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

3. 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. APE rate Permanent Disability rate Death rate High pre- ventabilit y rate Emergency Medicine 1.5%9%6%82% Internal Medicine 6.5%41%20%73% Cardiology5.1%25%8%58% General surgery 13.8%15%3%53% Anaesthesia2%4%2%38% 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 SpecialtyNumber (n=3474) % by no% by cost Anaesthetics1893.0%1.1% Cardio-thoracic691.4%1.3% ENT901.5%0.3% Emergency5579.0%11.4% Gen Surg.5989.6%7.7% Neurosurgery991.6%1.5% O&G Orthopaedic Ophthalmology Plastic surgery Psychiatry Urology Vascular Surg 1163 445 86 61 206 112 5 18.8% 7.2% 1.39% 1% 3.3% 1.81% 0.08% 42.2% 5.2% 0.73% 0.4% 2.6% 0.98% 0.05%

12. St Elsewhere’s – Anaesthesia $265k ElsewhereSomewhereAware Phys. injury412 Breech of policy1 Damaged teeth511 Other11 Incorrect Δ Cardiac arrest1 Awareness5 Airway related2 IV related1 Lack of care1

13. Orthopaedics -$800k EWSWAW Complication3241 Incorrect Δ4 Breach of policy11 Delayed Δ1 FB left in situ2 Consent4 Procedural issues51 Lack of care1

14. Emergency Medicine - $1.8m EWSWAW Delayed Δ95 Incorrect Δ1812 Lack of care1 Complications31 Suicide1 Complications of Rx1 Medication error1 Incorrect test interpretation 1

15. General Surgery – 1.22m EWSWAW Complications3441 Procedural issue41 Lap. complications631 Consent21 FB left in situ3 Incorrect Δ4 Equipment issue1 Waiting list issue1 Delayed Δ1

16. Obs and Gynae - $940k EWSWAW Postpartum comps3 Comps of delivery6 Failed sterilisation2 General comps1 Delayed Δ731 Un Δ stillbirth1 Un Δ congenital anomalies2 Equip. issue11 Procedural issue1 Consent3

17. Psychiatry - $180k EWSWAW Suicide6 Incorrect Δ2 Absconding4 Lack of care2 Breach of Admin rule/policy7 Medication error3 Delayed Δ1

18. Neurosurgery - $750k EWSWAW Complications10 Delayed Δ2 Incorrect Δ4 Medication error1 Waiting list issues4 Consent1 Suicide1 Procedure1 Equip. issue2

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. CLAIMS PERFORMANCE POOL – CLAIMS RATIOS 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% 85% ++3.3% to + 50.0% + 1.7% to + 25.0% 1.0% to + 15.0%+0.7% to + 10.0%

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