Is federal medical liability reform possible?

Over the past few years, progress has clearly been made with regard to the professional liability crisis. Between 2002 and 2013 the rate of paid claims per 1000 physicians fell from 18.6 to 9.9, an average decrease of 6.3% per year.¹ Moreover, since 2007 median indemnity amounts paid have fallen and high-end awards have plateaued. Overall professional liability insurance rates have stabilized. This salutary state primarily reflects the improving economy and stock market valuations coupled with modest state-based reforms, but implementation of a wide range of patient safety programs has likely also had an impact. The Agency for Healthcare Research and Quality (AHRQ) Patient Safety and Medical Liability Demonstration Program has suggested such a linkage, particularly in obstetrical claims.² Pettker and associates compared obstetrical liability claims at a single tertiary-care teaching hospital during 2 5-year periods (1998 to 2002 and 2003 to 2007), before and after implementing a rigorous patient safety program.³ Despite a stable statewide malpractice insurance market, this patient safety initiative resulted in a decline in median annual claims (1.31 to 0.64; P = 0.02), median annual payments per 1000 deliveries ($1,141,638 to $63,470; P < 0.01) and the median payout per case ($632,262 vs $216,815; P < 0.05).

Ob/gyns still feeling the pain

While these overall trends are reassuring, for ob/gyns professional liability insurance premiums costs continue to climb, albeit more modestly than a decade ago.¹ But even more concerning, our medical liability crisis continues to contribute to burnout and adverse practice patterns. The 2015 American Congress of Obstetricians and Gynecologists (ACOG) Survey on Professional Liability noted multiple disturbing trends.⁴ Of the survey’s nearly 4300 respondents, 23.8% reported that fear of malpractice litigation had forced them to reduce numbers of high-risk obstetrical patients; 17.0% posited that it had increased their cesarean delivery rate; 13.6% had stopped offering trials of labor for vaginal birth after cesarean (VBAC); and 5.1% had stopped their obstetrics practice altogether. An astonishing 73.6% of ob/gyn respondents (average age 51.4 years) had experienced at least 1 liability claim during their career and the group averaged 2.59 claims per physician. Since the last ACOG liability climate survey in 2012, 40.5% had experienced 1 or more claims, two-thirds being obstetrical in origin, most often for neurological injury.

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While survey data can be subject to selection bias, there is strong empirical evidence that intimidation caused by the potential for malpractice litigation increases cesarean delivery and lowers VBAC rates. Yang and colleagues examined US National Center for Health Statistics birth certificate data from 1991 to 2003 to correlate cesarean delivery and VBAC rates with malpractice pressure as measured by liability insurance premium costs and presence or absence of state-based tort reform.⁵ They observed that malpractice premiums were positively associated with primary cesarean delivery rates (beta = 0.16, P = 0.009), and negatively associated with VBAC rates (beta = -0.35, P = 0.01). They calculated that for every $10,000 decrease in premiums there would be a 1.45% increase in the VBAC rate and a 1.18% decrease in primary cesarean delivery rates. In addition, they observed that VBAC rates were significantly higher and primary cesarean delivery rates were significantly lower after individual states placed caps on noneconomic damages, with the greatest effects seen when caps were set at $250,000 or less.

Limits of state-based reforms

Driven by cost concerns and pressure from organized medicine, and commensurate with Republicans gaining control of the majority of state legislatures and governorships, a growing number of states have implemented tort reform including such caps on non-economic damage. For example, Iowa’s Governor Terry Branstad recently signed a law mandating certificates of merit, strengthening expert witness standards, and capping non-economic damages at $250,000.⁶ Indeed, 35 states have now implemented some form of cap on non-economic damages.

These wins at the state level, however, can be ephemeral as recently demonstrated in my home state of Florida. There, the Supreme Court recently ruled unconstitutional a law limiting non-economic damages in medical malpractice cases.⁷ Sadly this law, passed in 2003 while Jeb Bush was governor, had greatly helped stabilized what was one of the severest professional liability insurance crises in the nation. Ironically, it was the law’s very success that led to the judges’ decision. The majority opinion read in part, “We further conclude that because there is no evidence of a continuing medical malpractice insurance crisis justifying the arbitrary and invidious discrimination between medical malpractice victims, there is no rational relationship between the personal injury noneconomic damage caps … and alleviating this purported crisis.”⁷

The limits of state based-reforms, ascendency of the GOP over all 3 branches of the federal government and the pressing need to contain costs in the Republican healthcare reform plan have all led to renewed hopes for a federal solution to our long twilight struggle against a patently unjust, inequitable, and fundamentally flawed tort system.

NEXT: Renewed federal efforts at liability reform

Renewed federal efforts at liability reform

Many ob/gyns in particular and physicians in general have justifiable concerns about the potential for reduced access to care, contraction of Medicaid eligibility and decreased support for maternal, child, and reproductive healthcare accompanying the US House of Representatives American Health Care Act (AHCA). Yet the focus of the AHCA on the economic sustainability of our healthcare enterprise is much needed and long overdue and helps make the case for federal medical liability reform.

As I have written in this column on what seems like countless occasions, US public and private expenditures for healthcare are wholly unsustainable. There are many reasons for our excessive medical costs including overutilization of technology, underutilization of primary care, aging and overweight populations, unrestrained medication costs, and bloated administrative expenses fed by burdensome regulations and reciprocal “gaming” of medical bills by both providers and payors. Moreover, defensive medicine adds at least $55 billion to our collective healthcare bill and perhaps much more; thus, it is a prime target for reform.⁸

Led by Health and Human Services Secretary and orthopedic surgeon Dr Tom Price (R-GA), tort reform has suddenly become the focus of multiple House bills.⁹

The major aims of these bills are:

1. Creation of “safe harbors” for physicians who adhere to accepted practice guidelines. Any malpractice claim would be adjudicated by a panel of medical experts if the defendant claimed care fell within such an established pathway;

2. Establishment of administrative health “tribunals” presided over by judges with requisite expertise. Plaintiffs would be required to prove a physician’s behavior was reckless to receive payment;

3. A $250,000 cap on non-economic damages; and

4. A host of other provisions long favored by organized medicine (eg, joint-and-several liability reform, reduced statutes of limitations, limits on attorney fees, periodic payments, and exposure of a plaintiff’s collateral sources of coverage, such as health insurance).

To be fair, there is a limited “evidentiary base” and in some cases no evidence in support of several of these reforms (eg, limiting attorney fees, and collateral source rules).⁹ There are simply no data on the potential benefits of safe harbors, and many claims may be for care not covered by current, established guidelines. However, as evidence-based guidelines proliferate, such an approach has enormous potential for better care, lower costs, and greater fairness. Moreover, as noted above, there is strong evidence for the benefits of tight caps on non-economic damage⁹ such as the “Protecting Access to Care Act” which was recently passed by the House 218-210.

Thus, we should strongly support bills containing these provisions.

Take-home message

For the first time in a long time there is at least the potential for truly meaningful medical liability reform from Washington. Unfortunately, there are many hurdles to be overcome, not the least of which is the expected deluge in trial lawyer lobby money targeting bills containing any limits on recovery or attorneys’ fees. In addition, beyond the rancor, partisanship and general ill will that exist between the major political parties, there are also serious policy conflicts emerging between the 2 Houses of Congress and within the GOP itself, which has experienced an unprecedented degree of internal division over healthcare policy-all of which could stymie medical liability and patient safety reform efforts. So, while such federal reform is possible it is not probable, and while we wait, let’s all redouble our efforts to ensure that all our patients are safe.

References

1. Mello MM , Studdert DM , Kachalia A. The medical liability climate and prospects for reform. JAMA. 2014 Nov 26;312(20):2146-55.

2. Ridgely MS, Greenberg MD , Pillen MB , Bell J. Progress at the Intersection of Patient Safety and Medical Liability: Insights from the AHRQ Patient Safety and Medical Liability Demonstration Program. Health Serv Res. 2016 Dec;51 Suppl 3:2414-2430.

3. Pettker CM , Thung SF, Lipkind HS, et al. A comprehensive obstetric patient safety program reduces liability claims and payments. Am J Obstet Gynecol. 2014 Oct;211(4):319-25.

4. Carpentieri AM, Lumalcuri JJ, Shaw J, Joseph GF. Overview of the 2015 American Congress of Obstetricians and Gynecologists’ Survey on Professional Liability. Available at https://www.acog.org/-/media/Departments/ProfessionalLiability/2015PLSurveyNationalSummary11315.pdf?dmc=1&ts=20170617T1957092419 Accessed 6/17/2017.

5. Yang YT, Mello MM, Subramanian SV, Studdert DM. Relationship between malpractice litigation pressure and rates of cesarean section and vaginal birth after cesarean section. Med Care. 2009 Feb;47(2):234-42.

6. Marciano KR. Iowa governor signs medical malpractice reform into law. Available at http://marcianolegal.com/iowa-medical-malpractice-reform-law Accessed 6/17/2017.

7. Saunders J. Malpractice damage caps struck down by Florida Supreme Court. Available at http://www.orlandosentinel.com/news/politics/political-pulse/os-malpracticedamages-20170608-story.html Accessed 6/17/2017.

8. Mello MM , Chandra A, Gawande AA , Studdert DM . National costs of the medical liability system. Health Aff (Millwood). 2010 Sep;29(9):1569-77.

9. Mello MM, Kachalia A, Studdert DM. Medical liability: Prospects for federal reform. N Engl J Med. 2017 May 11;376(19):1806-1808.