The cost to society as a whole would be substantially greater.
--
On Tort Reform, It's Time to Declare Victory and Withdraw
Steve Cohen, Contributor
“The greatest trick the Devil ever pulled was convincing the
world he didn’t exist.”
Verbal (Kevin Spacey) in The Usual Suspects
The second greatest trick may be the insurance industry’s
success in getting more than half the states to implement “tort reform.” That
achievement was based on the promise that restricting victims’ ability to bring
medical malpractice suits would improve healthcare and reduce its cost. Those myths have now been completely
dispelled.
The last bubble to burst was that because doctors are
fearful of getting sued, they practice “defensive medicine,” prescribing
unnecessary and costly tests and procedures.
That myth was dispatched by the recent publication of a major study in
the New England Journal of Medicine. A team of five doctors and public health
experts found that tort reform measures passed in three states – specifically
designed to insulate emergency room doctors from lawsuits — did nothing to
reduce the number of expensive tests and procedures those ER doctors
prescribed.
This latest study follows numerous others that deflated
other tort reform myths: that making it harder for victims to file medical
malpractice lawsuits would reduce the number of “frivolous” suits that “clog
the courts;” that imposing caps on the damages victims could receive would
reign in “out of control” juries that were awarding lottery-size sums to
plaintiffs; and that malpractice insurance premiums would fall, thereby
reversing a doctor shortage caused by specialists “fleeing the profession.”
None of these promised benefits became reality. That’s
because the alleged problems were themselves non-existent. Perhaps the most telling fact is that the
Department of Justice found that the median med mal award in jury-decided cases
was $400,000. In bench trials, where the
judge also serves as the jury, the median award was $631,000.The tort reform boom started in 1975 when California imposed a $250,000 cap on the amount victims of horrendous negligence could collect. More than half the states followed with their own measures capping damages, reducing the amount of time victims had to discover and bring a lawsuit, and even limiting the amount of money lawyers could be paid for representing clients.
The latest blockbuster revelation looked at the impact of
tort reform restrictions implemented in three states over 10 years ago. Texas, Georgia, and South Carolina passed
legislation that made it virtually impossible to sue doctors or hospitals for
emergency room treatment. The study examined 3.8 million emergency department
visits at 1166 hospitals between 1996 and 2012.
Why ER visits? Because the researchers knew that “emergency
physicians practice in an information-poor, high-risk, technology-rich
environment.” It was a setting, they noted, that “might lend to defensive
practice and magnify the costs.”
What they found was that doctors in the tort-reform states –
who were virtually immune to malpractice suits – prescribed just as many MRIs
and CAT scans as doctors in the control states. Removing the risk of getting
sued didn’t change doctor behavior.
In fairness, tort reform legislation has helped doctors a
little. While insurance premiums haven’t
gone down, their price increases in tort reform states have gone up a little
slower than in non-reform states – the lag is between 6% and 13%. That hasn’t constrained the insurance
industry from showing record profits.
Average returns for malpractice carriers hover around 15.6%, far better
than the 12.5% for the property/casualty segment. And the malpractice insurers’
loss ratio – the percentage of claims to premiums — is a remarkably low 61.1%.
At the same time that the tort reformers were succeeding in
limiting victims’ access to the courthouse, medical researchers were
documenting an obvious but disturbing truth: hospitals are dangerous
places. In 1999 the Institute of
Medicine at the U.S. National Academy of Sciences published its seminal study,
To Err is Human, which concluded that
between 44,000 and 98,000 patients are killed (and many more injured) in
hospitals each year due to medical errors. That number – which is more than
automobile and workplace accidents combined – doesn’t include deaths in
doctors’ offices or clinics – such as the one where Joan Rivers recently
died. By 2011, a study in HealthAffairs
estimated the number of avoidable deaths was probably closer to one million.
Several studies have agreed that only about one in ten cases
of serious negligence – and only 1% of all adverse medical events — ever result
in any sort of legal action being initiated.
Sadly, the tort reformer’s success has had one unintended
consequence that hurts everyone: they have slowed down progress in patient
safety initiatives. It is well documented that major reforms in anesthesiology
in the 1980’s were the direct result of anesthesiologists’ frustration with
many large malpractice verdicts against the specialty – and the attendant
negative publicity. In response, anesthesiologists revamped their procedures,
established mandatory monitoring, improved training, limited the number of
hours anesthesiologists could work without rest, redesigned machines and
outfitted others with safety devices.
Within 10 years, the mortality rate from anesthesia dropped from 1 in
6000 administrations to 1 in 200,000.
And anesthesiologists’ malpractice insurance rates fell to among the
lowest of any specialty. Since the
success of the tort reformers, other specialties have felt less pressure to
undertake similar self-reflective reforms.
It is important to dispel one more myth: medical malpractice
cases are about money. It is certainly not about money for the lawyers who
represent these victims on a contingency basis. In New York, medical
malpractice attorneys do not receive the one-third of the settlement or verdict
that every other type of attorney is entitled to. Instead, because of lobbying by the insurance
and hospital industries, lawyers receive a sliding scale that starts at 30% and
quickly falls to 10% of any verdict over $1.25 million. Making it not worth the
lawyers time or investment – for just to file a case, the plaintiff’s lawyer
must pay a doctor to review the file and issue a statement that the case has
merit — is just one more tool the tort reformers created to keep victims from
seeking justice.
True, monetary damages are the only way our system has of
compensating the injured. But in the 25 years I have been writing about medical
malpractice, I have never met a parent who wouldn’t give up every dime to see
their child whole.
It is time for legislators to recognize that they were
hoodwinked, dismantle the so-called reforms, and begin to look for real
solutions to make patients safer.--
‘Catastrophic’ Malpractice Payouts Add Little To Health Care’s Rising Costs
Still, study suggests, efforts needed to reduce errors that
lead to claims
Release Date: May 1, 2013
Efforts to lower health care costs in the United States have
focused at times on demands to reform the medical malpractice system, with some
researchers asserting that large, headline-grabbing and “frivolous” payouts are
among the heaviest drains on health care resources. But a new review of
malpractice claims by Johns Hopkins researchers suggests such assertions are
wrong.
In their review of malpractice payouts over $1 million, the
researchers say those payments added up to roughly $1.4 billion a year, making
up far less than 1 percent of national medical expenditures in the United
States.
“The notion that frivolous claims are routinely resulting in
$100 million payouts is not true,” says study leader Marty Makary, M.D.,
M.P.H., an associate professor of surgery and health policy at the Johns
Hopkins University School of Medicine. “The real problem is that far too many
tests and procedures are being performed in the name of defensive medicine, as
physicians fear they could be sued if they don’t order them. That costs upwards
of $60 billion a year. It is not the payouts that are bankrupting the system —
it’s the fear of them.”
Called catastrophic claims, payouts over $1 million are more
likely to occur when a patient who is killed or injured is under the age of 1;
develops quadriplegia, brain damage or the need for lifelong care as a result
of the malpractice; or when the claim results from a problem related to
anesthesia, the researchers found in a study published online in the Journal
for Healthcare Quality.
Makary and his colleagues reviewed nationwide medical
malpractice claims using the National Practitioner Data Bank, an electronic
repository of all malpractice settlements or judgments since 1986. They looked
at data from 2004 to 2010, choosing a 2004 start date because that is when data
regarding the age and gender of patients and severity of injury became
available for the first time. The information includes only payments made on
behalf of individual providers, not hospitals or other corporations, meaning
the number of payouts may be underestimated by 20 percent, Makary says.
Over that period, 77,621 claims were paid, and catastrophic
claims made up 7.9 percent (6,130 payouts). The seven-year nationwide total of
catastrophic payouts was $9.8 billion, representing 36.2 percent of the $27
billion worth of total claims paid over that time period.
The most common allegations associated with a catastrophic
payout were diagnosis-related (34.2 percent), obstetrics-related (21.8 percent)
and surgery-related (17.8 percent) events. Errors in diagnosis showed twice the
odds of a catastrophic payout compared with equipment- or product-related
errors and were associated with a roughly $83,000 larger payment.
The age of the physician was unrelated to the likelihood of
a claim, suggesting inexperience is not necessarily a factor. But 37 percent of
catastrophic payouts involved a physician with a previous claim in the
database. The largest payout in the study was $31 million.
Makary says the data suggest that the focus of legal reform
efforts should be on doctor protections aimed at reducing defensive medicine
rather than the creation of malpractice caps.
He says his findings argue for more research to determine
what interventions might prevent the type of errors that result in catastrophic
payouts, with the overall goal of improving patient safety and reducing costs
at the same time.
But real cost reductions, he says, will come from reducing
the overuse of diagnostic tests and procedures.
Other Johns Hopkins researchers who contributed to this
study include Paul J. Bixenstine, B.A.; Andrew D. Shore, Ph.D.; and Julie A.
Freischlag, M.D.