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The elephant in the strategic management room: Medical malpractice liability

October 16, 2019

The AI-driven technology offers one additional advantage from a medical malpractice liability standpoint. If something does go wrong during the birthing process, the hospital or health system now has a complete record, backed by evidence-based practices, to support the decisions that were made as well as when they were made.

Plaintiffs’ lawyers are typically looking at their chances for a big payday when considering whether to bring a large lawsuit against a physician or hospital. Having this type of record can demonstrate conclusively that everyone involved did all they could with the information they had, making the prospect of a lawsuit far less attractive. Of course, plaintiffs’ attorneys also are aware that AI exists in other mission critical industries and are already publishing editorials and giving lectures calling for AI analytics to become part of the standard of care in healthcare. It is an argument they will win over time.

Measuring the effectiveness
Any time money is involved, the natural question is, “What has been the ROI for our efforts?” In this case it can be difficult to measure, for two reasons.

One, of course, is that it’s difficult to accurately measure the financial impact of things that didn’t happen. How do you determine how many adverse events were prevented and how much money you saved as a result?

The other is the financial impact of an adverse event isn’t typically felt for two years or more. It can take 18 months for a malpractice claim to be filed after the adverse event occurs. Then comes the discovery and negotiating phase, which can take many more months. As a result, the impact of changes implemented today may not be felt for a few years.

To judge the program’s effectiveness, hospital and health system risk managers and other executives must look across a minimum of three to five years. It is then that the true impact will be seen, which then informs their strategic planning for the future.

Shrinking the elephant
As long as human beings are different from one another, medical malpractice liability will always be a concern for healthcare organizations. But by investing in the right people, processes, and technology, they can at least shrink the elephant in the room, leaving more money to invest in a virtuous cycle of improvement that leads to better care at lower costs.

About the author: Larry L. Smith is vice president of risk management for MedStar Health and president of MedStar Health's captive insurance company, Greenspring Financial Insurance Limited, Inc. of Cayman.

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