Medical Malpractice Reform
Alternative approaches to medical malpractice suits.
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After years of turmoil and conflict, the medical malpractice climate has been relatively stable in recent years. Rates of paid claims against physicians have decreased since the early 2000s, and malpractice insurance premiums have been flat or declining. Many states have passed tort-reform laws, which may include limits on damages, but tort reform on the federal level has never advanced.
The authors of a new analysis suggest that, in the absence of highly aggravated tensions around malpractice issues, the moment may be propitious for productive reforms and experiments. Michelle M. Mello, David M. Studdert, and Allen Kachalia, MD, argue in the Journal of the American Medical Association that "alternative approaches for resolving medical injuries" may be potentially more fruitful avenues for pursuing malpractice reform than legislative remedies.
Those alternative approaches include communication-and-resolution programs, pre-suit notification, apology laws, safe-harbor legislation, state-facilitated dispute resolution, judge-directed negotiation, and administrative compensation systems.
The data in Mello's article show that paid claims against physicians decreased from 18.6 per thousand physicians in 2002 to 9.9 paid claims in 2013. Median indemnity payments on claims declined from $218,400 in 2007 to $195,000 in 2013. Furthermore, 96.6% of payments made over 20 years derived from settlements; only 3.4% came as a result of jury verdicts.
In an accompanying JAMA editorial, William M. Sage, MD, agrees that there is "little indication of crisis," and that therefore an opportunity has opened. Despite the favorable developments, fundamental change is necessary to reach larger social goals.
"Declining claims and payments do not signal policy success," Sage wrote. "If significantly fewer people were being injured by medical care now than in the past and if the event of a serious error triggered a humane, effective process of healing and learning for both physicians and patients, then there would be cause to celebrate a reduction in litigation.
"But this is not the case. There is no evidence that injuries have declined. Moreover, although physicians and patients may have less of a bad process because of tort reform, they do not yet have a good process."
Physicians have long resented how the legal framework around malpractice obligates them to practice defensive medicine, ordering more tests or procedures than might be necessary, to protect themselves from patients disappointed with their outcomes and lawyers eager to find fault and land a big settlement or court verdict.
Doctors fear being sued, not only because it may potentially bankrupt them, but also because of the time and energy a proper defense will take away from their practice and because they don't want a black mark against their reputation.
"A lot of physicians are afraid," said Austin I. King, MD, an ear, nose, and throat specialist in Abilene, Texas. He recalled the high stakes involved in a lawsuit he defended some years ago. "This lady had cancer of the thyroid. Actually I never understood exactly the basis of her suit. She didn't want to blame God for her spread. She wanted to blame me instead." Although he provided textbook treatment in the case, "that didn't make any difference. She was terribly angry and it didn't matter how much information you gave her."
The woman's attorneys tried to force King to settle by raising the stakes to a $10 million lawsuit. The lawyers also threatened to go after his medical license if he didn't cave in. Because his policy only covered $1 million, "If I lost I would have to pay $9 million and declare bankruptcy," he told MedPage Today.
King refused to settle and the case went to court. "I won that suit. It was a weeklong trial," he said. "I can't tell you how many physicians came up to me and said, 'I settled because I was scared for myself and my family. I wish I had fought it.' " He thinks physicians should be encouraged to defend legitimate suits in cases where there is no error, even though lawyers on both sides prefer a settlement.
Insurance rates for malpractice protection have held steady or declined since 2006, according to Medical Liability Monitor. Yet the overall national picture conceals the ups and downs in a variety of geographic locations and clinical specialties. These "microclimates" include places like high-cost Nassau and Suffolk counties, New York, where the largest insurer raised premiums 35% on general surgeons, and Miami, where obstetrician-gynecologists pay $190,000. Internists in Minnesota, by contrast, pay $3,000 to $5,000.
Mello and her co-authors analyzed data from five regions to inform their picture of the current state of malpractice: four counties in southern California, the two Long Island counties in New York, Cook County (Chicago) and three rural counties in Illinois, and the states of Tennessee and Colorado. None of the locales showed large rate increases over the past decade.
As there is no centralized collection of data on all claims filed in the U.S., the source for the data on claims was the National Practitioner Data Bank, which includes only 30% of all claims filed. The data bank was established in 1986 with the intent of preventing doctors with competency issues from evading detection by hopping from state to state. If a malpractice payment is made in a physician's name, it is supposed to be reported to the data bank. Providers perceive these as a black mark on their record, "even though there is little evidence to show that action is taken against providers' licenses," Mello said.
Organized medicine holds firm to the belief that the stabilization in insurance rates is due to tort reform, which consists of three different strategies:
- Impose barriers to bringing suits or reaching trial
- Limit the amount of compensation that plaintiffs can recover
- Change how damage awards are paid
About 30 states have passed caps on noneconomic damages. These caps typically range from $250,000 to $1 million. Texas, among others, passed a noneconomic damages cap in 2003 that the state medical association credits with lower malpractice costs and better access to care. "The 2003 law swiftly ended an epidemic of lawsuit abuse, brought thousands of sorely needed new physicians to Texas, and encouraged the state's shell-shocked physicians to return to caring for patients with high-risk diseases and injuries," the Texas Medical Association says on its website.
Yet empirical evidence doesn't support the notion, favored among physicians, that tort reform is solving the problem, Mello wrote. Studies have shown that tort reform may reduce claims payments by 20% to 30%, but this doesn't carry through to lower insurance premiums.
"Traditional reforms do not address problems with the malpractice system's two core functions -- compensating negligently injured patients and deterring substandard care," she wrote. "The system's effectiveness as both a compensation and a deterrence mechanism is mediocre at best, and there is little to suggest it has improved over the past decade."
What has made the difference is "a welcome influx of creative initiatives that transcend traditional reforms and attempt to fix some of the system's deeper failings." Those approaches have broader goals than traditional tort reform: they try to improve patients' access to compensation and foster safety of care, while lowering liability burdens for doctors.
In 2009 the Obama administration secured $25 million for the Agency for Healthcare Research and Quality to work on nontraditional malpractice reforms. AHRQ awarded grants for seven demonstration projects and 13 planning grants.
These fall under seven main categories:
- Communication and resolution programs: Health care practitioners discuss adverse outcomes with patients and seek resolution, offer an apology, explain what happened, and possibly offer compensation.
- Mandatory pre-suit notification laws: Plaintiffs must give doctors and hospitals advance notice (1 to 6 months) that they intend to sue.
- Apology laws: When doctors and hospitals make statements of regret, apology, or fault to patients, those statements may not be used in malpractice suits.
- State-facilitated dispute resolution laws: Patients and practitioners may voluntarily work with a state agency that helps resolve the conflict. Conversations can't be used in a trial.
- Safe harbors: Laws protect practitioners who can demonstrate they followed a best-practice guideline or protocol in patient care.
- Judge-directed negotiation: Parties to malpractice cases meet with a judge who will assertively move them toward settlement, with advice from a neutral attorney with clinical training.
- Administrative compensation systems: Medical injury claims are routed into an alternative adjudication process that uses specialized experts, evidence-based guidelines for liability findings and damages, and a broader compensation standard.
Physicians have a variety of responses to these concepts, "The idea of safe harbors for adherence to guidelines has a lot of resonance with providers," Mello said in an interview. "They think, if I adhere to good medicine, shouldn't I get some defense in malpractice suits?"
There is great interest in communication-and-resolution programs, "albeit with trepidation," she added. While they may result in a calmer and less adversarial relationship with patients who have been harmed, they also increase the frequency of settlements. "Not all doctors are behind that, especially because it means more reporting to the National Practitioner Data Bank" -- a public blemish on their record. "In principle they like it," Mello said. "In practice they find it difficult to brook any reform that results in more data bank reports."
To resolve the data bank issue, Mello said, the reports should disclose more details of the individual cases. For instance, the reports should distinguish cases where an insurance company has found an individual provider is culpable, or had a competence problem. Or disclose that the organization or practitioner is paying because there were larger system failures.
Or, if a hospital could demonstrate it took certain measures in the communication-and-resolution process, and addressed any quality problems on the part of the provider by retraining, or changing practice patterns, or the environment of care, that could go into the data bank under a different category.
"If the purpose of the data bank is to alert the public to risks, then if you have taken efforts to resolve the problem, it shouldn't function as a penalty on the providers," Mello said. To effectuate these changes would require legislation, she said.
King agreed the communication-and-resolution process can be successful, but it depends on what is behind the lawsuit. "The problem is, not all suits are driven from lack of knowledge. Some suits are driven from anger at the situation, and some suits are financially driven. There isn't a one-size-fits-all answer," he said.
King, now the president of the 47,000-member Texas Medical Association, is a strong believer in the benefits of tort reform. The 2003 law, which placed a limit of $250,000 noneconomic damages for hospitals and physicians, led to a significant drop in the number of lawsuits and settlements, he said. A state constitutional amendment prevented the caps from being found unconstitutional, as the Texas Supreme Court had earlier ruled.
The constitutional amendment required a public referendum, which garnered support even in the Rio Grande Valley along the border with Mexico, King reported. That region had the highest rate of malpractice suits, with the result that "there were no doctors there, nobody was delivering babies. It was an access issue."
Mello described Texas as "a bit of an outlier." It has been a hotbed of liability activity and a pro-plaintiff environment. Claims attorneys there "are effective advocates," she said. Although the data since 2003 show a big drop in frequency of claims and payments, the effects of damages caps have been "not statistically significant or more modest in size."
She cited a study published in October in the New England Journal of Medicine that found that malpractice reforms for emergency physicians in Texas, Georgia, and South Carolina "had little effect on the intensity of practice, as measured by imaging rates, average charges, or hospital admission rates" and concluded that "malpractice reform may have less effect on costs than has been projected."
Mello and Kachalia served as investigators on several of the demonstration and planning projects for alternative dispute resolution. Mello is an investigator on the AHRQ implementation toolkit. Mello and Kachalia served as consultants to the state of Oregon on medical liability issues. Funding for Mello's work on the article was supported by grants from AHRQ.
Sage reported no conflicts.
LAST UPDATED
Primary Source
JAMA
Source Reference: Mello MM, Studdert DM, Kachalia A "The medical liability climate and prospects for reform" JAMA 2014; DOI: 10.1001/jama.2014.10705.Secondary Source
JAMA
Source Reference: Sage WM "Medical malpractice reform: When is it about money? Why is it about time?" JAMA 2014; DOI: 10.1001/jama.2014.154.
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