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Is There Any Hope for Malpractice Reform?
Anne L. Finger, MA - http://www.medscape.com

There Are Rays of Hope

Medical malpractice continues to loom large in the minds of just about every practicing physician. Claims and rates are declining, but the problem of lawsuits against physicians is far from tapering off. And upcoming changes in medicine due to doctor/hospital consolidations and uncertainty about the impact of the Affordable Care Act may bring more developments.

Michael Matray, Editor of Medical Liability Monitor, says, “The situation has definitely improved in the past five years,” in part because of the emphasis on risk management, with physicians receiving credits for attending seminars and advice from risk managers in their offices on how to do better. “Supporters of tort reform have been very successful over the past couple of years,” he adds, and it’s now very difficult to bring a claim to trial.

“It’s expensive for plaintiff attorneys; they have to invest a lot and may not be able to make a profit,” he says. Although claims are at a historic low and claim frequency is down, he says, malpractice insurance is still a “giant investment in the physician’s work life. It would be wrong to ask doctors, ‘Why are you complaining?'”

But to defense attorney Michael Sacopulos of Sacopulos, Johnson & Sacopulos in Terre Haute, Indiana, the situation seems much the same as it did five years ago. “Some say there are fewer claims being filed, but I don’t see that.”

He finds claims of the same value and nature as in the past, with one exception: “I have seen an effort to bypass med-mal rules and regulations, for example, through product liability cases involving hardware installation — putting the doctor into the chain of responsible parties. The plaintiff bar positions a claim to avoid the damage caps.”

Brian Atchinson, CEO of PIAA (Physician Insurers Association of America), says, “Things have been relatively stable for a few years, but there’s tremendous uncertainty about the future: health care delivery, the relationships among physicians, hospitals, nurse practitioners, and physician assistants — things are evolving rapidly in so many ways.” Concerning the reduction in rates, he says, “One could say they’d be even lower if the cost of claims were not so high.”

According to Richard Anderson, MD, CEO of The Doctors Company, the med-mal situation today is “a mixed bag. Over the past five to six years, some things are better: the frequency of claims declined 40% in 2012 compared with 2004. That’s welcome.” But the rising yearly cost — 50% higher in 2012 than in 2000 — is a concern. “Overall, there is still an unconscionably high number of claims. The average neurosurgeon has one claim every five years.”

And yet, “We still win 82% of all claims, so most of the claims that the plaintiff’s bar is filing are fruitless.”

Taylor Lincoln, Director of Research for Public Citizen’s Congress Watch, says, “Claims have gone down so much that there’s not too loud a call for reform, and the issue has receded politically.” He expressed concern that fewer claims mean a lot of injured people aren’t getting help. But, he says, “I try to steer the debate: It’s not about litigation; it’s about errors. Though it’s better for patients if they’re getting more damage awards, the real solution is fewer errors.”

Latest Malpractice Developments: What’s Working?

Many malpractice attorneys and a number of researchers say that of the various med-mal tort reforms, the caps on noneconomic damages have had the greatest impact. (Anderson says that to be successful, a cap must be around $250,000.)

According to a report published by the Robert Wood Johnson Foundation, such caps have reduced average awards by Is There Any Hope for Malpractice Reform?

Anne L. Finger, MA

20%-30% in states with caps; physicians’ premiums have risen 6%-13% more slowly than in states without caps.[1]

But damage caps have been criticized by others because they impose a greater burden on poor and elderly persons. As Matray points out, “If you cap pain and suffering at $250,000, the only other thing is economic damages, and a person 35 years old has an expected income higher than the elderly.”

In nine states, malpractice caps have been found unconstitutional.[2] To circumvent such findings, states such as Texas put the issue on the ballot and amended their state constitution to grant the legal right to cap damages.

The “damage cap” issue is likely to arise in November 2014 in California, where the granddaddy of tort reform, the Medical Insurance Compensation Reform Act (MICRA), became law in 1975

during a medical professional liability crisis. On March 24, 2014, trail attorneys submitted signatures to qualify a MICRA initiative for the November ballot. The initiative would increase the $250,000 cap on pain and suffering damages to more than $1 million, adjusted for inflation.

It would also require drug and alcohol testing of doctors and the reporting of a positive test to the California Medical Board. [3] If the initiative passes, could there be implications beyond California? “It could be a concern,” says Atchinson, whose organization’s Website states, “If MICRA’s cap is undone now, no state caps will be safe in the future.”[4]

Other tort reforms have been proposed or implemented; however, research hasn’t backed their impact as solidly as it has damage caps, or if they are already in place, data are insufficient to determine their value to date.

Health courts. “Medical courts have some promise,” says Anderson. “Now the legal standard of care is whatever the judge and jury decide that day. With medical courts, there’s more predictability in the law; if you have established precedents, at least you know where you stand.”

Certificates of merit. These require that a lawsuit is accompanied by a certification that a claim is valid. According to PIAA, insurers in Michigan particularly report positive results from this approach. Thirty-three states have a pretrial screen or certificate of merit.[2]

Caps on attorney contingency fees. Anderson is unequivocal: “These combat the plaintiff bar’s parasitic form of venture capitalism. Although personal injury lawyers win only a small percentage of their cases, the high awards allow them to maintain a very comfortable lifestyle. We wouldn’t accept an 80% error rate in any other profession.”

In contrast, Lincoln of Public Citizen feels that caps on attorney contingency fees make it hard for the patient to find an attorney. “What business is it of the people putting forth these proposals how much money attorneys make?” he asks. Sixteen states have laws regarding caps on attorney contingency fees.

More Positive Malpractice Developments

“Safe harbor” laws. These laws remove liability for physicians engaged in best practices. Endorsed by two Institute of Medicine committees, these laws have been repealed in Maine, Florida, and Minnesota.[2]

“They are built on a false premise,” states Anderson, who says these are really early offer and compensation laws. “You are safe only as long as you admit guilt and make a payment.” With the high percentage of unfounded claims, “that would mean 82% of the time, doctors would be making payments for nothing.”

Cooling-off period. In Washington State, a law prevents individuals from filing suit until 90 days after notifying the healthcare provider that they intend to file suit. The cooling-off period reportedly allows discussions to begin about the bad outcomes sooner and reduces the likelihood of litigation. At least 10 other states and the District of Columbia have a cooling-off period[6]; in Massachusetts, it’s part of a reform package that includes disclosure, apology, and offer.[7] Schedule of payments. “Periodic payments are very helpful,” says Anderson. “If a plaintiff receives, say, $10 million, instead of a lump sum, the money is dispersed over the patient’s lifetime. That makes it more feasible for the system to accommodate large settlements and is better for the patient, who is secure in the knowledge that the money will be there when needed.” Thirty-one states have some form of this rule.[2]

In addition to the above approaches, two procedural reforms under discussion are enterprise liability/enterprise insurance, which would move liability from physicians to hospitals (stressing system errors rather than individual ones), and no-fault compensation, which would replace litigation for birth-related damage with actions by administrative commissions. Robert D. Leflar, JD, MPH, writing in Chest,[5] described these broad approaches as “worthy of attention.”

“Sorry” Laws, Early Offer and Compensation, and the Michigan Model

One promising response to medical liability involves the University of Michigan Health System (UMHS) approach, which was created with the belief that most tort reforms “do nothing to address the primary reasons patients sue.”[8] The UMHS approach is effective, says Matray, in part because it removes the adversarial nature. “They [UMHS] polled a lot of medmal plaintiffs who said, ‘Nobody seemed to care.'”

In the UMHS, a plaintiff must provide the potential defendants with the claims, in writing, 182 days before filing suit. During that period, the defendant can investigate the claims and contact the patient or family, and the patient can consider whether or not to continue the legal path. The system aims to “Compensate quickly and fairly when unreasonable medical care causes injury; Defend medically reasonable care vigorously; and Reduce patient injuries (and therefore claims) by learning from patients’ experiences.”[8]

Doctors, patients, and lawyers hold “Open, honest, and robust discussions,” and “Patients develop a thorough understanding of what happened before misconceptions and bogus information drive them to the courthouse.” As a result, “litigation is relegated to the role it was meant to play: the last resort for resolving intransigent disputes.”[8]

Anderson says of the UMHS model: “They have done a very nice job in this area. If it can be built more widely, it would be very helpful.” He adds that expressing empathy is always the right thing to do, and this approach has the significant prospect of taking the venom out of lawsuits. But the devil is in the details: “Saying ‘I’m sorry’ is not the same as saying ‘This is malpractice’; it shouldn’t necessitate compensation.”

Lincoln of Public Citizen also finds something positive in “sorry” laws: “The preliminary data out of Michigan looks encouraging.” He adds that he doesn’t think the patient should lose the right to use the information they’ve been given in litigation. “I think doctors are obligated to apologize anyway; they should admit things because it’s their job.” What’s Happening Nationally?

In 2010, the Agency for Healthcare Research and Quality (AHRQ) funded seven 3-year demonstration projects with grants totaling $23.2 million.[9] All were designed to incorporate one or more of these categories: patient safety and medical liability reform innovations, preventing harm through best practices, improving communication with patients, and offering alternative methods of dispute resolution.

The projects are based in Chicago, Minneapolis, Houston, St. Louis, Seattle, New York, and Boston. They focus on disclosure efforts, a nationwide collaborative to improve perinatal safety, enhanced communication training for healthcare workers, and various approaches to identify medical errors and protect patients from injury.

“AHRQ recently informed us that the preliminary findings from the demo projects were positive,” says Atchinson of PIAA. “More information is expected from AHRQ within the next few months.”

What’s Going to Happen in the Future?

“The next decade will be difficult,” says Anderson. He believes that this period is similar to 100 years ago when the publication of the Flexner Report revolutionized medicine. “We’re going to be changing the nature of the doctor’s responsibility; from being a relentless advocate for the individual patient to becoming an advocate for population health.” If that view is correct, he says, “it’s a major change — it may be good or bad, but it will be a major change.”

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Cite this article: Is There Any Hope for Malpractice Reform? Medscape. Jul 17, 2014.

References

  1. Mello MM, Kachalia A, Goodell S. Medical malpractice — update. The Synthesis Project, Robert Wood Johnson Foundation. April 2011. http://www.rwjf.org/content/dam/farm/reports/reports/2011/rwjf70017 Accessed May 13, 2014.

  2. Physician Insurers Association of America. State enactments of selected health care liability reforms. April 29, 2013. https://www.piaa.us/docs/GR/State_Enactments_with_Citations_4-2013_logo_update.pdf Accessed May 14, 2014.

  3. Egelko B. High-impact details in initiative aimed at doctors. SFGate. October 30, 2013. http://www.sfgate.com/health/article/High-impact-details-in-initiative-aimed-at-doctors-4940955.php Accessed May 14, 2014.

  4. Physician Insurers Association of America. MICRA is a national issue. https://www.piaa.us/docs/GR/MICRA.pdf Accessed May 14, 2014.

  5. Leflar RB. Medical malpractice reform measures and their effects. Chest. 2013;144:306-318.

  6. Illinois State Medical Society. Health courts and other alternative medical liability solutions. January 2011. https://www.isms.org/Login.aspx?RTN=/workarea/DownloadAsset.aspx?id=2147485437 Accessed May 14, 2014.

  7. Mass. embraces ‘disclosure, apology, offer’ approach for med mal cases. Insurance Journal. August 7, 2012. http://www.insurancejournal.com/news/east/2012/08/07/258509.htm Accessed May 14, 2014.

  8. Boothman RC, Blackwell AC, Campbell DA Jr, Commiskey E, Anderson S. A better approach to medical malpractice claims: The University of Michigan experience. J Health Life Sci Law. 2009;2;125-159. http://www.med.umich.edu/news/newsroom/boothman%20et%20al.pdf Accessed May 15, 2014.

  9. Agency for Healthcare Research and Quality. Medical liability reform and patient safety initiative progress report. November 2009. http://www.ahrq.gov/professionals/quality-patient-safety/patient-safetyresources/ resources/liability/medliabrep.html Accessed May 13, 2014.