Healthcare systems that are consolidating in hopes of future financial success may be leaving themselves vulnerable to lawsuits by ignoring uncharted areas of risk.
Today's swift move by providers to integrate to deliver more care in outpatient settings is bringing increased risk of medical liability, but it's risk that few are watching.
"Historically, when it comes to outpatient care, the attention hasn't been focused there," said B. Frederick Becker, chairman and chief executive officer at Deerfield, Ill.-based MMI Cos., which provides insurance, risk management and consulting services to some 400 healthcare organizations and more than 2,000 physicians.
"Attention to quality and risk has a direct relation to cost," Mr. Becker said. "Risk in a healthcare setting is where you have a potential for a (major) loss."
Inpatient care continues to register the most hospital liability claims. And about two-thirds of the total judgments are in three areas-nursing care, emergency departments and surgery-according to data compiled by St. Paul (Minn.) Fire and Marine Insurance Co.
Those areas have routinely been the largest source of claims since 1988, said executives at St. Paul, which handles liability insurance for approximately 1,500 hospitals in 47 states.
But concern is starting to shift to risk management in outpatient care as healthcare systems integrate more clinics, ambulatory-care centers, home-care facilities and other outpatient operations into their fold.
The risk management function in those outpatient areas is virtually nonexistent, and that could be dangerous, analysts say.
The number of outpatient surgical operations grew 242% from 1981 to 1992, according to the American Hospital Association.
Meanwhile, during the same time period, inpatient surgical operations dropped 32%.
"When you look at who's filing the claims, it's outpatients," said Barry Johnson, senior manager of corporate communications for St. Paul. "They file outpatient claims in a higher proportion than they should."
Outpatient surgery claims surged to $8.7 million in 1992 and 1993 from $5.1 million in 1990 and 1991 at St. Paul-insured hospitals. The average cost per claim jumped to $43,282 in 1992-93 from $25,293 in 1990-91, St. Paul said.
Meanwhile, inpatient claims have dropped somewhat. Inpatient surgery claims were an average of $36,941 per claim, totaling $41.6 million in 1992-93. That compares with an average claim of $40,799 in 1990-91, for a total of $44.8 million.
As providers consolidate, they may downsize their operations in one area while acquiring new healthcare entities they aren't as familiar with, consultants say.
When consolidating, risk management analysts say a lot of bases need to be covered, particularly when physicians and hospitals join in a venture.
"If two hospitals get together and have divergent medical staffs, how do you make sure they are following the same procedures?" said Geoffrey Segar, an attorney with Ice Miller Donadio & Ryan, an Indianapolis law firm.
"There are all sorts of risk issues in these new arrangements," he said.
"Even with those (merged hospitals) that are established, it's probably too early to tell on the risk issues, except that you know they're going to happen," Mr. Segar added.
Issues of concern for merging providers also include different types of credentialing of healthcare workers and incongruous admissions criteria.
When providers are preparing to merge with other entities, they should "pay attention to short cuts of the partner," said MMI's Anna Marie Hajek, senior vice president.
Hospitals and healthcare systems that lost suits, settled, and paid out judgments could have prevented their problems, according to MMI. Providers need to analyze their own data, as well as that of their business partners, paying attention to patient demographics.
Some of the systems that left themselves open to lawsuits "didn't pay attention to claims data," Ms. Hajek said.
In most cases, risk managers aren't privy to negotiations and other discussions involving their own hospital's consolidation efforts, said Donald Arnwine, president of Arnwine Associates, a Dallas-based healthcare consulting firm.
"I don't believe risk management has paid much attention to the integration of the system," Mr. Arnwine said.
"Risk management grew up in an acute-care sector, and it's still making its living there. Some risk managers aren't having the opportunity to have a forum in the integration of their systems," he added.
As capitation grows in healthcare markets across the country, providers have even more to be concerned with, analysts said.
"You aren't going to get paid for whatever it costs you anymore," Ms. Hajek said. "As consumer expectations change, litigation isn't far behind."