Risk management: how doctors, hospitals and MDOs can limit the costs of malpractice litigation

The concerns of doctors regarding their risk of malpractice litigation and the costs of indemnity premiums are resulting in calls for legal reforms to limit their liability. We do not believe these returns will be successful either practically or politically. Medical defence organisations often attempt to vindicate the doctor rather than settle the dispute — a strategy that might be morally satisfying to doctors but which is also more expensive than the approach taken by commercial insurers. Risk management — the activities required to minimise financial loss for hospitals and the doctors who work in them — is disorganised or absent in most hospitals. Hospital managers lack incentives for risk management because the costs of litigation do not come out of their budgets. The five mainstays of effective risk management are credentialling of medical staff, incident monitoring and tracking, complaints monitoring and tracking, infection control, and documentation in the medical record. The implementation of risk management activities in hospitals is the immediate responsibility of hospital management, not doctors.