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Q&A: Jeffrey F. Driver, Stanford University Medical Network Risk Authority L.L.C.


Jeffrey F. Driver is CEO of Stanford University Medical Network Risk Authority L.L.C. in Palo Alto, Calif. Mr. Driver spoke recently with Business Insurance Associate Editor Sheena Harrison about risks his firm, jointly owned by the Stanford Hospital and Clinics and the Lucile Packard Children's Hospital, is helping clients to manage. Edited excerpts follow.

A: The biggest risk for health care organizations is to not effectively identify, mitigate, manage and finance risks from an enterprise perspective. Health care organizations should design enterprise risk management infrastructures utilizing either the ISO 31000 risk management standard or an ERM framework established by the Committee of Sponsoring Organizations of the Treadway Commission, or a combination of the two. An enterprise risk approach will identify for each health care organization its biggest risk. In addition, technology in general is a big risk for health care organizations. Oftentimes, technology advances more rapidly than organizations can handle. Organizations do not have the infrastructure and ability to seamlessly identify the risks in a timely manner or adapt in a timely manner.

A: Workers compensation represents a significant portion of health care organizations' total cost of risk and requires diligent risk mitigation. Typically, we look at the following intensive risk management and claims intervention to reduce the likelihood of adverse loss experience: adoption of an organizationwide general safety program to increase safety awareness and urgency; repetitive motion injury-prevention plans to address issues surrounding computer-related injuries, along with those caused by pushing, pulling, lifting or manipulating objects; implementation of minimal lift programs to address losses caused by patient handling and moving of objects; slip and trip prevention programs; and increased diligence with staff training related to workers compensation.


A: Early signs from Massachusetts suggest there is little effect on frequency or severity of medical malpractice losses, but it is too soon to say because cause and effect may be masked by other market conditions. Risk managers are wise to monitor diagnostic claims, especially delay in diagnosis, which is an evolving exposure as the time to secure a scheduled appointment with providers lengthens under increased consumer demand for access and service. Risk mitigation strategies must include preparation for the increase in patients and patient visits in order to maintain quality of care and patient safety.

A: For the last two to three years, the health care professional liability market has been relatively inexpensive and rates have been stable. New insurers in the market and strong underwriting results based on risk management efforts to curb underlying loss experience are driving this environment. However, California has experienced increasing severity of losses during the last three years. In the past, hospitals were afforded credit by virtue of being in California. As California severity trends solidify, underwriters are unlikely to provide this credit and will likely view California exposures on par with the rest of the nation.