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The Risk Management Priority – Protecting Financial Integrity

The last time I sat through a hospital orientation program, a man came into the classroom and gave a one-hour lecture on his role as a risk manager. His focus was on incidents that resulted in or were likely to result in a lawsuit. He told us about the case of a ten-year-old boy who is growing up with cerebral palsy that has caused severe spastic paralysis over his entire body. He said, “While I acknowledge that the hospital staff screwed up and contributed to this boy’s terrible affliction, it is my job to protect the financial integrity of this institution. So, we are doing what we can to look for ways to defend against the allegations. The upper management decides and I follow orders.”

The Moral Divide

The striking aspect of this comment was that accepting responsibility for wrongdoing had no place in this man’s conversation. This is a microcosm of the corporate culture – one man or woman does his or her job to the best of his or her ability while the ethical considerations are someone else’s responsibility. Middle managers often pass the morality buck to upper management, who pass it to the chief executive officer, who in turn pass it to the board of directors or trustees. The directors or trustees will consider only the financial welfare of the stockholders or the public trust.

The Ideal Risk Manager

The appropriate focus for a risk manager is to prevent malpractice and accidents and not just lawsuits for such things. The ideal risk manager will carefully study the common complications and injuries that take place because of being in the hospital and recommend changes that will prevent such undesirable occurrences. This activity should begin with investigating events that have already happened and assigning culpability where it belongs. This means also identifying any mitigating circumstances that contributed to the blunder or omission. This utopian risk manager will then submit a report holding nothing back.

The Real Risk Manager

Regrettably, in the real world, risk managers and investigators must walk within political boundaries. Their investigative goal is to counsel employees to document problematic events in a way that will not provide any evidence to the plaintiff in support of a malpractice claim. The usual advice for filling out an incident report is, “Document only what you find. For example if a patient falls, just say ‘patient found on floor’. Describe the injuries if any, but do not say anything about how he fell. If there is anything in your observation that might suggest a cause of the accident like side rails down or slippery stuff on the floor, do not say anything about it. We do not want you to lie, but we also do not want you to offer any information or opinions that might help the plaintiff and hurt our defense.”

The Two Definitions of “Risk”

There seems to be two definitions of “risk” in “risk management”. One is the probability of losing money and the other is the likelihood of the same type of accident happening to the same or another patient. Hospital managers do not have to choose between one and the other because if they prevent further accidents they will save tons of money. During the past year, I have reviewed several cases in which the patient fell out of bed or from a chair two or three times with the permanent or fatal injury arising from the last fall. In each of those scenarios, if the hospital or nursing home management had a risk management program focusing objectively on the cause, the serious injury would have been avoided. Therefore, the hospital’s risk management strategies were a factor in producing the injuries.

Case in Point

For example, John B. was a 76-year-old man who went to a local community hospital by ambulance after complaining of chest pain. The admission assessment revealed that while at home, he got up at night to go to the bathroom and fell and sustained some bruising on his left elbow and hip. The medical history revealed that he had mild emphysema with a chronically reduce blood oxygen level. Despite these obvious red flags, the nurses did not do a fall risk assessment and fall prevention was not a part of the care plan.

On the third night of admission, John wandered out into the hallway at two o’clock in the morning and fell in front of his doorway. The nurses who witnessed this picked him up and put him back in bed. The charge nurse filled out an incident report and gave it to the nursing supervisor. The supervisor counter signed the report and recorded the incident in the daily nursing office log. She also sent a copy to the risk management department. No one conducted any investigation nor revised the patient’s care plan.

Three days later, one of the nurses found John on the floor in his room unconscious at six o’clock in the morning. She called for help and put him back to bed with the help of two others. Within six hours, John died of massive brain hemorrhage. An inquiry would have uncovered a serious problem in a lack of real risk management at the bedside level. The root cause of this untimely death happened because the slipshod attitude toward safety started at the top and oozed downward toward the staff.

Should we Punish the Lawyers or Hold the Real Culprits Accountable?

Several doctors and politicians are saying that there are too many medical malpractice lawsuits. The current rhetoric seems to blame personal injury attorneys for this problem, so the plan of attack is to take away the rights of victims to get justice by creating roadblocks in malpractice legal procedure and reducing the maximum contingency fees for the plaintiffs’ attorneys.

This argument presupposes that hospital corporate executives, doctors and nurses are doing the best they can and the casualties are unavoidable. In my view, we need to seek federal and state legislation that will mandate fiscal responsibility and standards for safe hospital care. This law should also hold people in management positions personally accountable for being negligent.

The Call for New Legislation

Under current law, if a state or local health department investigates a patient’s death after receiving a complaint and finds wanton disregard for patient safety at the managerial level, the harshest penalty they can impose is a fine. In other words, when high level health care executives commit criminal negligence resulting in a person’s death, the current government response is to leave the offenders in charge and take money away from an institution that is already strapped for cash rather than charging the responsible parties with a crime or even insisting on their dismissal.

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