That efforts to understand and minimize mistakes could, in turn, affect malpractice claims occurred to Steve Kraman, chief of staff at the Lexington Veterans Affairs Medical Center in Kentucky, after two negligence lawsuits cost the hospital more than $1.5 million. Kraman began investigating adverse outcomes while patients were still in the hospital: “It was just self-interest,” he says. “The hospital attorney and I wanted to do our own discovery before a lawsuit was filed so we could better defend ourselves.”

Then an ethical dilemma arose. Members of the estranged family of a patient who had died as a result of what Kraman terms a “black and white” drug error asked no questions when they claimed her body. Should Kraman tell them the hospital’s mistake had killed her? He did, and promptly wrote a check to the family for $225,000, far less than he would have expected the VA to pay for a wrongful death. Thus began, in 1987, the Lexington VA’s mandatory protocol of immediately determining the cause of every adverse event, disclosing when the standard of medical care had been breached, and negotiating with patients and their attorneys a settlement for economic losses and pain and suffering.

Although the policy would seem to encourage claims, total payouts turned out to be much less than other VA hospitals spent. From 1990 through 1996, the Lexington VA had 88 malpractice claims and paid an average of $15,622 per claim that resulted either in a court judgment or an out-of-court settlement. In the VA system as a whole during that period, the average malpractice court judgment was $720,000, and claims settled out of court paid an average of $205,000.
“We settled almost every case at the hospital, and patients were usually willing to negotiate on the basis of real financial losses rather than out of a desire for revenge,” says Kraman, now professor of medicine at the University of Kentucky. Despite the huge difference in costs, Kraman says it’s impossible to say how much was attributable to Lexington’s policy of admitting mistakes and how much was mere luck.

Kraman and the risk-management staff also bucked tradition by having the hospital’s patient-safety and risk-management committees, ordinarily separate entities, operate as one to help identify problems that contributed to medical errors. “Kentucky has an open-records act that provides public access, so hospitals are very careful what they put on paper,” says Kraman. “They don’t want reporters singling them out as a place in which errors occur. But we were less worried about who knew about our errors than we were about moving quickly to fix them. My feeling was that our responsiveness to adverse outcomes reflected well on us.”

Kraman himself told patients that they had received substandard care, because he felt having the news delivered by the chief of staff conveyed how seriously the hospital took these matters, and it enabled him to know exactly what was said. Although they didn’t admit their errors directly to patients, many physicians involved seemed to welcome this openness.

“Medical malpractice tends to treat doctors and hospitals as if they were criminals by requiring them to remain silent until proven guilty,” says Kraman. “But these are people with high-pressure jobs who sometimes make honest mistakes. Some develop symptoms of post-traumatic stress afterward, and the worst thing is to tell them to shut up, hunker down and maybe it will all go away. It doesn’t go away until you try to make it right and prevent it from happening to someone else.”