Part One

Shane Graves, the chief pediatric heart surgeon at St. Michael’s Hospital, closed the door of the hospital room he had just left and stopped to gather himself.

In the room behind him lay the dead body of Garret Easton, a two-year-old boy who had valiantly survived a heart defect and corrective surgery only to have his life swept away by a virulent strain of Methicillin-Resistant Staphylococcus Aureus or MRSA, that somehow, the boy had contracted in this very hospital. “Damn it, Damn it, Damn it!” Dr. Graves said to himself inwardly.

Now Dr. Graves had to make the walk that many physicians must  make and never get inured to making. He was the one that had to tell Garret’s young parents that their first and only child was gone.

His mind, normally insightful, analytical and serenely well-informed, had become a cauldron of emotion-fueled thinking. Rage, grief, embarrassment and fear swirled through him.

He wouldn’t blame Richard Easton, the dead boy’s father, if he put his hands around his neck and tried to choke him to death.

Dr. Graves made a left turn, walking as if he were in a nightmare, and went through the swinging doors to the waiting room. When the Easton’s saw his face, they knew, and Jennifer Easton buried her face in her husband’s chest and began sobbing uncontrollably as her husband put his arms around her to comfort her.

The infection that killed Garret Easton had entered the hospital like a thief in the night and evaded what had been fairly sound safety protocols. The staff at St. Michael’s had been educated that MRSA infections are transferred primarily from skin-to-skin contact and that hand washing was mandatory after handling patients or coming into physical contact with them in any way.

Scenario Partner

The infection was discovered in an elderly patient who had been admitted to intensive care from a nursing home and was receiving respiratory therapy treatments for pneumonia. She had been in ICU for three days when an alert nurse noticed reddening in the patient’s nostrils and what looked like the beginnings of a lesion. Following hospital protocols, the patient’s nose was immediately tested and she was found to have the infection.

Once detected, the hospital’s infection control committee, which consisted of the Infection Prevention Professional, a physician and representatives from administration, nursing, operations (housekeeping and dietary) and pharmacy, was notified of the outbreak. Then every patient in the ICU was tested, in accordance with hospital procedure.

As a result of that testing, two more patients were found to be infected. All three infected patients were placed in specially designated rooms where administration of an intravenous antibiotic was initiated and where additional infection control protocols were put in place. Those measures included contact precautions (use of gowns and gloves by staff and visitors) use of dedicated non-critical care equipment, assignment of dedicated staff to care for the patients with the MRSA infection, control and monitoring of traffic in and out of the patient rooms and focused staff and family education.  Assigning the patients to specially designated rooms also allowed for effective environmental and equipment cleaning and decontamination.

It was after the three patients were placed in designated care areas and treatment for the MRSA initiated that the incision in Garret Easton’s chest had shown signs of infection and, that the connection between all the affected patients was determined to be a respiratory therapist who had failed to use proper hand washing techniques after direct patient contact.

Again, following protocols, the infection control committee directed that every patient in the pediatric wing be tested for MRSA. One more patient, a young female on the pediatric wing also tested positive for MRSA infection, but she wasn’t as compromised as Garrett, and was stabilized with the recommended course of an intravenous antibiotic.

Additional precautionary steps taken by the hospital included active infection control surveillance and re-education of staff on infection prevention policies and procedures including the importance of hand washing. The ICU and pediatric wing were vacated and an environmental cleanup was conducted. Unfortunately, it was too late for Garrett Easton, but the infection appeared to be at least under control.

Part Two

There was nothing about the hospital’s reaction to the MRSA outbreak that was random, kneejerk or left to chance.

Vickie Flaherty, a former St. Michael’s head nurse and the hospital’s current risk manager, had worked hand-in-hand with the medical directors and operations officers to make sure that the hospital’s crisis response team performed well under these kinds of circumstances.

Vickie had worked her way up the career ladder from an entry level position as a nurse’s aide 23 years previously. She had at her disposal one of the leading healthcare insurance brokerage practice teams in the country.

In the last 24 months, Vickie and her team had successfully reduced collateral requirements for workers’ compensation exposures, helped the hospital acquire a local ob/gyn practice with no increase in medical malpractice premium rates and established an onshore captive for the hospitals in-house physicians. It had been a lot of work.

She and her team had bitten off so much work lately that Vickie was starting to get a nagging feeling that in their ambitious approach she and her brokerage team may have overlooked some more fundamental developments.

Vickie’s effectiveness was based in solid education. A financial quarter didn’t go by that she didn’t attend a webinar or attend an in-person training session that gave her opportunities to increase her knowledge.

As she sat in her office on a mid-winter Wednesday, Vickie let her eye roam for the fourth time that day to a framed photo of her son and two daughters playing whiffle ball on the Jersey Shore. Vickie just stared at the photo for a while. Trim and athletic, she had learned a love of the outdoors from a young age and had the good sense to pass that love on to her children.

Vickie was a trained veteran of, the value of transparency and disclosure where hospital staff members meet with the families of injured or deceased patients in an effort to offer condolences, offer an apology, provide an explanation of facts known at that time and answer questions. Additionally, this time would be used to provide the family support and community resources as well as, to establish communication channels designating a contact person and developing a timeline for follow-up communication with the family.

Vickie got butterflies before all of these meetings but had them doubly so today, since her meeting with the family was just five minutes away.

There was nothing to be done though. She had a job to do and she had to lift herself up out of her office chair and go do it.

The Eastons and their attorney were on one side of table when Vickie entered the conference room. Shane Graves, the pediatrics heart surgeon and the hospital’s general counsel were closest to her. There was one chair open and Vickie took it. Vickie was a mother and when she caught Jennifer Easton’s eyes the look she saw there went through her like a knife.

The meeting was just two minutes old when Dr. Graves exploded.

“There is absolutely no reason your boy had to die,” Dr. Graves said, looking squarely at the Easton’s.

“He was making a good recovery, and he was killed by a hospital-acquired infection that this hospital could and should have prevented!” Dr. Graves said, pounding the table with both of his flattened palms.

The St. Michael’s attorney hurriedly tried to get Dr. Graves to settle down, but he was too late. The Easton’s attorney didn’t say anything. For once, he didn’t have to.

Part Three

Vickie left the meeting bordering on a state of shock.  Her head was spinning. In her gut she felt that Dr. Grave’s ill-timed outburst meant that her E&O limits were now in jeopardy.

When she got back to her office, she was barely settled in her chair when her phone rang. It was the head of her healthcare brokerage team.

“Vickie I got some bad news for you,” the broker said.

“What?” Vickie said, her normally genteel veneer already worn a little thin.

“Your business interruption claim and your environmental cleanup costs on that MRSA outbreak aren’t covered.”

“What do you mean?”

“MRSA’s considered an environmental pollutant under the general liability and property policy language, as first party business interruption wouldn’t normally be covered under a general liability policy.  I don’t think there is any way we can get out of this,” the broker said.

“I had no idea,” Vickie said.

“Neither did I, sorry but I didn’t,” the broker said.

There was a pause as the veteran risk management partners digested this harsh reality.

“Vickie, it’s not like you’ve had a lot of losses, we’ve been doing a good job,” the broker said.

Vickie didn’t say anything and there was a long pause.

“Here’s what you’re looking at in terms of an uncovered loss,” the broker said.

The broker had a job to do, but as he went on, the loss numbers he was reciting fell on Vickie as if she had a tin ear.

After Vickie hung up, she felt emotion choking her air passage and decided to run to the bathroom to splash some water on her face.

“Am I a fraud or am I just stupid?” she asked herself internally as she stared at herself in the mirror of the second-floor women’s restroom in the hospital’s administration building after washing her face.

The details of the botched coverage kept running through her mind like a song she couldn’t get out of her head.

“How in God’s name could I have known that?” Vickie said, out loud this time.

“Huh?” someone said from behind a bathroom stall door.

“Nothing,” Vickie said. “Sorry.”

Vickie had always played fair and by the rules.

So how was she now staring at a $2.3 million uncovered loss?

Summary

Vickie Flaherty, a well-educated, industrious healthcare risk manager, sees her institution get hit with a $2.3 million uninsured loss because of gaps in her insurance coverage after a hospital-acquired infection outbreak exposes environmental pollution exclusions in her general liability and property policies.

Video Insights: Matthew Kahn sat down with Marcel Ricciardelli, Senior Vice President, Environmental at Allied World who is the sponsor of this scenario, for an in-depth discussion of “Deadly Exposures”. Highlights of their conversation are integrated into the summary below.

1. Build staff-wide awareness of hospital-acquired infections: Healthcare-associated deaths are now one of the top 10 leading causes of death in the U.S., accounting for nearly two million infections and 100,000 deaths annually. An outbreak of Legionella at a hospital in Atlanta resulted in cleanup costs alone of approximately $1 million.

2. Be ready: Have a crisis response plan in place to contain infection outbreaks. That plan should include details of how your organization handles sterilization of rooms, clothing, bathrooms, sinks, equipment and eating utensils. The plan should also include guidance on how to communicate not only with the families of victims but with other concerned patients and the media.

3. Be adaptable: Be aware that your response plan might look good on paper but not work so well in execution. Vickie had a detailed response plan, but the hospital still found itself dealing with angry patients and families. Don’t get stuck reading a script if the situation demands flexibility.

4. Manage your message: Emotions can run high when there is a death or a serious medical outcome from a hospital-acquired infection. Vickie’s meeting with the deceased patient’s family to promote transparency and disclosure was the right approach but Dr. Graves’ outburst put the hospital in danger of losing coverage and being damaged by potential litigation. Be sure to meet with all providers before holding a similar meeting to ensure that everyone is on the same page and will communicate a consistent message.

5. Focus on exposures, not policies: In an effort to keep costs down, agents frequently focus on policies rather than the exposures that exist. Too often, they try to write the existing coverage cheaper rather than writing the right coverage at a fair price. That could leave a company exposed.

6. Review your coverages: A MRSA outbreak could be categorized as an environmental pollutant and excluded from the standard E&O (Med Mal), Property and General Liability policies. These policies should be thoroughly vetted for such exclusions.

Allied World Video Disclaimer: The information in these videos is in response to a hypothetical risk scenario.  Coverage is underwritten by Allied World Assurance Company (U.S.) Inc. and Allied World National Assurance Company.  Coverage is only offered through licensed agents and brokers.  Actual coverage may vary and is subject to policy language as issued.