The future of malpractice reform

December 18, 2014

Is tort reform capable of achieving gains for physicians when it comes to medical liability? The jury is out.

Beyond specific recommendations, proposals and legislation for fixing the nation’s medical liability issues, there seems to be a growing sense-and mounting evidence- that “tort reform,” broadly construed, may not be  effective at accomplishing what it’s supposed to. So where does that leave reformers and physicians?

Malpractice reformers have pursued many strategies in an attempt to rein in the nation’s malpractice costs and craft a system that benefits physicians, patients and the healthcare system as a whole. A growing body of evidence suggests that many “tort reform” efforts simply don’t accomplish what they’re intended to.

In fact, earlier this year the American College of Physicians (ACP) released a detailed position paper on malpractice reform that revisits many old ideas, according to some experts who follow reform efforts.

“It’s a pretty standard list of tort reform proposals,” says David Orentlicher, J.D., codirector of the Hall Center for Law and Health at the Indiana University McKinney School of Law.

Another malpractice expert goes further. “There’s nothing new here. Some of this stuff is literally decades old,” says Keith Hebeisen, J.D., former chairman of the American Bar Association’s Standing Committee on Medical Professional Liability.

Even the “newer” reforms on the ACP’s list typically are at least 10 years old, though some, such as safe harbors, have not been tried much in the United States, says Allen Kachalia, J.D., associate professor at the Harvard School of Public Health.

Patient safety
In its first recommendation, the ACP paper nods to quality control, then switches to “We should make it harder to sue doctors,” followed by suggestions how, says Bernard S. Black, J.D., of Northwestern University’s School of Law and Kellogg School of Management. “We don’t learn from our mistakes,” he says. “We need incentives for safety that are stronger than what we have now.”

For example, Black suggests, if a hospital makes a mistake, it should have to fix it at no cost to the patient. As things stand now, he says, “Hospitals get paid more if patients get complications.”

Orentlicher agrees with the paper’s emphasis on patient safety, but adds, “The medical profession hasn’t done enough to police itself.”

On a more positive note, both men like the ABIM Foundation’s Choosing Wisely campaign that aims to help patients choose care that is supported by evidence, does not duplicate other tests or procedures, is free from harm and is truly necessary.

Next: Damage caps

 

Damage caps
Caps on malpractice damages, particularly those on non-economic damages, are a staple of malpractice reform efforts and still get a lot of attention, says Kachalia, but there’s  a broad feeling that they can be unfair to patients.

Caps don’t necessarily get at the core issues, he says, which include the realities that injured patients often don’t sue and that injured patients can nonetheless lose suits.

“Caps on non-economic damages can prevent full restitution to the patient,” adds Orentlicher, because of the customary one-third cut for the plaintiff’s legal fees.

Moving beyond caps, Orentlicher likes the periodic-payments idea, because a lump sum can under- or over-estimate the patient’s needs. “That strikes me as reasonable,” he says.

In addition, he says a sliding scale for attorneys fees “makes sense,” though it would make finding an attorney more difficult for some patients. Orentlicher cites a recent Wall Street Journal article that identified a threshold of about $100,000 for being able to engage an attorney.

He’s concerned that mandating the disclosure of collateral-source payments, such as those from health insurers, might undermine the “deterrence signal” to physicians.

Communicate and disclose
The position paper’s Recommendation 5 is an important one, because communication and disclosure “gets away from the whole deny-and-defend attitude...It benefits the patient to have an honest conversation, and it’s the ethical thing to do,” says Ryan Crowley, senior associate for health policy at the ACP and the position paper’s author.

He suggests also that the growth of team-based care might help push communications and disclosure as an approach for preempting litigation.

In 2012, Massachusetts enacted a law to facilitate a “Disclosure, Apology, and Offer” approach to medical malpractice claims. It provides for a six-month cooling-off period before litigation begins, allowing time to go through a DA&O process, which would feature sharing of all pertinent medical records and full disclosure by providers. Statements of apology by providers would be inadmissible in court.

The Massachusetts Medical Society, Massachusetts Bar Association and Massachusetts Academy of Trial Attorneys all agreed on the bill’s language.

Next: State efforts at malpractice reform

 

Safe harbors
The idea of gaining some liability protection from following evidence-based guidelines is an appealing one, but Hebeisen sees an obstacle to their general acceptance: Most medical societies don’t want their practice guidelines used as standards of care.

More broadly, Hebeisen notes, medical societies want guidelines to protect doctors, but don’t want them used against doctors (as in the ACP position paper). It’s the lack of balance that especially frustrates him: “Every safe harbor proposal I’ve seen has been one-way,” he say

s.

Health courts and ACMs
Health courts are another proposal for malpractice reform, and have the advantage of having been tried outside the country.

Administrative compensation models differ from judge-directed health courts in that claims decisions are made outside of court by an administrative agency. ACMs are currently in use in Sweden (which also has no-fault health courts), Denmark and New Zealand. All three reportedly apply collateral-source offset rules.

Crowley highlights the difference between the negligence standard currently used in malpractice litigation and the avoidability standard often used in health courts and ACMs.

The ACP position paper quotes “Administrative Compensation for Medical Injuries: Lessons from Three Foreign Systems,” a report published by The Commonwealth Fund in 2011: “Replacing the negligence standard with a more liberal, less stigmatizing compensation standard, such as avoidability, reaps multiple benefits. In addition to easing injured patients’ access to compensation for preventable injuries, it preserves physician-patient relationships, encourages transparency about adverse events, and fosters physician participation in the claims process.”

This proposal also lacks balance, says Hebeisen, who uses the analogy of workers’ compensation. When workers’ comp was adopted, a guarantee of (at least limited) recovery by an injured worker was traded off against the loss of the right to sue the employer.

In contrast, Hebeisen says, health courts would limit only the plaintiffs. ACMs or health courts also raise constitutional concerns about the right to trial, says Kachalia, though they could be constitutional if structured properly.

As to the likelihood of health courts and ACMs being used here, Crowley concedes that they’re “a pretty drastic departure from the way things are done now.”

Next: Myths and truths about medical malpractice

 

 

 

Next: The future of tort reform

 

Limited success
Beyond all of the specific recommendations, proposals and legislation, there seems to be a growing sense that “tort reform,” broadly and perhaps vaguely construed, may not  accomplish what it’s supposed to. “A lot of these reforms don’t have the desired impact,” says Orentlicher.

First, some efforts at the state level have been invalidated by state supreme courts over constitutional issues. For example, some state supreme courts have struck down damages caps, says Orentlicher.

Nine states adopted non-economic damages caps in 2002 to 2005 and in two states these were overturned by courts, according to Black. No federal cases have ever challenged caps on damages, Hebeisen says, because they have usually been struck down by courts at the state level. As a rule, he says, “Anything that takes anything away from juries gets shot down.”

A paper that  Black and coauthors published on the Social Science Research Network (SSRN) in 2013 reported that the per-physician rate of paid medical malpractice claims has been dropping for 20 years, and in 2012 was less than half of the 1992 level. Though the wave of damage cap adoptions contributed to this, the researchers noted that “there are also large declines in no-cap states.” Some advocates have focused on the hope that malpractice reform could help a state improve its supply of physicians.

However, another paper that Black coauthored, published in February on SSRN, found that in Texas, “Physician supply was not measurably stunted prior to reform, and it did not measurably improve after reform. This is true for all patient care physicians in Texas, high-malpractice-risk specialties, primary care physicians, and rural physicians.”

Finally, Black notes that while other studies have found no connection between tort reform and mortality, he and Northwestern University economist Zenon Zabinski, Ph.D., used measures of adverse events developed by the Agency for Healthcare Research and Quality to examine whether malpractice reforms affect in-patient safety. With analyses of five states that adopted caps on non-economic damages from 2003 to 2005, Black and Zabinski found “consistent evidence that patient safety generally falls after the reforms, compared to control states.”

Black summarizes the findings for Medical Economics as: “Bad things in hospitals go up, but they aren’t bad enough to kill you.”  Perhaps following tort reform, he says, “You do fewer defensive things, but more risky-but-profitable things.”

Once more into the breach
Though Crowley predicts that “tort reform at the federal level isn’t going to happen any time soon,” efforts have not stopped. He and Kachalia point to H.R. 4106, the Saving Lives, Saving Costs Act that was introduced in February, 2014. The bill would:

  • establish “a framework for health care liability lawsuits to undergo review by independent medical review panels if providers allege adherence to applicable clinical practice guidelines,”  

  • require HHS to publish clinical practice guidelines provided by national or state medical societies or medical specialty societies designated by the Secretary and to set up standards for the development of such guidelines, and  

  • require an independent medical review if eligible medical professionals assert that they adhered to applicable clinical practice guidelines and establish procedures for the use of such a panel’s findings at trial.


The bill was referred to the House Subcommittee on the Constitution and Civil Justice.

Whether at the state or federal level, something does need to be done. “It’s pretty clear that the current system doesn’t work for the patients or the doctors,” says Kachalia.

Any new system, he says, has to  compensate patients and take pressure off physicians, whose concerns about being sued are more psychological, emotional and professional than financial.  

Black puts it this way: “Let’s replace medical malpractice with something better, not with something less.”