As healthcare systems consolidate like never before, risk management is increasingly a concern of the entire healthcare organization.
The fifth-annual Excellence in Healthcare Risk Management Awards showcase hospitals and health plans that work closely with medical staffs and governance leaders in preparation for tomorrow's consolidated healthcare industry.
Judges were impressed that this year's risk management awards reflect more involvment from physicians as well as boards. They also said all the winners were well-integrated across organizational lines.
Judges gave awards for three categories: overall hospital risk management program, intervention strategy at a hospital or health system, and risk management program at a health plan.
This year's judges were:
Donald Arnwine, president of Arnwine Associates, Dallas.
Lois Bittle, president of Bittle & Associates, Baltimore.
Sister Irene Krause, president and chief executive officer of Sacred Heart Hospital, Pensacola, Fla.
Timothy McCormick, president of Park Ridge Hospital, Rochester, N.Y.
Robert Montgomery, M.D., medical director of Meritcare Health Systems, Fargo, N.D.
John O' Rourke, president and CEO of HealthLink, St. Louis.
Joseph Podbielski, M.D., president and CEO of Fallon Clinic, Worcester, Mass.
Geoffrey Segar, attorney with Ice Miller Donadio & Ryan, Indianapolis.
In litigation-happy Southern California, John Metcalfe's "dream team" of risk management personnel could measure up to the best of the Cochrans, Shapiros and Baileys.
Metcalfe is director of risk management at Long Beach, Calif.-based Memorial Health Services, which includes 729-bed Long Beach Memorial Medical Center and 221-bed Saddleback Memorial Medical Center in Laguna Hills, Calif. His staff's proactive team approach to risk management has kept pesky lawyers at bay for two decades.
"When you realize the total loss experience for liability risk represents less than 0.5% of the cost of discharging a patient in one of the most litigious areas of the country, you become confident that your risk management team is professional and arduous in their efforts to protect corporate assets," said Thomas Collins, president and chief executive officer of Memorial Health.
Last year alone, the program reduced its risk management costs by 68% to $1.9 million. Those costs include the five-member department's annual budget of $280,000, malpractice premiums and losses paid to patients filing claims against the system.
"That amounts to substantial savings, especially when it could be purchasing power somewhere else," Metcalfe said.
Memorial reported net income of $12.8 million on net patient revenues of $327.9 million last year, according to MODERN HEALTHCARE's 1995 Multi-unit Providers Survey. Memorial has assets of nearly $575 million.
When a potential liability arises anywhere within the system, Metcalfe and his team spring into action.
"We roll up our sleeves and make sure we have a participative program," Metcalfe said. "We find teams. They are task forces on the lookout for problems."
More than 20 such task forces have been created in the last five years alone. The groups, which include employees from throughout the system, tackle risk issues such as transfer of patients between hospital rooms and allowing observers in surgery.
But Memorial's program isn't practiced only within its system. Memorial actively promotes healthcare risk management outside the system. For example, Memorial was a co-founder in 1978 of the Southern California Association of Healthcare Risk Managers.
"We get a lot of people involved," Metcalfe said of the association, which includes risk managers, other health professionals and healthcare attorneys.
Anyone who's interested in replicating Memorial's risk management program has easy access to data, from costs to reported incidents, through its computer program. Memorial designed its own program in 1980 and has refined it over the years to track claims and other data.
"We need to benchmark all of our data," Metcalfe said. "A lot of systems don't keep that kind of information, but we've proven it can be beneficial when you're trying to better yourselves. We produce literally all the data that committees and boards would need."
For example, in workers' compensation, the team measured a 36% drop in reported claims from 1990 to 1994. That same period saw a 47% drop in litigated claims and a 38% cut in incurred losses.