DART - Decision Analysis Reserve Targeting
What is DART?
DART, or Decision Analysis Reserve Targeting, is a scientific process to ensure adequate claim case reserves.
Why DART?
Even with significant tort reform in some jurisdictions and progress in improving patient safety and the quality of care, claims remain a large and growing problem. Amounts at issue are growing with the cost of care. Increasing sophistication and complexity of care introduces new opportunities for things to go awry. Unfortunate outcomes can lead to claims even when there is high confidence in the standard of care. And some claims can ripen into cases with millions of dollars potentially at stake.
To deal with these, providers need to communicate the issues to insurers, and insurers need to determine how much to set aside of potential payouts (case reserves) and to set case management and negotiation strategy.
To date, the best and standard approach for meeting these challenges is to have an experienced person “guess the number.” This leads to frequent disagreements between providers, counsel, and insurers. Even worse, to avoid contention reserves are often set at a low placeholder value, resulting in stair step reserve increases as a case develops. Consequently, reserves on the books are often a poor estimate of what the potential liability for open cases will be. Insurers risk being penalized by their actuaries for being inadequately reserved.
How does DART work?
To meet these challenges, Stanford Risk Consulting developed the Decision Analysis Reserves Targeting (DART) process. DART applies the proven methods of decision analysis, which have been successfully applied in cases where potential liabilities were in the hundreds of millions or even billions of dollars.
What can DART do for me?
The DART process provides:
- A fast way for physicians, experts, counsel, and insurers to develop a robust and early assessment of exposure in cases and claims
- A richer medium for communicating and quantifying the issues and risks in a cases
- An explicit and defensible record of the case evaluation which can be reviewed and updated;
- A complete and common understanding of total potential exposure in a case;
- A means of process validation and quality assurance;
- Guidance in case management and strategy, including negotiation or mediation.
Who benefits most from DART?
With DART, physicians, counsel, and insurers rapidly arrive at a thorough and solid understanding of what’s at issue in a particular case and how much the exposure is.
First developed and successfully applied in-house at Stanford Medical Center, SRC now offers the benefits of the DART process to other providers and insurers. The cost to implement it can be paid back with getting just one critical case right.
For More Information
Contact Ed Hall, Senior Director, Risk Management Controls & Education
(650) 736-8502
ehall@stanfordmed.org
