INTRODUCTION

The purpose of a quality control program is to improve the quality of the medical care patients receive. It is usually assumed that an overall improvement in the quality of medical care will result in the reduction of financial losses due to malpractice litigation. While most administrators realize that the reduction of legal risks is critical in today's health care environment, quality control programs often slight the legal risks in favor of more classic medical risks. This happens because the structure of quality control programs evolved before litigation was a significant problem for hospitals. This is a very financially hazardous situation because of the increasing amount of litigation against hospitals and other institutional providers.

The rapid increase in litigation will force the hospital of the 1980s to rank the prevention of legal risks at least on a par with traditional medical quality assurance problems. Hospitals that fail to adapt to this new environment will see litigation losses and skyrocketing insurance premiums seriously impair their ability to conduct business. This does not mean that the quality of medical care must suffer because of the need to prevent legal risks. On the contrary, no strategy that sacrifices quality medical care can effect a long-term reduction in litigation losses. the effective management of legal risks does not change the need to improve the overall quality of medical care; it only changes the way the improvement is obtained.