PLICO Chairman: Apologizing for Medical Mistakes Saves Insurers Time, Money

Physicians Liability Insurance Co., the largest medical professional liability writer in Oklahoma, is encouraging its doctors to apologize when something goes wrong with a patient.

Apologizing can save the doctor/patient relationship, reduce medical malpractice claims, and is the right thing emotionally — and financially — for the patient, the doctor, and MPL writers, Dr. Carl Hook, chairman and president of PLICO, told Best's News Service.

After an adverse outcome, "the legal defense teams have historically recommended no communication because of the fear that the physician or health care provider would say something that could be incriminating," Hook said. "They'd recommend that we don't communicate, don't talk to lawyers, don't talk to the family. It's called 'deny and defend.' Shut down and don't say anything."

That leads to the perception that something is being covered up, and patients may feel like they are victims. "It leads to frustration, anger and outright animosity," Hook said. "The doctor/patient relationship is severed, and any relationship between the doctor and the family and friends of the individual involved is severed, and the litigation process is on."

Litigation can take years, and even though 60% to 70% of PLICO's claims are resolved without a payment, every legal case costs money to defend, Hook said. When there is a payout, the injured patient often receives just 35% to 40% of the claim amount, Hook said.

"Attorneys are able to get 50% as a contingent fee for the verdict, they average about 40% off the top. Then they charge for their expenses for depositions and travel and court costs, that can be another 10% to 20%. In this scenario, the plaintiff gets 35% to 40% of the number the jury awarded," Hook said.

Also, it takes on average 5.5 years to resolve a medical professional liability case from the date it is filed, which could be up to two years after the incident that sparked the lawsuit.

"We now have our average [MPL case] down to less than two years," Hook said. "We are looking to take care of the injured, we are interested in patient safety. Saying 'I'm sorry' is also good for our company. We get better care of the patients with less expenditures, lower legal fees and lower court costs. We're a more successful company as a business all because you've done the right thing for the patient and the family."

Claims frequency for PLICO has gone down, and severity is holding steady, Hook said. "I interpret that as we are doing well," he said.

PLICO is training doctors and medical professionals to say they're sorry, and call PLICO right after an incident, instead of waiting two years down the road when a lawsuit has been filed.

"Our first tool is empathy," said Shari Moore, vice president of risk management for PLICO. "We don't want them going in and falling on their sword the first day. Don't go in right after and say, 'I did something wrong.' But the first interaction should be 'I'm sorry this happened. I know it wasn't expected. This is the plan going forward. If you have questions, here is my cell phone number. We're doing an investigation and might not be able to answer questions at this time, but we will.'"

In one successful case, the medical staff apologized to a patient after something went wrong. A PLICO claims representative met with the patient, and a formal lawsuit was never filed. They agreed to settle the claim, and the family got 100% of the settlement.

Doctors may need help to learn how to talk to patients, Hook said. "Sitting down and having a heart-to-heart with someone and admitting you're at fault is hard for many people to do," Hook said.

The training is not mandatory, but about half of the doctors insured by PLICO, which was created by the Oklahoma State Medical Association, have gone through the program, he said.

"Before, and after, 'sorry' works," Hook said.

It's an idea that's even getting attention from Washington.

The health care reform law includes $50 million of federal funding for "demonstration projects" that could explore cost containment alternatives to the current MPL tort litigation system. This could include apology programs (Best's Review, July 2011).

PLICO had $28.8 million in net written premiums for the first nine months of the year, down 6.3% from the same period a year ago, according to BestLink, which provides online access to A.M. Best's database of insurance information. The company had $39.4 million in capital and surplus at the end of the third quarter, according to BestLink.

With a 33.4% market share, Physicians Liability Insurance Co. is the largest writer of medical professional liability in Oklahoma, according to BestLink. Rounding up the top five writers in the state are: Berkshire Hathaway Insurance Group, with a 21.57% market share; ProAssurance Group, with a 9.2% market share; CNA Insurance Cos., with a 8.8% market share; and White Mountains Insurance Group, with a 3.4% market share.

(By Meg Green, senior associate editor, BestWeek: [email protected])