56 Pediatric Patients’ Stem Cells Destroyed in Hospital Freezer Failure

When a storage freezer at Children’s Hospital Los Angeles (CHLA) malfunctioned last month, 56 pediatric patients, many undergoing cancer treatment, lost their stem cells. The cells were collected before patients began cancer treatments, like chemotherapy and radiation, and stored for potential future use.

Following the incident, CHLA sent notification letters to the affected families, unfortunately addressed to patients rather than their parents. According to some parents, the notification error worsened the pain for them and their children. In a subsequent statement, the CHLA apologized for both the freezer malfunction and the notification process, citing failed temperature sensors and inadequate system safeguards, and detailing the corrective measures undertaken to prevent future losses and notification errors.

For affected cancer patients and their families, the loss was devastating. The stem cell collection procedure can be grueling and after cancer treatment, it is often impossible. If their cancer returns, patients without their own stored cells must depend on donor cells for treatment, and finding a suitable donor can be a long and difficult process. All but one affected patient had undergone treatment at the time of the freezer failure. That patient was required to repeat collection process.

“This is truly a tragic event,” said Maggie Karnick, Senior Underwriter, Burns & Wilcox, Chicago, Illinois. “It highlights the need for thorough and sophisticated risk management controls. Healthcare risk management needs to be proactive in performing routine risk assessments and identifying potential exposures.”

Cryopreservation frequency and risks

Incidents like the one at CHLA carry significant potential liability risks. CHLA addressed the situation quickly by apologizing, implementing new procedures and upgrading equipment. “The best thing to do to minimize harm to patients is to act quickly and be transparent,” said Paul Greve, Senior Director, Markel Assurance, Fort Wayne, Indiana. “It looks like this was done here and it is commendable.”

Failures in cryopreservation and long-term storage have also occurred at assisted reproductive facilities, where eggs and embryos to be used for in vitro fertilization (IVF) procedures are stored. An estimated 1 million frozen embryos are currently stored in facilities across the United States.

“The best thing to do to minimize harm to patients is to act quickly and be transparent.” – Paul Greve, Markel Assurance

Fertility treatments like IVF are increasingly routine; according to the Society for Assisted Reproductive Technology, fertility preservation cycles totaled 10,936 in 2017, increasing from 8,825 in 2016. A 2018 review by the Canadian Fertility and Andrology Society states that the number of egg freezing cycles has been steadily increasing since 2013, accounting for nearly 2 percent of the 33,092 IVF cycles in Canada last year.

In 2018 a liquid nitrogen tank failed at the University Hospital’s Ahuja Medical Center fertility clinic in Cleveland, Ohio, destroying some 4,000 frozen eggs and embryos and impacting the lives of more than 1,000 patients. The Pacific Fertility Center in San Francisco experienced a similar malfunction around the same time and 1,000 stored eggs were compromised.

In the aftermath of these incidents, hundreds of lawsuits were filed in California and Ohio courts, not only seeking compensation for the loss of eggs and embryos, but the chance for plaintiffs to describe their mental anguish and hold facilities accountable. Although courts have ruled that embryos are not considered legal persons, which limits liability to some extent, hospitals and fertility clinics can still be held liable for loss of property, breach of contract, acts of negligence and mental anguish in such cases.

Late last month, more than 150 lawsuits were settled against University Hospital for undisclosed amounts, and hundreds more are still pending. Nineteen lawsuits, on behalf of 40 patients, have also been filed against CAS DataLoggers Inc., the company responsible for installing and monitoring the storage alarm system at the University Hospital facility.

A review of a single carrier’s reproductive endocrinology malpractice claims between 2005 and 2015, published in the Journal of Assisted Reproduction and Genetics, reported that cases involving embryos accounted for the highest number of claims paid—38 percent—with an average payment of $199,188. The researchers noted the relatively high average cost of settlements in reproductive medicine compared to those in other specialties.

High stakes demand broad coverage

“Healthcare carries a significant weight of liability,” said Nathan Rose, Senior Underwriter and Business Development Specialist, Burns & Wilcox Canada, Vancouver, British Columbia. “Businesses should have a suite of insurance products to help with the financial burden.”

Medical Malpractice Insurance coverage is an essential piece of the risk management strategy for any business involved in the storage and handling of human cells and tissues, Rose asserted. “There are many different components that could be affected and you would want to respond to this type of incident with the broadest coverage possible.”

“Healthcare carries a significant weight of liability. Businesses should have a suite of insurance products to help with the financial burden.” – Nathan Rose, Burns & Wilcox Canada

Medical Malpractice Insurance can include coverage for public relations costs, legal costs and risk management services to help businesses assess their exposures and implement proactive risk management strategies, he said.

If a hospital or other facility is found to have insufficient contingencies in place to prevent losses in the event of equipment failures, Rose added, it can be held responsible for resulting losses and damage. In such cases, Directors & Officers (D&O) Insurance coverage can help manage costs incurred when management, policy and procedural decisions made by leaders of hospitals and other healthcare facilities are called into question.

Greve noted that Commercial Property Insurance coverage can help manage losses and expenses incurred by organizations due to property damage and equipment failure and Professional Medical Liability Insurance coverage can include losses and subsequent expenses stemming from human error, omissions and negligent acts. Products Liability Insurance for equipment manufacturers should also be considered, he said, as manufacturers may also be named in lawsuits and found liable for injuries arising out of equipment failure.

Facilities involved in storing and handling human cells and tissue must think outside of the box to identify potential hazards and address them in advance, Greve said. “This is not a traditional medical liability risk,” he pointed out. Evaluating the broad scope of an organization’s risk through enterprise risk management programs and envisioning worst-case scenarios are ways to minimize risk for more unusual occurrences. Greve added that outside consultants who specialize in enterprise risk management can be valuable resources in supporting such efforts.

Safeguarding precious resources

“When you are dealing with any healthcare facility, it is all about the risk controls. Regardless of how large or small you are, it should be your top priority.” – Maggie Karnick, Burns & Wilcox

Although medical facilities that handle and store human cells and tissue should mitigate their exposures by investing in adequate coverage for potential losses, Karnick emphasized medical facilities should also plan ahead by running worst case scenarios, and carefully creating a contingency plan to lessen the impact on their patients.

From large hospital systems to small fertility clinics, risk management is the key to mitigating exposure, she said. “When you are dealing with any healthcare facility, it is all about risk controls. Regardless of how large or small you are, it should be your top priority.”

Karnick identified three main aspects of effective risk management: identifying risks, implementing adequate policies and procedures, and ensuring all employees and involved parties are properly trained to recognize risks and respond to incidents.

In addition, she said, a health care facility’s culture must be proactive. “Redundancy in sensors and alarms, as well as redundancy in risk assessments and training, will help to greatly protect an insured from these types of exposures and losses.”

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This information was provided by Burns & Wilcox, North America’s leading insurance broker and underwriting manager. Burns & Wilcox works exclusively with retail insurance brokers and agents to assist clients like you with their specialty insurance needs. Ask your insurance broker or agent about Medical Liability, Medical Malpractice, Directors & Officers (D&O), or Products Liability Insurance coverage that might be right for you.