Building a Proactive External Peer Review Program & Estimating ROI: How to Get Started

The following is an excerpt from a full white paper by AllMed. To view the entire white paper, click here.

The current economy and the escalating frequency of litigation have generated the demand for increased risk assessment to identify, control, and prevent medical risk (adverse events). Although the basic purpose of a risk management program is to minimize the cost of loss, it is also a means of improving and maintaining quality patient care. An effective risk management program begins with a system for identifying the specific events likely to result in loss and the general clinical areas of risk exposure. Identified risks must then be prioritized in order to expend organizational resources in the most cost-effective manner. In addition to reliable recognition of risk exposure, effective risk prevention also depends on determination of its causes, implementation of corrective action, and continual monitoring of risk indicators.

Risk management plays a major role in limiting vulnerabilities in order to prevent, monitor, and control areas of potential liability exposure. According to a recent industry analysis, claims against hospitals have entered a growth phase in which both the frequency and severity of claims will increase. The American Society for Healthcare Risk Management  and Aon Risk Solutions expect the total cost of medical malpractice claims per hospital bed to grow 5 percent annually. This, in addition to the uncertainties associated with healthcare reform, presents hospitals with the ongoing challenge to undertake more proactive risk management methods focused on the reduction of medical errors by improving physician performance. When properly executed, external peer review can reduce medical errors by consistently providing objective feedback to physicians and by identifying performance-enhancing corrective actions for them and for hospital operating and/or training processes.

External peer review decreases risk and improves quality of care

When properly executed, external peer review can reduce medical errors through objective evaluations performed in a non-punitive, educational context that supports a healthy culture of continuous improvement. This results from physicians knowing that their work will be objectively evaluated at regular intervals by board-certified specialists with the same credentials and from similar practice settings, thereby leading to improved quality of care and patient safety and, over time reducing a hospital’s professional liability claims and costs. Ongoing evaluation of physicians can also uncover problematic practice patterns, as well as physician- and hospital-level issues that need to be addressed.
Results of a recent RAND study found a highly significant correlation between the frequency of adverse events and malpractice claims, It found that, on average, a hospital that shows a decrease of 100 adverse events in a given year will also see a 37 percent decrease in malpractice claims. Similarly, a facility that shows an increase of 100 adverse events in a given year will see, on average, a 37 percent increase in malpractice claims.

External peer review can play a key role in reducing or eliminating risks associated with increased malpractice claims. In addition, it can directly lower the cost of delivering quality care, with the greatest impact on high-risk surgical specialties such as cardiology, neurology, orthopedics, obstetrics, and emergency medicine. Unlike internal peer review, which only looks at sentinel events, external peer review can help hospitals to discover, highlight, and deal with physician performance issues quickly and efficiently before they turn into claims. In addition, external peer review avoids conflicts of interest that can arise from economic, professional, or social ties among physicians within a single institution. It may also be an effective solution for hospitals that lack adequate physician resources to conduct timely performance analysis.

Comprehensive risk management

Whether external or internal, all comprehensive risk management programs need to both proactive and reactive steps to prevent the occurrence of adverse events. The American Society for Healthcare Risk Management defines risk management as the process of making and carrying out decisions that will assist in prevention of adverse consequences and minimize the adverse effects of accidental losses upon an organization. A comprehensive risk management program is both reactive in its response to events that have already occurred and proactive in its prevention of additional events.

Risk assessment
Hospitals use a variety of means to identify risk cases and risk exposure (adverse events). In reactive case identification, an organization assesses for risk in cases identified external to the organization as being problematic. In proactive case identification, an organization initiates the identification of cases that are more likely than others to carry risk.

Reactive case identification
The simplest approach to identifying risk is the assessment of clinical events that come to a hospital’s attention in the ordinary conduct of business. The clearest example of this is a lawsuit. Assessment of legal actions against a hospital usually requires careful examination of the specific circumstances of the clinical case, including a peer review of the medical record.

The review of medical records requested by attorneys is another method by which risk can be identified. An attorney requesting records indicates that the case involves some legal activity, and some organizations routinely review all such cases. However, reasons for the request do not necessarily indicate wrongdoing by providers or the institution. A cursory review of requested records may help to identify those cases requiring more detailed review.

Review of patient complaints is a good way to detect cases with risk and poor quality. Many hospitals have a formalized mechanism for handling patient complaints. Focused review of complaints that suggest risk or poor quality can help to uncover problematic areas.

Proactive case identification
Utilizing a systematic external peer review program can help hospitals gain an ongoing proactive evaluation of each physician’s performance at a summary level. Products such as AllMed’s PeerScore OPPE complement existing performance data collection and internal peer review processes by providing consistent scored analyses of a valid sampling of all practitioners’ work at regularly scheduled intervals.

Hospitals can specify event-based cases (e.g., all emergency room deaths) as a result of a known institutional area of concern about clinical quality or risk, as well as depend on reporting from staff, to identify groups of cases for screening. Rather than wait for a legal action, a record request, or a patient complaint to initiate the process of risk identification, most hospitals require staff to notify the risk management or legal department whenever an untoward or unusual incident occurs. This process is often referred to as occurrence reporting.

Unfocused peer review of randomly selected medical records can also lead to a consensus on the identification of problem areas.
Risk Prioritization
Risk prioritization is important not only in assessing the proper response to a recognized risk case, but also in allocating resources for risk prevention.
For hospitals, mandatory reporting is typically required in the event of the following injuries to a patient: death, brain damage, neurological deficit, nerve damage or paralysis, loss of limb, or failure to diagnose a condition that results in continuous course of treatment. In addition, a catchall provision is often included that requires reporting of any claim or medical incident that has a value equivalent to a certain percentage (e.g., 50 percent) of the self-insured retention limits.

A more detailed list of key specific risks may be compiled based on a hospital’s individual experience. A typical list might include the following major headings: medication error, blood-related, surgery-related, anesthesia-related, food-related, patient-induced, policy-related, radiology-related, medical record-related, laboratory-related, intravenous-line related, newborn-related, maternal-related, and physician-related.

Risk control
Risk control is the process of managing a recognized risk case to minimize the potential for loss. Hospital administrators often devote more time to risk control, rather than risk prevention, due to the fact that lawsuits represent actual losses. However, uncertainties associated with healthcare reform and increased pressure to cut costs are forcing hospitals to adopt more aggressive risk management methods focused on the reduction of medical errors by improving physician performance.

Conclusions
Ongoing external peer review facilitates regular assessment of high-risk specialties, allowing risk avoidance through prevention. Rather than taking a reactive approach and reviewing only sentinel events, external peer review focuses on promoting a proactive culture of investing in loss prevention.

From a qualitative standpoint, ongoing external peer review as a risk reduction strategy reduces medical errors, adverse events, and malpractice costs over time; improves physician performance; provides consistent, objective feedback; identifies process improvement opportunities; ensures transparency and accountability; and promotes a culture of continual improvement.


Founded in 1995, AllMed is a URAC-accredited independent review organization providing external peer review services to leading hospital groups, ASCs, and specialty medical facilities nationwide.  More than 400 licensed and board-certified physicians in active practice conduct AllMed’s evidence-based medical reviews. To more about AllMed, visit: www.allmedmd.com.



Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.

 

Featured Whitepapers

Featured Webinars