Circulation 81,489 • Volume 22, No. 1 • Spring 2007   Issue PDF

Malpractice Insurance Carrier Provides Premium Incentive for Simulation-Based Training and Believes It Has Made a Difference

Jack McCarthy; Jeffrey B. Cooper, PhD

In 2001, the Consolidated Risk Insurance Company (CRICO), the patient safety and medical malpractice company owned by, and serving, the Harvard medical community since 1976, introduced an incentive for anesthesiologists who received training in Crisis Resource Management at the Center for Medical Simulation (CMS) in Cambridge, MA. CRICO believes that this has made a difference and has since tripled the incentive, which is now 19%. Here’s the story of how that happened, what the training does, and why CRICO has come to believe in it.

CRICO is a bit different than many malpractice carriers. It sees its mission as one of improving patient safety. In the mid-1980s, James Holzer, then Director of Loss Control for CRICO, approached the anesthesia chairs of the major teaching hospitals affiliated with Harvard Medical School (HMS). He asked them to work toward reducing their claims, which at the time were high relative to other specialties, and increasing. That request led the chairs to create a committee to review the claims and consider what might be done. The committee decided to develop what became the first practice standards in the specialty, the HMS Standards for Minimal Monitoring during Anesthesia. In the ensuring years, CRICO saw a great improvement in claims. It has since gone on to develop many vigorous efforts to prevent adverse events in other specialties. It truly uses patient safety as the means to reduce malpractice losses.

In early 2000, the chairs of the 4 HMS Departments of Anesthesia approached the Risk Management Foundation (RMF), which manages CRICO’s insurance and claims. They asked RMF to give a reduced premium for the training that they were providing to their residents since 1994 and wished to provide to their faculty as well. In late 2000, RMF announced a 6% lower premium for anesthesiologists who had participated in crisis resource management training at CMS. It also offered a grant to offset some of the costs of the initial training. At the time, approximately 25% of Harvard insured anesthesiologists had participated in training, either in a pilot project in the early 1990s or as residents who later joined the faculty of their training programs. RMF’s data suggested that those who had participated in the training had a better claims’ experience than those who did not. While RMF did not subject their data to scientific scrutiny, their knowledge of the training experience coupled with the data led them to believe that this would be an effective program for risk reduction in anesthesia.

CMS did not then have a program aimed specifically at training its academic faculty. Using the experience in training residents in the Anesthesia Crisis Resource Management principles pioneered by Gaba et al.,1 the CMS staff and representatives of the HMS anesthesia faculty created an 8-hour course that included 4 realistic scenarios interspersed with a didactic presentation and facilitated debriefings of the videotaped sessions. The details and evaluations of the faculty are reported in an article by Blum et al.2 Overall, the faculty valued the training highly and on average suggested that it be repeated about every 18 months.

The faculty-training program, which the departments support financially, is now in its seventh year. Based on the initial positive evaluations of the participants, CRICO decided to continue the program, requiring training every 3 years to retain the lower premium. Most faculty have participated twice already. Each program has a set of scenarios targeted to their needs and to issues relevant to CRICO’s anesthesia claims. CME credits are awarded.

Recently, CRICO actuaries analyzed the malpractice claims experience of anesthesiologists who did participate in the new program and compared it to the relatively few who did not. They came to the conclusion that the program was indeed effective and further increased the differential premium to 19% starting in 2007. Some of the individual anesthesia programs have taken the bolder step of officially requiring the simulation-based training for hospital credentialing; the others do that de facto. (Note: Because CRNAs are covered by the hospitals’ overall policy, no similar premium incentive yet has been developed for nurse anesthetists.)

Based on its perceived success in anesthesia, CRICO has created a similar incentive program in OB/GYN, where they experience substantially greater losses than anesthesia. Starting three years ago, a 10% incentive was implemented for OB/GYN physicians who participated in either a simulation-based training program or an organization wide teamwork program and several other educational requirements. Although there is not yet sufficient experience with that program, CRICO claims have been trending lower at those institutions with active team training or simulation training. CRICO/RMF is now planning additional incentive programs in other specialties.

Once again, leading efforts in anesthesia have catalyzed positive changes in patient safety initiatives beyond the specialty itself.

Mr. McCarthy is the chief executive officer of Consolidated Risk Insurance Company/Risk Management Foundation. Dr. Cooper is Associate Professor of Anesthesia, Harvard Medical School, Boston, MA, and the executive director of the Center for Medical Simulation. He is also executive vice president of the APSF.


  1. Gaba D, K Fish, Howard SK. Crisis management in anesthesiology. Churchill Livingstone, 1994.
  2. Blum R, Cooper, JB, Feinstein D, Ramer D. Crisis resource management training for anesthesia faculty: a new approach to continuing faculty education. Med Ed 2004;38:45-55.