What does "third-party liability" refer to in health care?

Third-party liability in health care refers to situations where an entity other than the patient or health care provider is held responsible for medical costs or damages. This often involves insurance claims that arise from incidents of negligence that impact the patient but are not directly the fault of the patient or health care provider. For instance, if a patient is injured due to a defective product or through the actions of another party, third-party liability allows that patient to seek compensation from the responsible entity, such as a manufacturer or another service provider.

This distinction is crucial in risk management, as it helps identify potential areas of liability that can affect health care institutions, and informs strategies for mitigating risks and ensuring that patients receive the compensation they deserve without placing unwarranted financial burdens on providers.