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"Enterprise liability" is a legal concept that some advocates say can help health care organizations achieve patient safety, but it could represent another reason for risk managers to worry, says Fay A. Rozovsky, JD, MPH, DFASHRM, DSA, senior vice president of Marsh, a consulting firm in Richmond, VA. Rozovsky addressed risk managers’ concerns about enterprise liability at the recent meeting of the American Society for Healthcare Risk Management in Nashville, TN. She explained that the concept calls for liability for errors and omissions to shift from the individual clinician to the health care organization.
Enterprise liability was suggested as a solution to medical errors in To Err is Human, the landmark report released by the Institute of Medicine in 1999, because it can encourage individuals to report errors if they are not afraid of being held personally responsible. "But enterprise liability is fraught with risk management concerns," Rozovsky says. "Rather than enhancing patient safety, enterprise liability may serve to exacerbate underlying issues that give rise to questions about quality, safe patient care."
Emergency department a risky area
A focus on enterprise liability could result in hospitals being held responsible for the actions of physician groups or other entities that are legally separate, she says. Liability is most likely to occur in emergency departments or other departments in which the patient cannot easily make the distinction, Rozovsky says. Notifying the patient of such distinctions with signage and consent forms may be ineffective and provide a false sense of security, she adds.
Exposure also is possible when state licensure laws and regulations delineate specific, nondelegable responsibilities to a health care organization, Rozovsky says. Hospital leaders may assume there is no liability risk because the responsibility was delegated, but the law may prohibit such delegation. She suggests looking for these warning signs that your organization could be exposed to enterprise liability exposure:
Check state laws for nondelegable duties