"Whom are you fooling? You are not fooling me, you are not fooling your fellows; you are only fooling yourself. Is it a great feat to fool a fool?"

—Rabbi Shmuel of Lubavitch, fourth Chabad-Lubavitch Rebbe,
to a chassid who exuded less-than-honest pious airs

Yesterday, I was reminded again of this anecdote – yes, I admit that I've already used this saying in a previous blog post... – when reading a fascinating news story about a revolutionary approach adopted by the University of Michigan Health System.

Simply put, they decided to start owning up to their mistakes. The upshot? They're saving lots of time and money.

How's that?

When a treatment goes wrong at a U.S. hospital, fear of a lawsuit usually causes the doctors to clam up and vociferously proclaim their innocence.

A few years ago, officials at U of M changed all that. Health system doctors and officials now regularly meet with patients and their families, sometimes to explain that treatment was appropriate and sometimes to admit a mistake.

Their willingness to admit mistakes goes well beyond decency and has proven a shrewd business strategy, according to a 2009 article in the Journal of Health & Life Sciences Law. Malpractice claims against the health system fell from 121 in 2001 to 61 in 2006. Between 2001 and 2007, the average time to process a claim fell from about 20 months to about eight months, costs per claim were halved, and insurance reserves dropped by two-thirds.

The openness approach is catching on at places from Boston Medical Center to the University of Illinois to California's Stanford University hospital.

"Apologies for medical errors, along with upfront compensation, [reduces] anger of patients and families, which leads to a reduction in medical malpractice lawsuits and associated defense litigation expenses," according to Doug Wojieszak, spokesman for The Sorry Works! Coalition.

So, as it turns out, fooling a fool is more than foolish, it's very costly.

Who ever thought?