Overview

As we have covered in the previous two blogs, the management of patient safety and clinical risk is undergoing a tectonic shift. This is the third of the following three blogs:

  1. Mindset Shift (January blog) – changing how we think about patient safety and risk management
  2. Model Comparison (February blog) – understanding the differences between the traditional model and the next-generation risk model
  3. Mathematic Value (this blog) – calculating the value of integrated patient safety and risk.

Overview: From Medicine to Math

The business case in patient safety is supported empirically with peer-reviewed, published, and real-world evidence from a range of health systems.

However, it relies on clinical leaders diving into academic waters to understand the evidence, pressure-testing assumptions, and ultimately embracing a new methodology. These conversations, led by physicians engaging physicians, are novel and satisfying but do take time.

The business case in risk management is just math. The beauty of extending the ROI model to risk is that, as Pascal says, we move from “medicine to math.”

Together, they’re better: evidence-based medicine anchoring the clinical and financial case in patient safety, augmented and significantly expanded with an ROI model in risk that is simply math – understandable and compelling for even non-clinical executives and board members.

What are the Business Cases?

Patient Safety: Foundational Medicine

Let’s take patient safety first. The business case in patient safety is foundationally anchored in the identification and reduction of excessive length of stay (XLOS) linked to adverse events, or patient harm.

The literature has progressively shown that there is a substantial amount of XLOS associated with patient harm. Adler et al. in 2015 showed about 2.6 days of XLOS being associated with harm; the CommonSpirit Health data presented at the 2022 AcademyHealth Conference on Implementation and Dissemination in Healthcare showed approximately 3.1 days of XLOS.

Then, the landmark 11-Harvard hospital Bates et al. study showed 5.1 days of XLOS in 2023. As the accompanying editorial by Dr. Don Berwick said, “The harder you look, the more you find.” The more triggers that are used, the more patient harm we find.

By identifying and reducing patient harm, we reduce XLOS – a common target across the United States for CFOs – driving real, measurable financial value. This technology-enabled methodology reduces XLOS-related harm, resulting in at least 3x-5x ROI per year.

Risk Management: Simply Math

Now, let’s take a look at the business case for next-generation risk management. This new approach relies on real-time EHR-based adverse event outcomes instead of “See something, Say something” event reporting. The ROI value flows from three sources of value:

  1. Improved Documentation Integrity: Pascal has invented a new concept and capability in risk, termed Risk Documentation Integrity™ (RDI). RDI enables a care delivery team to ensure that a patient record is completely documented with what care has been delivered, including those aspects concerning risk.
  2. Reduced Legal Expenses: Pascal client data has found that legal expenses increase by over 80% if litigation lasts longer than two years. When a potentially compensable event (PCE) is identified and properly characterized quickly, a risk management group can determine more precisely what legal expenses can be incurred and not follow generalized policies and procedures, the full cost of which may not be relevant to that PCE.
  3. Reduced Indemnity Payouts: Serious harm suffered by patients results in medical malpractice litigation. Pascal clients find 10x the level of serious harm and reduce over 25% of all-cause harm. Therefore, while a multi-year longitudinal study will be required to validate the reduction of indemnity payouts, the data promises that this new risk management method will reduce indemnity payouts.

Conclusion

The entire clinical risk management and medical professional liability insurance industry revolves around the axial principle of early identification.

Not only does this new technology-enabled methodology identify risk while the patient is still receiving care, but hospitals are already demonstrating the capability of taking action within hours.

The benefits are superior patient experience and the reduction of medical malpractice costs.

What has quickly become apparent is that the measurement and management of safety and risk will become integrated. Past executional models separated patient safety and risk management as functions. Yes, the two functions will always retain their particular objectives.

However, now safety and risk will share a common outcomes data stream, enjoy an overlapping workflow while the patient receives care, and coordinate far more in intervention, improvement, and advanced analytics.