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Risk Management

Involvement in a professional liability lawsuit, even if successfully defended, carries a high financial and emotional price for the physician. While malpractice insurance premiums continue to rise dramatically, this cost is insignificant when compared to the "personal costs" of being involved in a claim.

In past years, these costs were thought to be an inevitable cost of doing business. However in today's healthcare arena, malpractice suits have tended to garner more publicity and the results of these suits are more easily assessable through various data banks. Additionally, managed care organizations, IPAs, etc. have increasingly tightened their standards for monitoring participating physicians as a way to reduce their own liability. It's not only the size of the settlements and verdicts, but the number of claims that's beginning to affect physicians' abilities to practice.

Numerous studies confirm the fact that there is little correlation between medical negligence and malpractice claims. These studies show that malpractice claims often result from communication errors and, in essence, issues of patient dissatisfaction. Patient dissatisfaction begins with poor communication which frequently leads to unreasonable patient expectations and a lack of understanding about one's own care. Hence the patient is surprised if there is an undesirable outcome. Further, when patients do not understand their care, they are less likely to comply with their physicians' instructions and non-compliance has a direct relationship to poor outcomes. Patient dissatisfaction is therefore the primary reason for malpractice claims.

It is estimated that nearly 60-70% of all claims are preventable by incorporating certain risk management principles into a physician's practice. Risk management attempts to prevent lawsuits by examining the primary sources of liability in a medical practice and then organizing and designing systems, policies, procedures, and protocols that reduce identified liability exposures. Various systems in a typical medical practice are susceptible to design enhancements that will prevent or at a minimum reduce potential lawsuits including: patient scheduling, medical records, informed consent, information flow, patient relations, billing and collection, clinical staffing, credentialing, purchasing, managed care contracting and equipment and facilities. Each of these areas deserves attention with a special focus on what could go wrong.

The Risk Management Program developed by Marc H. Bailey & Associates is designed to identify and assess the specific problems/deficiencies in each of the following areas which are the primary sources of liability claims faced by today's physicians:

    Informed Consent
    Breach of Confidentiality
    Failure to Follow-up
    Referral Liability
    Hiring and Credentialing
    Equipment Maintenance or Use
    Marketing Liability
Prescribing Practices
Scope of Practice
Utilization Review Liability
Patient Abandonment
Formulary Development or Use
Medical Record Maintenance

In assessing the practice's potential liability exposure, an extensive 240 question checklist is completed through interview with the physician and practice manager. Each problem/deficiency identified as a result of this assessment is discussed in the Report of Findings and Recommendations to include an analysis of how the particular problem or deficiency exposes the practice to unnecessary liability. The report also presents recommendations for changes or improvements that should be implemented to correct the identified problems along with options or choices on how to implement the recommended actions.

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Marc H. Bailey and Associates • 5013 Butterfield Court • Culver City, CA 90230 • Tel. 310.838.9170 •