EMRs may increase liability claims in short term

A practical look at information technology issues and usage

By — Posted Jan. 3, 2011.

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Medical liability insurers once said electronic medical records would let physicians earn discounts on their premiums, because the potential benefits of the technology included improving patient safety.

But those discounts haven't materialized. The reason, a study says, is that liability insurers are betting that claims will rise during a so-called adjustment period, when practices new to the technology are working out the kinks in their systems.

Conning Research and Consulting published a study looking at medical liability and factors that could influence the industry, including the adoption of electronic medical records. It found that EMRs have the potential to reduce the number of liability claims in the long term.

In the short term, "as systems are tested, errors with coding data input and software-interoperability failures may occur," the study authors wrote. Because patient data will be easier than ever for attorneys to obtain, the study said claims frequency probably will increase, and the costs of claims defense is expected to rise.

These potential pitfalls associated with EMR adoption are a break from many studies that have shown the potential benefits to EMRs -- benefits that, at one time, had some carriers considering offering discounts to physicians who use EMRs.

Professional Risk Associates, a medical liability insurance agent in Midlothian, Va., that represents several carriers, co-sponsored a survey in 2007 that appeared to make the case for insurers to offer discounts to physicians who use EMRs. But Jennifer Jones, marketing manager for the agent, said despite this evidence, none of its carriers decided to offer the discount, choosing instead to wait and see.

Since then, she said, the carriers have backed away from the idea, saying they believe EMR use could increase liability risks because of the adjustment period.

The recent research by Conning, a research firm specializing in the insurance market, found many carriers sharing the skepticism.

Insurance industry analyst Jeffrey Thompson, a vice president with Conning, said physicians and their staffs are more open to errors during the implementation period as they learn the system and adjust to a new way of doing things.

Steep learning curve

Economically challenged medical facilities that are facing a physician shortage and have overworked doctors and nurses -- mostly in underserved, rural areas -- will have an especially tough time, because many lack the information technology talent and the time to get the proper training, Thompson said. Because of this, long-term success with EMR adoption might be regionally based, he added.

David Troxel, MD, medical director for The Doctors Company, a physician-owned liability carrier in Napa, Calif., agrees that EMR use, at least initially, may have unintended consequences that increase the risk of claims.

He wrote an article for the company's publication, The Doctor's Advocate, in 2010 in which he detailed possible risks for physicians. Among them: alert fatigue (ignoring the constant and not necessarily urgent alerts and warnings that a system might give); failure to take action on information that could be dangerous to the patient, such as drug interactions; auto-populated fields generating false information; and cutting and pasting information from one clinical note to another.

However, there is widespread agreement that once the kinks are worked out, EMRs could help reduce the number of liability cases as the risk of harmful errors decreases. They have the potential to help improve clinical decisions as well as physician-to-physician and physician-to-patient communication. Experts also believe EMRs could improve physicians' ability to defend themselves against liability claims, because better documentation of appropriate care will be possible.

Thompson said practices must be open to insurance carriers doing audits that will expose the risks. The audits, he said, would work well for both carriers and physicians. He said carriers eventually might offer discounts to practices that conduct -- and pass -- regular risk audits.

Even if the number of claims increase in the meantime, Thompson doesn't expect that to affect premium rates.

A recent survey of insurers found that most companies are running with a combined ratio (claims versus expense ratios used by insurers to measure profitability) of about 85%, while most other insurance sectors are operating with a combined ratio of more than 100%.

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Liability risks associated with EMR use

A New England Journal of Medicine article looked at the potential liability risks of electronic medical record use and shows that although the adjustment period comes with risk, as EMR use becomes more prevalent, failure to use an EMR eventually could become a liability risk.

During initial implementation

  • Transition from paper to electronic may create documentation gaps.
  • Failure to implement procedures that a prudent or reasonable provider would implement to avoid errors may leave physicians legally vulnerable.
  • Inadequate training on systems may create error pathways.
  • Errors by a new system may create incorrect or missing data entries.
  • Failure of clinicians to use system consistently may lead to gaps in documentation and communication.
  • Systemwide EMR "bugs" and failures could affect clinical care adversely, leading to injuries and claims.

As systems mature in place

  • E-mail advice multiplies the number of clinical encounters that could give rise to claims and may heighten the risk of claims if advice is offered without thorough investigation and examination of the patient.
  • More extensive documentation of clinical decisions and activity creates more discoverable evidence for plaintiffs, including metadata.
  • Temptation to copy and paste patient histories instead of taking new histories risks missing new information and perpetuates previous mistakes.
  • Failure to reply to patient e-mails in a timely fashion could constitute negligence and raise patient ire.
  • Information overload could cause clinicians to miss important pieces of information.
  • Departures from clinical-decision support care guidelines could bolster plaintiffs' case.

As EMRs and health information exchanges become widespread

  • Better access to clinical information through EMRs could create legal duties to act on the information
  • Widespread use of clinical-decision support may solidify standards of care that otherwise might be subject to debate.
  • Rise of HIEs may heighten clinicians' duties to search for patient information generated by other clinicians.
  • Failure to adopt and use electronic technologies may constitute a deviation from the standard of care.

Source: "Medical Malpractice Liability in the Age of Electronic Health Records," The New England Journal of Medicine, Nov. 18, 2010 (link)

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Potential liability benefits of EMR use

Although many believe EMR use initially could cause more claims during the so-called adjustment period, EMR use potentially could reduce liability risks for physicians after an adjustment period.

After successful implementation

  • EMR systems may lower discontinuities and errors in care, reducing adverse events and claims.
  • EMR systems with integrated clinical-decision support may improve clinical decisions, reducing adverse events and claims.
  • Better documentation of clinical decisions and activity -- through user-entered data and metadata -- may improve the ability to defend against malpractice claims when care was appropriate.
  • Compliance with clinical-decision support care guidelines may constitute helpful evidence that the legal standard of care was met.
  • Secure messaging may improve patient satisfaction and communication and reduce propensity to sue.
  • Secure messaging could improve patient communication of clinically significant information, reducing adverse events and claims.

As EMRs and health information exchanges become widespread

  • Adherence to clinical-decision support recommendations may protect providers from liability.
  • Rise of HIEs may facilitate sharing of information about cases, leading to better care and fewer claims.

Source: "Medical Malpractice Liability in the Age of Electronic Health Records," The New England Journal of Medicine, Nov. 18, 2010 (link)

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