Risk and the Quality Business

2. Risk and the Quality Business Dr Peter Kirker Manager Health Risks Victorian Managed Insurance Authority

3. Victorian Managed Insurance Authority • Established under Act in 1996 • Covers the public hospital system for medical malpractice • Costs community approximately $50m per year to manage • Covers all of government risk • Charged with identifying and insuring the State of Victoria’s assets (asset register)

4. The Rule of 72 5% rise in numbers per annum 7% rise in costs p.a.

5. Claims process • 90 000 APEs reported annually • 10 000 require further action (more information) • 4 500 filed (no further action) • 5 000 – 6 000 claims notification files • 1 500 claims files established and managed

6. APEs in Australia • Quality in Australian Healthcare Study (QAHCS), MJA, 6 Nov 95. Wilson et al • Reviewed >14 000 admissions (NSW & SA) • 16.6% associated with adverse event resulting in disability / longer hospital stay (Harvard study only 4%) • 51% of these considered preventable • 13.7% had permanent disability • 4.9% patient death

7. QAHCS Study - APEs in Australia

8. QAHCS revisited • Causes of adverse events:- • Technical performance failure / complication (34.6%) • Information mismanagement (15.8%) • Follow up / follow on failure (11.8%) • Sub optimal care and attention (10.9%) • Medical Journal of Australia • 1999, 170

9. Tackling medical errors • Active failure – active mistakes with people directly involved in patient care (wrong syringe; memory lapse) • Latent failure – caused by people not directly involved with patient care (heavy workloads, inadequate experience or supervision, inadequate maintenance etc)

10. Adverse Outcomes Leading to Litigation The Victorian Experience

11. Statewide Data 1993-2001

12. St Elsewhere’s – Anaesthesia $265k

13. Orthopaedics -$800k

14. Emergency Medicine - $1.8m

15. General Surgery – 1.22m

16. Obs and Gynae - $940k

17. Psychiatry - $180k

18. Neurosurgery - $750k

19. Present directions • DHS initiatives • ( LAOS and Sentinel Event reporting) • Incident & complaint monitoring and tracking • Infection control • Credentialing of medical staff • Documentation and medical records • Medical staff education

20. VMIA STRATEGY • Risk Management Focus • AS4360 Risk Management Standard • Risk Identification • Risk Evaluation • Risk Treatment • Monitor & Review

21. HOW TO MAKE IT HAPPEN • Create a Risk Management culture endorsed by CEO, Board and driven from top down. • Identify a Risk Management “Champion” • Establish Risk Management Committee • Monitor and review Risk Management Program • Risk is everyone’s responsibility

22. ASSISTANCE FROM VMIA • Assist clients with the following: • Establish RM Committees • Develop a Risk Profile • Risk Management Performance Assessment Tool (RIMPAT) • Incident monitoring tool – uniformity - RiskMan • Implement Incident Reporting Systems • Site Risk Surveys • Sponsoring of pilot CRM projects

23. BENEFICIAL OUTCOMES • Assists Corporate Governance • Reduction of exposures to loss • Compliance with relevant legislation • Undesirable risks identified and Managed • Ultimate reduction in Premium costs • Reduced adverse patient incidents

24. BASE PREMIUM – FUNDED BY DHS • Base includes loadings for high risk practices: • Obstetrics • Emergency

25. BONUS & PENALTY • Base Premium adjusted for good/poor claims performance; • 3 years actuarially developed claims X 100 3 years premium cost 1 • Claims capped – Protects “Lightning Strikes” • Loss Ratio determines extent of Bonus or Penalty

26. Annual Premium Band for the Current Year of the Insured Agency Loss Ratio Bands 0 – $25,000 $25,001 - $100,000 $100,001 - $200,000 $200,001 + 0 – 65% (25.0%) to (1.7%) (17.5%) to (1.2%) (12.5%) to (0.8%) (10.0%) to – (0.7%) 65 – 85% 0.0% 0.0% 0.0% 0.0% 85% + +3.3% to + 50.0% + 1.7% to + 25.0% 1.0% to + 15.0% +0.7% to + 10.0% CLAIMS PERFORMANCE POOL – CLAIMS RATIOS

27. Dr Peter Kirker Dr Jack Bergman Managers of Health Risks Victorian Managed Insurance Authority Ph. 03 8601-5900 Email: p.kirker@vmia.vic. gov.au