Enterprise risk management can be advanced by joining forces with captives. Charles Conklin, director of risk management for Temple University Hospital and Health System, Philadelphia, explains how.
Rising claim costs, evolving regulatory requirements and emerging liability issues are creating an urgent requirement for more formalized risk management initiatives among hospitals and health systems. With more than half of US hospitals using captive or non-traditional insurance entities, some have found success working creatively with their captive insurers to fund these programs.
Temple University Health System in Philadelphia is one such organization. Through its affiliation with Temple University School of Medicine, this three hospital system (or five-hospital campus system) offers comprehensive inpatient and outpatient services to the surrounding community and highly specialized tertiary and quaternary services to the entire region.
To date, the health system has worked with its captive to fully or partially finance a range of system-wide risk mitigation initiatives including:
• Online training programs for new residents;
• Specialized ob/gyn training programs for all attending physicians and labor and delivery nurses;
• A medical device recall and alerts management program; and
• Use of Temple University Medical School’s advanced simulation laboratory for hands-on training regarding informed consent, disclosure, and the use of Universal Protocol.
Furthermore, the captive is underwriting the roll-out of an informed consent and patient education system to standardize vital patient communications across the enterprise.
As all risk professionals know, there are two prongs to clinical risk mitigation: proactive initiatives (education, training and the use of loss prevention techniques) and reactive initiatives (route cause analysis, intensive investigations). Temple University Health System is fortunate to have a forward-thinking captive that recognizes the value of a proactive approach.
Key ways to obtain risk mitigation funding
In general, there are four avenues risk managers can pursue to obtain funding for enterprise risk management (ERM) initiatives. One is to use the analysis of a large claim essentially to scare the organization into funding. While this is almost never the most desirable approach, past errors, or the root cause analysis of a unique situation, can sometimes serve as motivation for changes in process, policy, technology or equipment. At Temple, for instance, the analysis of one near-miss event involving a transport team revealed the need to purchase new convertible gurneys.
The second, more analytical approach to securing funding from the organization is a thoughtful and detailed review of a risk management project’s anticipated benefits. This tactic, although perhaps less urgent and controversial, usually requires strong salesmanship to achieve success.
A third option involves applying for outside funding, typically via a grant, which may or may not be especially lucrative in terms of the effort required relative to the size of the award. Occasionally this choice dovetails with the last alternative: working with the organization’s captive insurer.
For instance, in Temple’s case, the captive agreed with an assessment that the organization could benefit from more risk management staff. The insurer provided a grant that paid the first year’s salaries for several newly hired risk managers at three facilities. Although Temple had to absorb the costs after year one, the captive essentially shouldered the startup costs to lay the foundation for a more aggressive risk management program.
Building innovative risk management strategies
Risk managers should understand that a captive’s willingness to fund mitigation efforts depends in part on how well it believes those programs will reduce areas of potential exposure. Most insurers take into consideration prevailing trends surrounding claims and lawsuits. That’s one of the reasons Temple’s captive has decided to invest in a medical device recall alert and notification system from ECRI Institute, for example.
The insurer also has found it worthwhile to pay for an online risk management training program for new residents and attending physicians. Residents must complete four hours of training before they can enter the residency program; attending physicians must complete online training every two years as a condition of reappointment.
Another major program Temple has undertaken with captive financing is an interactive online training program for ob/gyn—a specialty often considered the #1 source of claims. The program includes four major courses that cover topics such as fetal monitoring and shoulder dystocia for all obstetric residents, attending physicians, labor and delivery nurses and nurse midwives. They are required to take the courses annually or biannually, depending on their roles.
Full funding has also been provided for a curriculum that was developed in conjunction with Temple University School of Medicine that leverages a state-of-the-art simulation lab. This is used by residents and attending physicians for training on informed consent, disclosure, and the use of The Joint Commission’s Universal Protocol and the surgical safety checklist.
The consent and disclosure simulation exercise works this way: a physician is given a script to obtain consent from a patient for a particular procedure.
Actors are used as patients and the entire process is observed by attending faculty and risk management personnel. Once the consent is completed, the clinician leaves the room and is given another script telling him or her that one of the complications discussed in the consenting process has occurred and the clinician now has to return to the bedside, disclose the complication and obtain consent from the patient for another procedure to address the complication.
Once the exercise is completed, a comprehensive debriefing session is done with the clinician, the ‘patient’ and the observers. The laboratory allows for realistic scenarios, with full evaluation capability. The program has proved to be hugely successful and well received by the residents.
Making a technology investment
The captive’s commitment to ERM goes further than training. Startup and ongoing costs for a web-based informed consent technology (the iMedConsent application from Dialog Medical, a Standard Register Healthcare company) are being underwritten by the captive as well. This system allows physicians who obtain consents from patients to do most of the work they previously did on paper directly online. Its library includes forms detailing the risks and potential complications associated with more than 2,300 different procedures.
Equally important, it also allows providers to enter detailed patient-specific information when required. This program is planned to be implemented in early 2014.
The goal is to virtually eliminate inconsistencies from physician to physician and from hospital to hospital. Electronic signature pads that complement the solution will further standardize the process and allow forms to be saved in a fully digital format accessible via the Epic system and other electronic health records throughout the Temple enterprise. The system also offers teaching tools, such as anatomical diagrams and detailed procedural information, that help educate patients about what to expect before, during and after their procedures.
In that sense it is really about providing excellent patient care while also protecting the hospital from liability. Through technology, patients gain realistic expectations of what their procedures can accomplish as well as the information they need to better comply with their care plans—without relying strictly on memory.
Lessons learned
Temple University Health System has developed a successful partnership with its captive insurer to fund ambitious, proactive risk mitigation programs.
These programs illustrate how strategic goals can be accomplished through a forward-focused collaboration between a healthcare organization and its captive.
Other risk management professionals may want to use Temple’s experience as an example when building cases for their own ERM initiatives. Some creative thinking around financing—supported by a strong rationale for proactive risk mitigation—may be just the right path for obtaining support.
Charles Conklin is the director of risk management for Temple University Hospital and Health System, Philadelphia.
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