaders are increasingly walking a liability and malpractice claim tightrope.

Hospital risk leaders are increasingly walking a tightrope and maintaining a balance of providing high quality obstetrical (OB) care at their facilities, and the risk associated with medical malpractice claims. The 2019 year proved daunting as more medical malpractice batch claims emerged, and medical malpractice claims settling or obtaining jury verdicts of more than $10 million grew 84%. And if that’s not enough to cause them to lose their balance, now there is COVID-19. However, as the COVID-19 crisis begins to slow in certain parts of the country, risk professionals can turn their attention back to strategies to provide high quality OB care that can successfully navigate the professional liability environment.

A study of medical professional liability claims in JAMA Internal Medicine provides some context and shows why the introspect now is more important than ever. The analysis showed both good news and bad news for obstetricians/gynecologic (OB/GYN) surgeons. While paid claims decreased overall, with a 55% decline between 1992 and 2014, payments per claim and claims settling for more than $1 million steadily increased. And the trend shows no sign of abating; just last year in July, a jury awarded $229.6 million in the case of an infant who suffered brain injury during birth, the largest medical malpractice verdict ever in the United States. That case was quickly followed by another jury award of $101 million in Cook County, IL in November 2019 related to another infant who suffered brain damage during birth. And while these cases do still represent a small fraction of overall OB/GYN claims, there is steady increase in both the “Mega” (>$10M) and “Nuclear” (>$100M) closed claim numbers.

With this movement within medical malpractice relative costs, and the additional economic burden from COVID-19, 2020 may be the year that hospitals and OB/GYN clinicians reach a tipping point on whether they can accept any more potentially avoidable risk as merely a cost of doing business.

As they also see tightening in the professional liability pricing, risk leaders and hospital executives must revisit their processes for mitigating OB/GYN risk, and better managing the often loss leader of claims at their facility, all by ensuring high quality OB/GYN patient care that mitigates the highest areas of patient risk Whether from the magnified economic impact of COVID-19, professional liability pricing pressures, or heightened loss experience, hospitals will be forced to highlight how they are proactively and innovatively managing their risk more successfully than their counterparts to survive financially and ensure their Women’s and Children’s service lines remain profitable.

At the most extreme end of the spectrum, hospitals and clinicians can continue to respond within a fear based culture that often leads to costly defensive medicine practices not always in the best interest of the patient. Conversely, hospitals can proactively take steps to address risk mitigation and quality control and improve both quality of care and patient experience, significantly driving down the likelihood of a medical malpractice claim being successful.

Hospitals that work strategically to minimize the former and accelerate the latter will experience better legal and financial - as well as clinical - outcomes.

To start, healthcare executives should address gaps in quality management practices affecting liability. A 2016 paper examined the practice of medicine in response to liability fears, as opposed to changes in the way in which the clinical standards expected of physicians are determined. The authors observed that, “...(p)hysicians will not deliver higher quality of care simply because they are guessing that this might be expected of them at court. Rather, they may deliver higher quality care as a result of explicit directions under the law to do so.” Similarly, on the hospital (rather than regulatory) level, revising quality management processes may improve quality and minimize risk over time.

At the heart of this process is reduction of errors and increasing risk mitigation strategies. At Ob Hospitalist Group, we advocate for our hospital partners to have alignment between departments and potentially operate under one organizational structure where issues are interrelated (e.g., risk management, quality, clinical excellence and compliance departments). Traditionally in healthcare systems or hospitals, these functions tend to be siloed. But in an era of increased merger and acquisition activity, there’s a new opportunity to proactively revisit this structure.

Management consulting firm McKinsey identified nine areas where hospitals can adopt best practices to excel in tougher conditions including technology, funding, and measurement. New hospital ownership does not make a difference. A New England Journal of Medicine study looked at changes in quality of care both before and after ownership changes in the healthcare space and found that impacts on process measures of quality were inconclusive. Quality neither improved, nor deteriorated. That suggests healthcare organizations are better served maximizing their internal processes and organizational effectiveness proactively to manage patient complaints and/or claims.

In addition, hospitals need to go beyond reactive risk management and embrace intentional strategic disruption. In OB, most hospitals have relied on community OB/GYNs to “staff” Labor & Delivery departments. This traditional model yields care that can be fragmented, while adverse events related to delays are too often assumed to be part of the package.

In an OB hospitalist model, hospitals are staffed with board-certified OBs 24/7 who provide care to women at all stages of labor and delivery. When the community OB arrives, the OB hospitalist either turns over patient care or assists the community OB as needed to ensure successful co-management of the patient.

In 2016, OBHG and one of our system partners undertook a study to analyze the key risk mitigation strategies that resulted in favorable loss trends/claim reduction for the system in recent years. The study found that a 31 percent reduction in perinatal serious-harm events at hospitals was attributable to one factor: implementation of an OB hospitalist program at those facilities.

Finally, hospitals should be doing all they can to improve the patient experience. As healthcare consumers, patients have become increasingly empowered and increasingly aware of what their role is in the broader healthcare system. There’s an expectation they will receive good, high-quality care, and that they will look to an accountable party when that care falls short of their expectations. Their choices and satisfaction are reflected in hospital patient satisfaction scores and reimbursements. In the worst-case scenario, it may also be reflected in malpractice claims.

Having protocols in place and a wealth of effort expended on improving the patient experience does not necessarily correlate with good care; similarly, patients can have great care and an unfortunate adverse experience.

But in the modern age, everything is magnified and accelerated. In the past, if there was an adverse patient experience or medical events that didn't go as planned, hospital systems had some time to plan a public relations strategy and execute a response. Now, patients communicate dissatisfaction in real-time on social media, which can be very detrimental to a clinician's and/or a hospital’s reputation and risk. Going forward, hospitals and healthcare systems must be more proactive in understanding the root causes driving patient experience and their perception of care.

It's easy to respond defensively to the changing healthcare liability market, but healthcare executives are not powerless. They have the ability to take proactive measures to improve quality of care and risk reduction. Hospital and risk management executives need to master the tightrope of underlying factors that fuel a litigious environment in a holistic manner, and implement quality improvement strategies that address the underlying tensions in the market.

Heather Moore is Vice President of Risk Management, Quality, and Compliance for Ob Hospitalist Group, the nation’s largest OB/GYN hospitalist organization, directing national risk strategy and operations as well as leading organization’s national perinatal initiatives and areas of focus.