Summary

Pursuant to a congressional request, GAO examined: (1) how hospital risk management activities have evolved in response to substantial increase in medical malpractice actions; and (2) 10 states' regulations requiring hospitals to implement risk management programs.

GAO found that: (1) the Joint Commission on Accreditation of Healthcare Organizations established new standards for accreditation dealing with risk management that reinforced the importance of coordinating risk management and quality assurance activities; (2) although about 70 percent of the nation's hospitals participated in the accreditation process, hospitals that were not actively involved in risk management could have problems meeting the requirements; (3) between 1976 and 1988, at least 10 states enacted legislation requiring hospitals to implement risk management programs; (4) although state laws varied widely in their levels of detail, types of activities, and enforcement requirements, most states established their program requirements in response to malpractice insurance problems and as a condition for hospital licenses; (5) four insurance companies that provided liability insurance to about one-third of the nation's hospitals strongly encouraged insured hospitals to implement risk management programs to reduce financial liability, but did not base policy premiums on the type of risk management programs hospitals operated; and (6) studies of risk management programs have provided evidence showing that some hospitals with certain risk management processes have had better claims experiences than those without those processes.