Hospital bill-collecting and med-mal claims

by Walter Olson on June 2, 2008

The recent flurry of press attention to medical apology prompted this anecdotal recollection from Michael O’Hare at Same Facts (May 18) of his work 25 years ago on a Massachusetts state commission to address the malpractice issue:

The story was that soon after [in-house hospital lawyer] Fred arrived, he was assigned to get on top of malpractice claims, and he sat down with six months’ worth of files. All of them, he discovered, began with a collection action for non-payment of a bill. So he ordered the accounting office to send him every overdue account before any efforts at collection, and invited the deadbeat patient into his office for a conversation. Invariably, the patient was withholding payment because he thought he had been mistreated. Often, the patient was right. The next meeting was with the practitioner accused of having screwed up, and the outcome was sometimes an apology and a promise to fix the problem for free (for example, another operation at no charge to retrieve the forgotten sponge), sometimes an expression of regret for a bad outcome with an explanation that the hospital hadn’t actually erred: not everything in medicine works every time. Of course this required that Sanders and Fred drive out fear, so the staffers could be honest and sympathetic.

The result of this was a really spectacular reduction in malpractice costs, even counting in the “warranty service” repairs; I don’t remember the numbers but it was on the order of more than half, partly in fees to defense lawyers, partly in claim payments. Frequently the bill even got paid. The reduction in lawsuits occurred both when the hospital was wrong and said so, and when it was right and said so; it turned out a lot of the injured patients just wanted to tell a live person what had happened to them and get an apology. Of course the public relations benefits are enormous, if hard to measure. And quality always goes up when your own people aren’t afraid to talk to each other about instructive mistakes.

It’s notable that Fred’s pay didn’t depend on how many cases he litigated….

Full post here. More thoughts on medical apology: Melissa Clouthier, May 19.

{ 3 comments }

1 Commentor 06.02.08 at 6:02 pm

This comports with research showing that the best statistical indicator of whether a doctor will be sued is his bedside manner rather than his actual skill as a physician.

2 Mr L 06.02.08 at 6:48 pm

Of course, the subtext of all this is that most lawsuits are apparently being filed because of someone’s ego and hurt fewwings instead of actual legitimate harm.

3 Tribal Elder 06.03.08 at 7:37 am

There’s nothing like a voicemail collection message to a deceased spouse (10 days deceased) about a $1000.00 deductible to set somebody off-especially when the bill was mailed day 3 post AND paid online on day 8.

I got that call.

Comments on this entry are closed.