Risk mitigation is the process of embracing actions that increase opportunities for your practice, while reducing potential threats. To mitigate, you first need to become aware of risks that pose a threat, then evaluate their potential for harm, and then put policies and procedures in place to reduce the potential for risk. Here are tools to help practitioners mitigate risk during their professional veterinary careers, whether as an owner or associate.
A common way of mitigating risk is purchasing insurance, including malpractice insurance. The importance of this coverage has increasingly moved to the forefront because, as Veterinary Practice News points out, malpractice law has significantly changed in the past 50 years. Pets were originally considered property. Because of Houseman v. Dare, pets were upgraded to “specialized category of property with subjective value, akin to ‘heirlooms, family treasures, and works of art, or family heirlooms.’”
Brousseau v. Rosenthal took the concept even further, legally classifying pets as companions and protectors. And, because of this evolution, courts began awarding larger sums of money when ruling that malpractice occurred, starting in the 1980s – and even larger amounts in the 1990s. Claims have become more common, too, making malpractice case defense increasingly more expensive for veterinarians.
Veterinary businesses as well as individual veterinarians, including those employed by practices, therefore need this type of insurance. Malpractice laws vary by state, so be sure to purchase your insurance from an agent well versed in your state’s laws. Meanwhile, DVM360 notes that it’s “very important to remember” that typical malpractice insurance does not usually cover the costs if you need to defend your professional license at the license board. Their advice? “Run, don’t walk, to the telephone and call for a license defense rider on your veterinary malpractice policy.”
General liability insurance is also crucial. Also known as commercial general business liability insurance, this covers costs when someone gets hurt on your premises, or you or your practice employees cause an injury or property damage, the latter perhaps by fire. A Small Business Administration article points out that this insurance also covers legal defense fees, and settlements if you are sued for those reasons and lose. These include “compensatory damages, nonmonetary losses suffered by the injured party, and punitive damages.” This insurance also protects you if you’re accused of libel, slander and/or copyright infringement.
It’s important to check the maximum amounts listed on your policy, as you are responsible for amounts paid out after that. If you don’t believe that the maximums are enough, investigate excess insurance or umbrella insurance to increase coverage.
Investigate employment practices liability insurance (EPLI), as well. This protects your practice if certain employee claims are made. It’s important, though, to be clear about what is and isn’t covered. It’s typical for employment discrimination claims, retaliation and harassment claims and defamation, privacy invasion and negligent supervision claims to be covered, along with wrongful discharge and failure to hire or promote claims. This insurance usually does not cover claims related to the Fair Labor Standards Act, ERISA/employee benefits, COBRA or OSHA, among other possibilities. Claims that fall under statutes that are not typically covered by ELPI are becoming increasingly common, so be clear about what you’re purchasing and what it does and doesn’t cover.
Finally, there is workers comp insurance. This protects you against lawsuits when workplace accidents take place, and covers medical costs and other compensation to employees thus affected. In most states, this insurance is required, and it is a separate policy.
Human Resource Tools
Creating well-written job descriptions, employee manuals and performance management programs help to mitigate risk at your practice.
Job descriptions should focus on requirements needed for your practice now and in the future. These are important tools for recruitment; to help an employee prioritize job tasks; and for management to hold an employee accountable for his or her responsibilities. Be sure to include competencies needed for a particular job and how that role fits into the practice’s overall strategy. Not doing so puts your practice at risk, because if you don’t have well written job descriptions, your ability to defend your practice against complaints are diminished, including those about pay, performance, promotion and discrimination.
Employment manuals are ideal places to spell out a comprehensive Equal Employment Opportunity (EEO) policy that shares how you will not tolerate harassment or discrimination, as just one example; this is important to protect your employees as well as a proactive defense should an employee complain. Manuals should cover more than EEO issues, however; be sure to include any policy that’s needed to comply with federal and state laws. Courts are increasingly acknowledging disclaimers in employee handbooks when ruling on cases related to employee discipline and/or discharge, so be very clear about the specifics for your practice.
If you create a performance management program (PMP) at your practice, you can include specifics in your employee manual. This allows you to effectively manage employees who are not meeting strategic and/or operating performance goals, and provides a layer of protection in case of employee complaint.
Policies and procedures should never be on the “set it up and then forget about it” plan. Important systems need audited. Audits should take place in the following areas, among others:
- Human resource policies
- Medical protocol/standard of care
The term “audit” is closely associated with financial reviews, and with good reason. It’s very important to ensure that your financial records are pristine, following all tax laws and requirements, and to make sure that proper checks and balances are in place. There are internal and external audits. Internal audits should take place frequently, with regular external audits also taking place, with the external auditor providing an objective statement on the accuracy of financial statements of the practice. These audits can be used by tax authorities who need verification of tax return accuracy; financial institutions who are lending money to the practice; and practice management who are assessing risk factors and modifying policies and procedures for improved fiscal responsibility.
Ethical audits, meanwhile, take your practice beyond what it legally right into what is morally right. From a risk management perspective, one lapse in judgement by a member of the practice can have devastating effects. Consider creating a formal written code of ethics, distributing it to employees, where you share your zero tolerance of ethical infractions. Regularly review this code, updating when necessary, and strictly enforce the code. Provide ethics trainings to all practice employees, hourly and management alike – and encourage ethical behavior, even when it comes in the form of an employee questioning the ethics of a policy or behavior.
Human resource audits should be regularly conducted to keep up with the ever-changing federal, state and local statutes. When practices fail to comply with one of these – even inadvertently – and an employee files a complaint, this can result in significant financial consequences, and even criminal penalties. Note that it’s not uncommon for state laws to create employee rights that differ from the federal laws from which they were devised. Plus, policies and procedures that made perfect sense last year might cause you to be out of compliance today, and a human resources audit with a compliance specialist will help to identify potential areas of trouble. Even if something is missed, or changes after the audit, courts tend to respond more favorably to practices that can show good faith efforts to comply.
One of the best ways to reduce potential liability of your practice is through keeping complete documentation, both of medical information of your patients and your communications with clients. Veterinary state board sanctions are largely due to a practice failing to keep complete and accurate records. And, while there are many benefits to paperless records, know that computerized records may not be as helpful as written ones in, say, a malpractice suit defense because they can be tampered with too easily. To protect yourself, ensure that you have excellent record-keeping procedures; follow them precisely; and conduct audits of them to improve processes and further protect yourself.
Finally, don’t forget about clinical protocol audits. This quality improvement audit focuses on standards of care and how they can be improved. As the US National Library of Medicine points out, this has become standard by some national governing bodies in human medicine, and this has led to measurable improvements in care. Conversely, the absence of this evaluation has led to more failures of appropriate levels of care. As of yet, these audits are not required by national veterinary governing bodies, but their implementation is a key element of reducing practice risk.
When establishing standards of care, the baseline level is that a veterinarian must perform duties with the amount of skill, care and diligence that colleagues would practice in similar situations. Although this is admittedly vague, it is good practice to consult with practice staff, colleagues and insurance carriers to remain aware of the latest preventative care measures used by other veterinarians.
It’s crucial that your practice knows and abides by the latest in drug-related laws. The baseline rule is that licensed veterinarians can only legally use or dispense a veterinary prescription drug when a valid veterinary-client-patient relationship exists. Many states also have laws that require sufficiency of records to substantiate the relationship. With the growth of telemedicine, of course, increasing numbers of gray areas are surfacing about the definition of a relationship. If you compound medications, ensure that you are following all laws.
Dealing with Another Doctor’s Diagnosis
When someone brings an animal to your veterinary practice, unhappy about the diagnosis and/or treatment provided by another veterinarian, this can raise multiple ethical issues. To handle the situation appropriately, ensure that a thorough exam is conducted and take care that you do not criticize the other professional simply because he or she came up with a different conclusion that you did – or even that the diagnosis was ultimately incorrect – if this professional appeared to meet reasonable standards of care. Conversely, if you determine that substandard care was in fact given, check with your state’s practice acts and codes of conduct. Some require you to report this breach in care.
You can never completely risk-proof a veterinary practice. There are, however, numerous actions that you can take to greatly reduce risk and this article is a high-level look at some of the most important. Explore these topics in more depth, especially the ones where your practice appears to be lacking in depth of policies and procedures.