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Threat of Malpractice Liability and Access to Care Dean M. Harris, J.D. Department of Health Policy and Management UNC Gillings School of Global Public.

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Presentation on theme: "Threat of Malpractice Liability and Access to Care Dean M. Harris, J.D. Department of Health Policy and Management UNC Gillings School of Global Public."— Presentation transcript:

1 Threat of Malpractice Liability and Access to Care Dean M. Harris, J.D. Department of Health Policy and Management UNC Gillings School of Global Public Health University of North Carolina at Chapel Hill March 11, 2013 1

2 Outline of this presentation I.Introduction about the system of malpractice liability II.How does the threat of malpractice liability interfere with access to care? III.How can we change the law of malpractice to promote access to care? IV.Conclusions 2

3 I.Introduction about the system of malpractice liability 3

4 The law of medical malpractice has two separate goals 1.Compensation (providing monetary damages to injured patients or their families); and 2.Deterrence (improving the quality of care by getting rid of bad doctors and causing other doctors to be very careful).

5 But, the malpractice system does not provide fair compensation It is like a lottery, in which a few people get a lot of money, but most injured people get nothing. Also, injured patients who have low income or no income will receive much less compensation. A significant percentage of the judgment or settlement must be paid to the patient’s lawyer (such as 35 to 40% in the USA). Other expenses will raise the total cost of malpractice litigation to 50% in the USA, 44% in Australia, and 50 to 66% in the United Kingdom. 5

6 Two scholars described the unfair malpractice system in Australia “[T]he tort system remains a slow, costly, inefficient, stressful and often inequitable and unpredictable means of assisting people harmed through medical care. Cases can take years to be settled or decided. Duelling expert witnesses are trotted out. Many people are denied early access to appropriate care and rehabilitation because of delays. Litigation costs … sharply decrease the real value of the settlement.” Weisbrot and Breen (2012), at 296. 6

7 In the malpractice system, many patients do not sue their providers The Harvard Medical Practice Study reviewed records of hospital patients in New York State. Out of 30,775 patients; 1,133 suffered an adverse event; of which 280 were caused by negligence; but only 8 patients filed a claim. Therefore, only about 2% or 3% of patients who are injured as a result of negligence file a claim. Most patients who are injured by negligence are not compensated by the malpractice system. 7

8 “Underclaiming” is a more serious problem than “overclaiming” According to one analysis, about two-thirds of all claims in the USA had a good basis in fact, because the patient was harmed by an error. Moreover, the process of litigation does a good job in distinguishing valid from invalid claims. Therefore, “underclaiming” (too few claims by patients who are injured by negligence) is a more serious problem than “overclaiming” (too many claims by patients who were not really injured by negligence.) 8

9 Also, the malpractice system does not meet the goal of deterrence There is no persuasive evidence that the fault- based system actually deters negligent conduct. As stated by Mello, et al (2010), “[r]eliable evidence about the deterrent effect of the tort system does not exist.” (p. 1570). The Harvard Medical Practice Study (as discussed previously) proves that most of the doctors who injured patients by their negligence are not identified or held accountable by the system of medical malpractice. 9

10 The malpractice system also causes other problems The malpractice system increases health care costs (for individuals and for society). The malpractice system interferes with access to care (and thereby harms the public health). The malpractice system creates an adversary situation between doctors and patients (and interferes with the level of trust in the doctor- patient relationship.) 10

11 II. How does the threat of malpractice liability interfere with access to care? 11

12 The threat of malpractice liability interferes with access in several ways A.The threat of liability causes doctors to practice “defensive medicine.” B.The threat of liability causes some doctors to avoid certain specialties, regions, and patients. C.The threat of liability reduces the level of trust in the doctor-patient relationship. 12

13 A. The threat of liability causes doctors to practice “defensive medicine.” “Defensive medicine” means that doctors order tests or treatments which patients do not really need (in order to protect the doctors from potential liability for malpractice.) Defensive medicine raises health care costs for individuals (and for the society as a whole). Higher costs can make it more difficult for people to afford medical care and health insurance (and wastes the health care resources of society). Therefore, cost is an issue of access to care. 13

14 Data about costs of the malpractice system and defensive medicine Mello and colleagues (2010) estimated that the annual cost of the USA’s medical liability system is $55.6 billion, in 2008 dollars. That is about 2.4% of health care spending in the USA, and it includes: –Indemnity payments of $5.72 billion –Administrative expenses of $4.13 billion –Defensive medicine costs of $45.6 billion In Japan, damage awards in malpractice cases may be as high (or higher) than in the USA. 14

15 B. The threat of liability causes doctors to avoid specialties, regions, and patients According to the U.S. General Accounting Office (GAO) in 2003, “Actions taken by health care providers in response to malpractice pressures have contributed to localized health care access problems in the five states we reviewed with reported problems. We confirmed instances in the five states where actions taken by physicians in response to malpractice pressures have reduced access to services affecting emergency surgery and newborn deliveries.” http://www.gao.gov/new.items/d03836.pdf at 5 (footnote omitted) http://www.gao.gov/new.items/d03836.pdf 15

16 How do these problems affect patients as a practical matter? “The only hospital in a rural county in Pennsylvania no longer has full orthopedic on- call surgery coverage in its emergency room (ER) because three of its five orthopedic surgeons left …, largely in response to the high cost of malpractice insurance…. Pregnant women in rural central Mississippi must now travel about 65 miles … to deliver because family practitioners at the local hospital, faced with rising malpractice insurance premiums, stopped providing obstetrics services.” (Id.) 16

17 Which specialties, regions, and patients do some doctors avoid? The specialties which are most likely to result in malpractice claims include OB/GYN, surgery, and emergency medicine. Some medical students might decide to avoid those specialties (because of the liability risk). Some doctors have left those US states which have a higher malpractice risk than other states. The risk of malpractice claims might discourage some doctors from treating high risk patients (such as OB patients who are young and poor.) 17

18 In Japan, the threat of criminal liability resulted in denial of emergency care When criminal prosecutions increased, some doctors refused to accept high-risk patients (even in ERs). “Because of this and other similar cases, medical providers are adopting defensive medical practices. Physicians are turning away high-risk patients from emergency departments. In thousands of cases per year, patients in ambulance transport are turned away from more than 11 hospitals before being accepted. The most frequent reason cited for refusal is not lack of physicians but ‘difficulty of treatment’ according to data….” Starkey & Maeda (2010), 4 (footnotes omitted). 18

19 Thus, the threat of malpractice causes two defensive responses Many doctors protect themselves by ordering tests or treatments which patients do not really need. [This is the classic definition of “defensive medicine.”] Also, some doctors protect themselves by not treating patients in particular specialties, geographic areas, and risk categories. [Maybe we could call this “defensive lack of medicine.”] Both of those responses reduce access to care. 19

20 C. The threat of liability reduces the level of trust in the doctor-patient relationship Access to care of good quality requires a high level of trust and open communication. But, the threat of malpractice liability creates an adversary relationship between doctor and patient (and reduces the level of trust.) In addition to treating their patients, doctors also have to spend their time and attention on protecting themselves from potential lawsuits. Doctors spend a lot of time informing patients about the risks and “managing expectations.” 20

21 Doctors can be sued for failing to disclose the applicable risks Under the doctrine of “informed consent,” doctors can be held legally liable (in a malpractice case) for failing to properly inform patients about the risks of a test or treatment. Doctors need to spend a lot of their time with patients trying to explain the relevant risks. Often, patients do not understand or remember what their doctor told them about the risks. So, doctors follow a routine practice for disclosure (and make records of discussions) 21

22 Also, doctors have to “manage expectations” of patients and families Doctors try to give their patients confidence and hope about the possibility of recovery. Confidence and hope can be important for a patient’s recovery (rather than just “giving up”). Doctors also want to be kind to their patients. But, doctors also need to manage expectations of patients and family members, so that they are not surprised or angry if there is a bad outcome (and so that they will be less likely to sue). 22

23 III. How can we change the law of malpractice to promote access to care? 23

24 How can we change the law to promote access to care? A.What type of legal reform has worked well in the past? B.“Small-scale” (limited) reforms of the malpractice system will not work to reduce defensive medicine. C.A “no-fault” compensation system would be most effective in solving these problems and promoting access to care. 24

25 A. What type of legal reform has worked well in the past? In the past, doctors were afraid to stop and help people injured in car accidents (because they were afraid of being sued for a bad result). Therefore, state governments in the U.S. changed the laws to provide that doctors could not be sued for negligence if they voluntarily stopped and helped victims of accidents. These laws are called “Good Samaritan laws.” These laws do not require doctors to help, but provide legal “immunity” if they do provide help. 25

26 “Good Samaritan laws” have been successful in changing behavior Now, doctors in the U.S. are more likely to stop and provide help to people who are injured in car accidents. Therefore, “Good Samaritan laws” have worked to change the behavior of doctors. This proves that changing the law of malpractice can be effective in promoting access to care. We can use law as a “tool” to accomplish our goals of public health, including access to care. 26

27 B. “Small-scale” reforms will not reduce defensive medicine Examples of “small-scale” reforms include: –putting a “cap” (a maximum limit) on damages; –reducing the statute of limitations to file a claim; –eliminating joint-and-several liability; and –changing the “collateral source” rule. But, none of those small-scale reforms would solve the problems of the malpractice system. And, none of those reforms would significantly reduce the practice of defensive medicine. 27

28 Limiting the recovery of damages would not reduce healthcare costs Limiting the amount of damages (or the frequency of damages) can be effective in reducing the cost of premiums for doctors’ malpractice liability insurance. However, those liability insurance premiums are only a small part of overall health care costs. The more important issues are: (1) whether that “small-scale” reform would significantly reduce defensive medicine; and (2) whether that would save significant costs for the health system. 28

29 Imagine this hypothetical scenario in which you are a doctor in the USA You know that you can be sued by patients for their economic damages (such as lost wages and medical expenses), as well as for non- economic damages (for pain and suffering). Also, a lawsuit against you will take a lot of your time, and will harm your professional reputation. Now, imagine a new malpractice law limits the amount of damages for which you can be sued. Question: In light of this new law, how much less defensive medicine will you practice? 29

30 “ Small-scale” reforms do not significantly reduce cost or improve patient safety Mello and colleagues (2010) recognized that the usual proposals for tort reform would reduce only some defensive medicine. The U.S. Congressional Budget Office (CBO) concluded that usual malpractice reforms would reduce U.S. health care spending by only 0.5%. Studdert et al (2004) wrote that conventional proposals for malpractice reform (decreasing the number of claims and amount of damages) will not promote patient safety. 30

31 “ Small-scale” reforms would not increase disclosure of errors Many doctors argue that they would be willing to disclose their medical errors if the threat of legal liability would be reduced. But, conventional reforms (such as caps on damages) would not increase disclosure. In Canada, doctors are no more likely to disclose their errors (despite a malpractice system that is more favorable to doctors than the U.S. system). Gallagher, et al (2006) concluded that the culture of medicine limits disclosure of errors. 31

32 C. A no-fault compensation system would solve many of these problems A no-fault system is more fair (because it compensates more injured patients). A no-fault system is more efficient (because it handles disputes in less time and at lower cost). A no-fault system is less antagonistic (because the patient does not need to prove negligence). A no-fault system has the potential to improve patient safety and quality of care (because more data will be collected, and because no-fault could help to change the culture of medicine). 32

33 A no-fault system is similar to the compensation for injured workers In the past, it was difficult for injured workers to receive compensation in a fault-based system of legal liability. Therefore, governments adopted systems of administrative compensation for workers, without the need to prove fault. Instead of suing in court for unlimited damages, workers (or their survivors) are assured of receiving some compensation. 33

34 Several countries have adopted no- fault systems for medical injuries Scandinavian countries (Sweden, Denmark, Norway, and Finland) France New Zealand Other countries (such as Japan and the U.S. states of Florida and Virginia) have adopted partial no-fault systems for birth- related injuries. 34

35 New Zealand’s system of no-fault compensation for medical injuries Patients receive fixed compensation from the Accident Compensation Corporation, if they were harmed as a result of a “treatment injury.” It is not necessary for patients to prove negligence (or other fault) by the provider. But, it is necessary to prove causation (that the patient was injured while receiving treatment). The program is funded by taxes. Patients may not sue providers for damages. 35

36 Some people have raised concerns about the potential cost of no-fault However, data and experience demonstrate that the cost of no-fault is reasonable and not excessive. According to Studdert and Brennan (2001), at 220, “[o]ur estimates show that many more injured patients may be compensated under no-fault than tort within budgets that are similar to or less than the costs of the current system.” According to Weisbrot and Breen (2012) at 298, “[u]ndoubtedly, there will be a good deal of scaremongering over costs and about the possibility of encouraging increased numbers of claims, although this has not been the case elsewhere.” 36

37 Some people have raised concerns about no-fault’s lack of deterrence As previously discussed, there is no persuasive evidence that the fault-based system actually deters negligent conduct. Moreover, no-fault can be combined with other mechanisms to increase accountability (such as government agencies with responsibility for handling complaints and referring appropriate cases to professional disciplinary bodies.) 37

38 No-fault systems can improve patient safety and quality of care Wallis and Dovey (2001) found that expanded eligibility for no-fault compensation in New Zealand has increased the number of claims (and thereby made it possible to collect more data for research on ways to improve patient safety). Research by Davis, et al (2003) on medical records found that professionals in New Zealand were often willing to acknowledge in writing when a patient had suffered a medical injury. 38

39 No–fault systems have strong support in different countries According to Bismark and Paterson (2006) at 282, “[a]lthough the New Zealand system has not delivered a perfect solution to the problem of medical injury, it remains popular, and there is no enthusiasm among the public or health care providers for a return to tort law as an alternative.” Australia’s Productivity Commission supported establishing a no-fault system for all catastrophic injuries (including catastrophic medical injuries). 39

40 Professor William C. Hsiao recommended no-fault for Vermont Professor Hsiao recommended that the U.S. State of Vermont should adopt no-fault. According to Professor Hsiao, “[e]vidence indicates that moving to a no-fault system would achieve the malpractice system's goals both more effectively and equitably. It would furthermore achieve these goals more quickly and with lower administrative costs, all while eliminating malpractice premium variability.” (63) 40

41 VII. Conclusions 41

42 Conclusions The malpractice system reduces access to care by raising costs (defensive medicine), causing doctors to avoid some specialties and regions, and harming the doctor-patient relationship. Legal reforms can change the behavior of doctors (such as “Good Samaritan laws”). Small-scale (limited) reforms will not significantly reduce defensive medicine and increase access. No-fault would be most effective in solving these problems and promoting access to care. 42

43 Conclusions (continued) In public health, we often need to accomplish more than one goal at the same time. These multiple goals can be in conflict. For example, we want to increase access. But, we still want injured patients to be compensated and negligence to be reduced (which are the goals of the malpractice system). Thus, we need to find a legal reform (such as no-fault) that can increase access while still meeting the goals of compensation and safety. 43

44 References Bismark, M and R Paterson, “No-Fault Compensation in New Zealand: Harmonizing Injury Compensation, Provider Accountability, And Patient Safety,” Health Affairs, (2006) 25(1):278-283. Davis, P, et al, “Acknowledgement of ‘no fault’ medical injury: review of patients' hospital records in New Zealand,” BMJ, (2003) 326:79– 80. Gallagher, T, et al, "U.S. and Canadian Physicians' Attitudes and Experiences Regarding Disclosing Errors to Patients," Archives of Internal Medicine, (2006) 166: 1605-1611. Harris, D, Contemporary Issues in Healthcare Law and Ethics, 3rd edition. (Health Administration Press, 2008). Hsiao, W, “Act 128: Health System Reform Design: Achieving Affordable Universal Health Care in Vermont,” (2011). 44

45 References (continued) Leflar, R, “The Law of Medical Misadventure in Japan,” Chicago- Kent Law Review, (2012) 87(1):79-110. Leflar, R, “‘Unnatural Deaths,’ Criminal Sanctions, and Medical Quality Improvement in Japan,” Yale Journal of Health Policy, Law, and Ethics, (2009) IX(1):1-51. Lin, P, “Criminal judgments to medical malpractice in Taiwan,” Legal Medicine, (2009) 11:S376–S378. Localio, A, et al, “Relation between Malpractice Claims and Adverse Events Due to Negligence,” New England Journal of Medicine, (1991) 325(4):245-251. Mello, M, et al, “National Costs of the Medical Liability System,” Health Affairs, (2010) 29(9):1569-1577. 45

46 References (continued) Starkey, L and S Maeda, “Doctor as criminal: reporting of patient deaths to the police and criminal prosecution of healthcare providers in Japan,” BMC Health Services Research, (2010) 10:53. Studdert, D and T Brennan, “No-Fault Compensation for Medical Injuries: The Prospect for Error Prevention,” JAMA, (2001) 286(2):217-223. Studdert, D, et al, “Medical Malpractice,” New England Journal of Medicine, (2004) 350(3):283-292. Todd, S, “Symposium on Medical Malpractice and Compensation in Global Perspective: Part I: Treatment Injury in New Zealand,” Chicago-Kent Law Review, (2011) 86:1169-1216. United States General Accounting Office (GAO), “Medical Malpractice: Implications of Rising Premiums on Access to Health Care,” GAO-03-836 (August 2003). 46

47 References (continued) Wallis, K and S Dovey, “No-fault compensation for treatment injury in New Zealand: identifying threats to patient safety in primary care,” BMJ Quality & Safety, (2011) 20:587-591. Weisbrot, D and K Breen, “A no-fault compensation system for medical injury is long overdue,” Medical Journal of Australia, (2012) 197(5):296–298. 47


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