When you have a serious adverse event should you apologize, waive charges?

University of Michigan system cuts number of pending cases by 80%

How would you like to drop the number of cases pending against your program by more than 60%? A full disclosure policy that includes apologizing to patients and waiving charges on a case-by-case basis has had a dramatic impact on the outpatient surgery program and other departments at University of Michigan Health System in Ann Arbor. As part of the policy change, system administrators determined that there would be no settling when lawsuits were without merit. The number of cases dropped from 262 in August 2001 to fewer than 100 in January 2007. While hospital administrators won't go as far as saying that the entire decrease is due to the change in policy, the new policy was implemented in 2002.

Often administrators fear they will face financial catastrophe with a transparency approach to unanticipated outcomes, says Richard C. Boothman, chief risk officer at the University of Michigan Health System. "What we can say is that we have not seen financial disaster by being open and honest with disgruntled patients and families," he says.

Most of the time, when people bring a lawsuit, it's not for revenge or attribution, says Charles Boyd, MD, MBA, FACS, associate chief of staff at the health system and system professor in facial plastic surgery at the University of Michigan. "It's really to get answers, Boyd says. "That was the impetus for our policy."

Because the hospital is self-insured, fewer claims helped lead to a lowering of physicians' malpractice rates and eventual paybacks to the hospital of about $20 million, Boyd reports. However, the health system did pay increased attorneys' fees in the early years of the policy as they tried more cases to a verdict, Boothman says. Additionally, the health system is spending more on risk management and pro-activity, he says.

Apologizing for adverse events recently has come into the spotlight with a call from two national groups for hospitals to apologize and waive charges when certain "never" events occur. The Leapfrog Group, which is a Washington, DC-based national coalition of large businesses such as General Motors, and the Midwest Business Group on Health, a Chicago-based business coalition that represents dozens of employers, say hospitals should take these actions when one of 28 adverse events occurred. That list of events includes:

  • unintended retention of a foreign object in a patient after surgery or other procedure;
  • surgery performed on the wrong body part;
  • surgery performed on the wrong patient;
  • wrong surgical procedure performed on a patient;
  • intraoperative or immediately postoperative death in an ASA Class I patient.

In some states, words of sympathy are legally protected. (See list.)

The action from The Leapfrog Group and the Midwest Business Group on Health follows a policy a couple of years ago by HealthPartners, Minnesota's third-largest insurer, to not pay hospitals and surgery centers for cases involving serious adverse events.

Lawyer: Apologizing generally is a good idea

Apologizing can reduce the likelihood of a lawsuit, says Ken Braxton, partner with Stewart & Stimmel in Dallas and a medical malpractice litigator.

"I think what it does is that it gets over the hump of the patient thinking, 'You might be hiding something from me,'" he says. "It gets rid of the feelings of anger that may come up."

At Indiana Methodist Hospital in Indianapolis, a transparency approach to adverse events means a patient advocate joins the surgery staff in notifying patients and/or family members about any adverse events. "We want to make sure that when an incident occurs, we are the first to advise and notify the family and tell them what we are doing to correct situations." Indiana Methodist made national headlines in 2006 when staff publicly apologized to the families of three premature infants killed by a drug overdose.

Indiana's transparency policy regarding adverse events includes an online incident reporting system for staff and the public. One advantage of this policy is that it lets patients know the doctors and nurses are human and capable of error, says Lee Williams, MSN, RN, director of clinical operations for the perianesthesia nursing division. "By operating in an honest forum, it gives people the best opportunity to know what to expect, to know we're diligent about correcting any negative connotations toward our surgery."

3 tips regarding adverse events

Consider these suggestions when addressing your policy on adverse events:

• Follow your state law, and be straightforward with patients.

Be very candid with your patients when apologizing, Braxton suggests. "They're part of the team," he says. The message you should convey to the patients is, "We want to get through this together," he says.

Speak at a level that patients and family can understand, Williams advises. "You don't want to confuse them at all," he says.

Also ensure you are complying with your state regulations with the apology, Braxton advises.

• Approach area plaintiff's lawyers to notify them of policy changes.

When the University of Michigan went to a full disclosure policy in 2002, they went to area lawyers to let them know "business as usual" was not going to occur, Boyd says.

"If we felt we were in error, we would admit it to the family and patient, then we would try to settle the case," he says. "If we felt we were not, we would fight them aggressively."

• Establish a medical liability and review committee.

The University of Michigan established a Medical Liability and Review Committee, which Boyd co-chairs. The committee, which is multidisciplinary and multispecialty, includes lawyers and administrators. The group meets monthly. When the health system receives a notice of intent to sue, representatives of the risk management and quality departments interview the staff to determine the facts of the case. Members of the committee review each case to determine if there was a violation of the standard of care. The committee also examines whether the care adversely impacted the patient's outcome. A second committee, the Claims Management Committee, includes three physicians including the chief of staff, two financial officers, an insurance specialist, the chief risk officer, and the risk management director. This group makes decisions on settlement authority and whether to take a case to trial.

The committees are shielded from disclosure under state laws that protect quality improvement for the Medical Liability and Review Committee and protect both committees under "work product" privileges and attorney-client privileges.

The University of Michigan surgeons are happier with the new system, Boyd says. "They've recognized that we as health system are going to back them up and support them," he says. "If we feel they're not in error, we support them to the best of our ability."


  • For more on the University of Michigan Health System approach, go to www.med.umich.edu/news/umhsm.htm
  • To see The Leapfrog Group's sample policy, go to www.leapfroggroup.org. Click on the hyperlink where it says "Sample hospital policy, as it will appear on Leapfrog's 2007 Hospital Quality and Safety Survey." To see the list of 28 reportable events, click on the policy and follow the hyperlink, or go to www.qualityforum.org.
  • The Sorry Works! Coalition is a national group advocating a formal apology program for medical errors. For information, go to www.sorryworks.net.
  • To see an article titled " Disclosure of medical errors — Is honesty the best policy legally?" go to www.abanet.org.