AllMed Introduces New ROI Model for External Peer Review

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Showing how hospitals and ACSs can implement ongoing physician performance reviews to reduce medical errors that contribute to ever increasing malpractice claims.

AllMed Healthcare Management

"Everyone wants better quality and safety, but until now hospital risk managers haven’t seen what they believe are cost-effective external peer review solutions."

AllMed Healthcare Management, an independent review organization, has taken the lead in demonstrating how hospitals can now affordably and effectively achieve their risk management goals. In a recent webinar for risk managers nationwide, AllMed presented a groundbreaking model for external peer review, an approach that can lower malpractice liability claims – among hospitals largest cost areas – and enable a reduction in loss accruals over time. The model also is presented in-depth, in AllMed’s white paper, entitled, Building a Proactive External Peer Review Program and Estimating ROI: How to Get Started. The white paper outlines an extensively researched process for quantitatively determining the financial payback of an ongoing external peer review program.

According to AllMed CEO, Andrew G. Rowe, peer review has historically been handled internally by hospitals and external peer review investments have been difficult to justify and fund. “Everyone wants better quality and safety, but until now hospital risk managers haven’t seen what they believe are cost-effective external peer review solutions.”

In the webinar presentation, AllMed showed a convincing ROI model that is scientifically based, uses quantitative information that is easy to obtain and automatically calculates estimated liability costs. “The model makes it apparent that ongoing external peer review can reduce medical errors by physicians, reducing liability and thus lowering one of the largest areas of cost a hospital typically bears.”

AllMed’s ROI model is based ASHRM and Aon data from surveys of 119 hospital systems and more than 1,800 facilities nationwide. It calculates the average benchmark loss cost per occupied bed equivalent, taking into account utilization statistics (e.g., ED visits) risk factors for each specialty, and adjustments for geographic differentials and differing levels of coverage and reinsurance.

In the case of one customer – a 300-bed hospital in the Midwest – AllMed applied the model to a single surgical specialty – cardiothoracic surgery – and showed that malpractice claims could be reduced by 7.4%, leading to $120,000 in net savings to the hospital. “And because we were able to perform the review on a systematic basis – at a cost of just over $60,000, the hospital realized a payback ratio of 2.64. When this approach is applied across multiple specialties, the liability savings increase in magnitude and costs to review will be seen as not only manageable but compelling,” Rowe said.

AllMed delivers external review through its PeerScore OPEE© services, which offer hospitals and ambulatory surgery centers (ASCs) a convenient way to implement unbiased, consistent and repeatable processes for both ongoing and focused evaluations. By deploying PeerScore OPPE© (Ongoing Professional Performance Evaluation), hospitals and ASC groups can monitor and receive summary evaluations of each physician’s performance using PeerScore’s coded scoring system. Further, AllMed employs a panel of over 400 physicians – in practically every medical specialty – who can provide external review of physician procedures and cases, give feedback to providers and identify improvement opportunities.

“With this combination of technology and extensive medical knowledge, we are uniquely positioned to help hospitals and ASCs get to best in class status when it comes to proactive, ongoing physician performance review, quality of care and patient safety. As our ROI model shows, the reduction or avoidance of malpractice claims and liability costs offers a significant financial payback, which allows for a significant reduction in loss accruals,” Rowe said.

About AllMed Healthcare Management
Founded in 1995, AllMed is a URAC-accredited independent review organization (IRO) serving leading hospital groups, ASCs, insurance payers, and medical management firms, nationwide. More than 400 licensed and board-certified physicians in active practice conduct AllMed’s evidence-based peer reviews. The company’s PeerScore products meet or exceed The Joint Commission standards for OPPE and FPPE evaluations. More information about AllMed can be found on the company’s Web site at http://www.allmedmd.com.

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Brent Moszer
AllMed Healthcare Management, Inc.
503-445-6614
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Bill Trainer
The Public Relations Project, Inc.
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