Can hospitals offer too much in apology programs?

Study: Consider separating disclosure discussions from compensation talks
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When hospitals fess up to mistakes, patients are more skeptical if they offer generous sums of money, according to a new study in Health Affairs.

Under burgeoning disclosure-and-resolution programs, hospitals reveal an adverse event, apologize, and when appropriate, offer compensation. Previous research has found that such apology programs can reduce liability costs.

Researchers of the Health Affairs study found that two-thirds of patients said they wanted compensation. Study authors examined different compensation models: (1) no compensation, (2) waiving medical expenses, (3) a limited reimbursement of out-of-pocket expenses up to $25,000 and "loss of time" up to $5,000, and (4) full compensation in which hospitals paid for economic losses and pain and suffering, similar to awards in a malpractice suit.

Surprisingly, they found that offering more money doesn't mean patients are less likely to seek legal advice.

In fact, when hospitals offered full compensation packages to patients who had adverse events, the patients viewed generous offers as a means to avoid litigation on the providers' part.

"Our findings suggest that patients would welcome the routine inclusion of compensation offers in the disclosure process but that patients' responses to compensation offers are more complex than might be assumed," the study states. "More generous offers do not necessarily confer advantages in deterring patients from seeking legal advice or in maintaining trust and strong therapeutic relationships, relative to offers to waive medical bills, offers to reimburse out-of-pocket expenses, or no offers."

Researchers suggested providers separate disclosure conversations and compensation offers so that patients don't assume they are "merely strategic behaviors" to avoid a lawsuit and instead their motivations are ethical in nature. In addition, researchers recommended excluding physicians from compensation discussions.

The vast majority (95.5 percent) of plaintiffs' claims never even reach a jury, with the court dismissing cases 54.1 percent of the time across specialties, according to a May study in the Archives of Internal Medicine.

Although exact, total costs of defensive medicine in the United States remains difficult to estimate, providers report that malpractice lawsuits can hurt reputations and have significant costs in litigation and time.

When malpractice claims result in an indemnity payment, the mean defense costs are $45,070, and when there is no resulting payment, the mean defense costs are $17,130, according to a letter to the editor published in April in The New England Journal of Medicine.

For more information:
- see the study abstract

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