Clear Skies Ahead for Patient Safety Organizations?


The legal uncertainty surrounding Patient Safety Organizations (PSOs) started shortly after The Patient Safety and Quality Improvement Act (“PSQIA”) of 2005 created them. PSOs were created to:

  • Aggregate quality of care data
  • Provide in-depth analysis on that data
  • Utilize that output to improve patient outcomes

All the while, PSOs would protect healthcare providers from having their own data being used against them. The organizations are great in theory, as health plans, systems and providers would have a protected place to compare quality of care data, including negative instances. This would serve as a vehicle to improve the quality of healthcare in the U.S. without legal prosecution representing a road block to participation.

Ongoing legislation and court battles have put PSOs in the spotlight. Over the past few years, multiple court cases have defended the place of PSOs. As recently as September, two cases were upheld in Florida courts: Loyless v. Flager Hospital and Petraskiewchz v. Laser Spine Institute. These cases defended the security of the quality of care data, preventing it from being used in lawsuits against the health systems utilizing the PSOs to create quality measures intended to improve quality of care. TripleTree views these as positive steps but there are additional cases that must be resolved before broader adoption takes place.

Currently, there are 80 PSOs in the U.S. ranging from individual health system-run PSOs such as Ascension Health Patient Safety Organization; Chicago Breast Cancer Quality Consortium, a not-for profit-organization; and PSOs run by software companies like Verge Solutions and Quantros. The majority of the 80 organizations were created by health systems or not-for-profit organizations. PSOs created by health systems or not-for-profit organizations excel within their own fields as they have regional and specialty-specific information, however historically these institutions have lacked the capabilities to stand up data and analytics, a strength of some software companies. We believe this absence of capabilities creates an opportunity for software companies given their expertise to aggregate disparate data streams, analyze the information and provide actionable output. Additionally, software vendors have the infrastructure and footprint in place to integrate and analyze data from across the country in an efficient manner, thus presenting them the opportunity to deliver a cost-efficient solution to the market at scale upon widespread market adoption. As the government continues to redefine which measures determine quality care and tie reimbursement to them, independent software companies will be in a great position to incorporate the measures into their products to continue providing meaningful information to PSO constituents.

We believe the true potential of PSOs lies in the opportunity to deliver cost-efficient, scalable databases with powerful analytics that provide meaningful and actionable data. Independent software companies are uniquely positioned to successfully deliver upon this. These vendors provide the opportunity to be a “voice of truth” to get payers, systems, providers and other constituents to collaborate together to improve the value and quality of healthcare.  Their independence can help eliminate data integrity questions based on perceived conflict of interest from provider affiliated organizations and others.

Currently, the potentially powerful opportunity for PSOs lies in the courts. The continuing cases brought against PSOs threaten their ability to function and are continually forcing players out of the industry. The court cases playing out in Kentucky are important to watch as they are at the forefront of PSQIA interpretation and could be a precedent to mark other cases. Recent legal outcomes give hope that the upcoming rulings will be pro-PSO and allow this unique opportunity to grow. Assuming the legal issues are eventually settled, realizing the full potential of PSOs will likely be led by technology companies that provide independent, flexible and innovative solutions that can drive industry action.

Let us know what you think.

Ian Goodwin
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