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Malpractice Research
This section includes:
1. 1992 PPRC Annual Report to Congress - chapter on medical
malpractice research.
2. Chapter by Budetti on medical malpractice research.
�CHAPTER 7
MEDICAL MALPRACTICE REFORM
In the Omnibus Budget Reconciliation Act of 1990, the Congress directed the Commission to
make recommendations regarding medical malpractice reform. The Commission described
the goals of the malpractice system and how well they were being met in its Annual Report to
Congress 1991 (PPRC 1991). This year, the Commission offers recommendations that may
help pave the way for the malpractice system to realize its goals.
The federal government's interest in malpractice reform derives from the. overall aims of
health care reform: to limit costs while improving quality and access. An important federal
interest is to ensure that Medicare, Medicaid, and the health care system as a whole deliver
high-quality care. In theory, the malpractice system should provide a strong external
incentive to deliver such care. But in practice, it is difficult to demonstrate the marginal
beik-!";: of the system in deterring negligent medical injury. The rates of avoidable injury —
particularly among Medicare patients — suggest there is room for considerable improvement.
care. The malpractice system affects costs in several wayi It may impose on the health care
s\sicm A single standard ol care that is not cost-ett'ective. In addition, many believe that the
current system leads to the practice of so-called defensive medicine, resulting in the
widespread delivery of services that are not otherwise indicated The malpractice system can
help or hinder efforts to decrease the amount of unnecessary or unduly expensive care,
depending on whether it sanctions the delivery of unneeded care or makes it risky for
;
vis to deliver cost-effective care. Both malpractice insurance premiums and treatment
for avoidable injuries contribute to health care costs.
:
Another federal concern is access to care. The malpractice system can affect access if
malpractice insurance is too costly in relation to payments for services, if insurance is
unavailable, or if providers decline to deliver high-risk services — or >er\ ices to high-risk
patients — for fear of being sued (Pear 1991).
1
Although much is not known about medical malpractice, it is increasingly recognized that the
performance of today's malpractice system compromises these key federal interests. The
problems plaguing the system are sufficiently complex and intractable that piecemeal or
1
This clKipici tide.-, um di;il cliiwih wiih issues of access to care, although [he Commissioifs roi'niiimeiid.ilioiis
may affect ;icce<s hy modcruiins: malpraciice premiums somewhat.
�limited reforms are unlikely to have a major impact. The Commission has therefore
formulaied recommendations for Iederal actions to improve the malpractice system.
This chapter sets out a conception of a future malpractice system that would represent a great
advance over the current one. This system cannot be implemented immediately, because
much developmental work is needed to ensure both its feasibility and affordability. The
Cv,.
•
j, iccominendaUuiia focus on wps that should be taken now
piv;:..;c for the
future adoption of a system similar to that envisioned here. In addition, the recommendations
include interim measures to improve the functioning of the current system. The chapter
concludes by discussing the relationship of malpractice reform to cost containment.
RECOMMENDATIONS
The federal government should ensure that practitioners, hospitals, and health
care organizations engage in effective efforts to reduce injuries related to
inpatient and outpatient medical care, including those due to negligence. These
efforts should be assisted by federally sponsored initiatives and additional funds
for research.
The Congress should authorize, fund, and facilitate tl.v development and
assessment of demonstrations of administrative or other systems for compensating
patients for injuries due to medical negligence. The demonstrations should assess
features that could be used in a future compensation system to promote fast,
The Congress should support the development and testing of alternative
standards for determining compensability. Demonstrations of alternative
systems for compensation should include and assess the use of alternative
standards when possible.
As part of a package with other reforms, the Congress should effect the
widespread adoption of certain tort reforms, including:
•
reasonable limits or schedules for noneconomic damages and attorneys'
contingency fees,
•
thresholds for joint and several liability,
•
offset of awards for collateral source payments,
fs.;
V.'!'-.i
periodic payment of large awards,
184
�•
reduction to a reasonable period of long statutes of limitations for
minors, and
•
encouragement of early assessment of claims and use of alternative
dispute resolution methods.
The Agency for Health Care Policy and Research (AHCPR) should sponsor
studies of the effects on patients of malpractice reforms and demonstrations.
Funds for malpractice research should be identified separately in AHCPR's
budget.
THE TASK FOR REFORM
The Commission described the goals and problems of the malpractice system in depth in its
Annual Report to Congress 1991 (PPRC 1991). The reduction of the rate of medical injury is
the most important goal of the malpractice system. Although medical care in the United
C...:. :..
V.j .T high quality, the incidence of preventable medical injury should be
lowered. A second goal of the malpractice system is fo compensate patients fairly who
experience a medical injury. Too few patients are being compensated today, and the awards
are variable. Further, much attention is focused on the unknown but possibly high cost of
defensive medicine Finnllv. the svstem is inefficic ' rrsiiltinr. j hich administrative costs
and long delays in resolving claims. These problems, then, are the challenge of reform
efforts. Malpractice reform must be informed by an understanding of their underlying causes.
n
n
The ability of the current system to reduce the number of injuries is limited by its failure to
collect and analyze systematically data with which to design and implement measures to
prevent medical injuries. At present, most injuries do not result in claims, and databases are
largely fragmented. Knowledge about the causes and prevention of medical injury is scarce.
In addition, incentives for providers (including health care workers, hospitals, clinics, and
other health care organizations; to participate in formal injury reduction efforts are not as
effective as they should be.
Compensation is not consistent, timely, or proportionate to losses. Nor is it available to all who
may qualify. The accuracy of determinations of liability is impaired by the difficulty of applying
the negli•• Mice stand: 'o individual cases Awards for noneconomic damages, in particular, are
mum^ .suujc^inc ano \aiiublc. Lcnguiy delays are characteristic of today's legal process.
1
Cost-effective care may be deterred to the extent that the malpractice system requires the
delivery of more expensive care than would be desired by those ultimately bearing its costs.
The legal »
.id of care results from ad hoc decisions of juries, the retrospective opiinons
185
�ol expert wmiesses. and professional practices thai may be influenced by incentives thai
increase the delivery of services. Paradoxically, the piaciKo of the health care system may
also be driven b> us perceptions of possible legal liability.
It :
Defensive medicine represents unnecessary or inefficient care delivered to reduce the risk of
liability. Its extent and cost are unknown but may be substantial. Several factors may
contribute to defensive medicine. The negligence standard does not provide a good
|jru.spc w\c guide to uecisionmaking. Furthermore, the application of the standard to
individual cases by physicians is unreliable (Brennan et al. 1989) and biased by knowledge of
the outcome of care (Caplan et al. 1991). In addition, physicians probably apply the standard
differently than do juries. Judgments of liability that are inconsistent across similar cases,
made by lay juries meeting one time, may also contribute to defensive medicine. The medical
profession's lack of agreement about what care is effective, as well as misperceptions of
physicians about the legal standard of care, may also be contributors.
The high administrative costs of the current malpractice system are due to the formal
processes for discovery of infonnation, preparation for and conduct of the trial itself, and the
use of expert witnesses. These reflect the need for extensive information and understanding
that is associated with an inquiry into individual fault. High procedural costs are barriers lo
filing claims for many potentially compensable injuries, particularly those that are less
serious or that entail relatively minor economic losses.
TOWARD A MALPRACTICE SYSTEM OF THE FUTURE
id
i I
>
Solving the problems plaguing today's malpractice system will require a new approach to
preventing injur)' and compensating patients. A possible future system that would address the
underlying causes of the present system's malfunctioning would have two components. One
would be a fast, efficient administrative compensation mechanism that would provide
adequate insurance to patients who experience preventable medical injuries. The other would
be a parallel structure for monitoring, quality review, and design and implementation of
measures to reduce the rate of injury. The key feature of the proposed system is the separation
of decisions about compensation and quality of care. Decisions related to each of these areas
would be accomplished by a structure and process designed specifically for that purpose.
Clear criteria for compensability and for damages awards would be established, whereas
judgments about quality of care in individual cases would be made in forums better suited to
that function.
2
2
The two parts of this s>sieni could be separaied in structure as well as function, or they could be housed wiihin a
single administrative agency.
186
�The administrative compensation system would provide access for as many compensable
claims as qualify, yet place limits on compensation to keep the system uifordable. Enhanced
access would be achieved by lowering economic and other barriers to filing claims, ensuring
legal representation, and helping patients to realize when they have experienced a potentially
compensable injury. Injuries would also be detected by data-based surveillance and by
encouraging or requiring the cooperation of providers in identifying and reporting potential
claims. Nonmeritorious claims would be screened out early, and the overall process would be
expedited and efficient. It is possible that an even simpler, less formal process could be
instituted for smaller claims.
Compensation would be based on a reliable standard for compensability, such as one
involving avoidability of the injury. Accelerated-Compensation Events (ACEs) (described
below) offer one possible way to identity prospectively injuries that are usually avoidable
with good care. This approach would largely retain a fault basis for compensation but
dispense with the need for case-by-case determinations of fault.
The injury prevention/quality improvement system would receive information from the
compensation system, its own surveillance mechanisms, and voluntary reporting. It would
collect and analyze data on injuries, thereby facilitating the design and implementation of
'"-.'"-nnn- nrr-miums would be experience rated, based on the claims
experience of the organization or system that would best be able to intervene to prevent
ini"'- ^ Ideally, this system would be part of a broader continuous quality improvement
process throughout the heallh care system. The system would have an appropriate balance of
public and professional input.
;
Considerable developmental work is necessary for this system to be realized. The system
may not tum out to be feasible as described; the discussion here attempts to anticipate, to the
extent possible, its structure and operations. The components can be developed in an
evolutionary manner and implemented independently. The following sections describe more
fully the building blocks that must be put into place. Among these are better systems to
prevent injury, an administrative process to award compensation, and a reliable standard for
determining compensability.
The Commission's recommendations identify what should be done now to facilitate the
developmeni of each component of the future malpractice system. It is worthwhile taking
each of these steps to improve the current system. The greatest potential for progress,
however, lies in implementing the recommendations in such a manner as to build toward the
new system outlined ahnve.
Prevention of Injuries
Qualitv of care is receiving great emphasis at this time. Continuous quality improvement
techniques are beine adopted by many health care organizations. The Joint Commission on
187
••ti"
�m
I
li
Accreditation of Healthcare Organizations is preparing new requirements and methods for
hospital quality improvement activities. Peer review now lakes place in hospitals and oih^,
.citings, and Peer Review Organizations evaluate the qualitv of care given to Medicare
patients. These and other activities are concerned in part with negligent medical injuries, but
the extent to which they effect reductions in the rate of such injuries is unknown. It is likely
that many quality improvement efforts are helpful, but the relatively high rate of negligent
injury that still exists sn.'.-,><K tlmt more should be done.
The threat of legal liability provides a general deterrence incentive for physicians to take due
care to avoid preventable injury. Although this threat clearly influences physician behavior, it
is not clear whether the resulting actions cause any marginal reduction in the rate of injury. In
part, this is because the legal system's general incentive for physicians not to be negligent
must be translated by individual physicians into the particular ways in which they try to avoid
injury. Isolated lapses in vigilance inevitably occur.
ijjj
P i
A systematic approach to injury prevention is likely to be more effective, by identifying and
taking specific actior,., :c reduce the risk of particular injuries. Risk management activities
withinhospitals have been shown to be associated with fewer malpractice claims (Morlock
and Malitz 1991). Since the general deterrence incentive already exists, specific measures
designed to prevent injuries are needed to reduce their rate of occurrence.
There are two aspects of effective injury reduction: colleciion and analysis o! data, and
design and implementation of effective interventions. Improvements in these processes
should decrease the number of avoidable injuries, independent of other malpractice reforms.
fr
i;
!i
Data Collection. Liuia usuuic 101 mjuiy icuu^uun ua.-. ^uiiic ,......c;p«'.!\ I
files of malpractice insurers. Only a small percentage of avoidable injuries is included in such
files (Harvard Medical Practice Study 1990); often, the information about each claim is
limited. There is also a substantial time lag for claims files to accumulate information, since
they depend on the legal process.
Better data clearly are needed to detect preventable injuries and determine their causes. One
approach that has been tried is generic screening based on hospital chart review. For example,
one screen might be a return trip to the operating room during the same hospital stay. This
technique is both expensive and not particularly useful, however (Sanazaro and Mills 1991).
Many charts must be reviewed in depth to discover a few preventable injuries, and many
injuries still go undetected.
i •
!
]
!;>
-!
I'i ' i
Information necessary to improve screens for preventable injuries is not contained in such
existing databases as hospital discharge records, claims files, or medical records. Uniform
databases need to be designed that, among other purposes, detect care that is likely to cause
injury. It is not yet clear what types of databases would be most useful. Information is needed
on processes of care (e.g., whether serum aminoglycoside levels were ordered after an
188
�aminoglycoside antibiotic was prescribed), outcomes of care (e.g., whether laboratory tests of
renal function revealed kidney damage after a patient received an aminoglycoside antibiotic),
and diagnoses (to detennine whether certain processes were necessary or outcomes were as
expected). Better systems are needed, for example, to detect injuries associated with drugs.
Data systems for surveillance need to be established for outpatient care, which is a growing
source of preventable injuries. Hospital and office data systems should be designed so that
they can be used for this kind of quality monitoring.
3
Despite its importance, however, data-based surveillance — no matter how well designed —
is not sufficient. The best information source concerning care-related problems is the
caregivers themselves. Early warning and reporting systems for medical injury have been
effective in identifying, soon after their occurrence, many of the injuries that result in claims
(Lindgren et al. 1991). It is likely that many of the preventable injuries reported by
physicians are not discoverable in the medical record simply by using standard screening
techniques. Confidential voluntary reporting of potentially preventable injuries to a hospital
or other responsible organization can be encouraged successfully (Brennan et al. 1992). It
seems clear that voluntary reporting of injuries, as well as participation in peer review and
injury prevention using those data, needs to be protected and encouraged by state and federal
law. Mandatory reporting may be less successful, although there is no experience base on
..
tr,
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/
Analysis of Data. Once collected, data on injuries must be analyzed to help design
imerventions. The basic epidemiology of medical injuries needs to be delineated. Methods
.1 ibe the etiology and nature of injuries are in their infancy. Coding systems need to be
developed to permit this mou abstract information to be enter;.! Ir.!;' computerized
databases. Because many events need to be collected and analyzed, locally developed
databases must be compatible to permit merging.
4
Design and Implementation of Interventions. After the epidemiology of preventable
medical injuries is described and the causes of injuries are understood, ways must be devised
to prevent such occurrences. These interventions can be either cognitive or procedural. Many
insurers, fur instance, believe that continuing medical education sessions on malpractice are
so effective thai they offer physicians who attend the classes discounts on premiums. Some
states and insurers have required physicians to participate in risk management seminars.
Clearly, the education of providers is important: cognitive interventions make sense
intuitively to address cognitive mistakes. However, errors that cause injury are often due to
isolated lapses that are difficult for individual health care workers to eliminate. In addition.
•' Aliliough a formal reponing system has been established for adverse drug reaciions. ihey remain underreported.
~ Relalivcly simple elassilleaiion scheinc.N have been useil in recent studies (Leape et al. 1991. Kr.ivitz et al. I'WI ).
189
�some injuries are caused by problems in health care delivery systems and procedures rather
than b) an individual caregiver's mistake.
Systems or process interventions are likely to be even more effeclive at preventing injuries
than education alone. One successful assessment and intervention program for claims-prone
physicians focuses on office organization and practices to reduce the rate of malpractice
claims (Frisch 1991). Administrative policies and medical practice guidelines can be
designed to minimize the risk of avoidable injury, and checks can be instituted to make sure
that policies are followed. Guidelines for intraoperative monitoring of blood oxygen
saturation, for instance, have reduced the number of hypoxic injuries during anesthesia
(Keenan and Boyan 1991).
Computer-based systems using reminders, flags, and che^' - '•'•we the potential to detect and
rectify errors before they result in injury. A pharmacy computer, for example, can detect
when one prescribed drug may be contraindicated because of a possible interactio;i with
another, because of the patient's diagnosis, or because the dosage is incorrect. An office
computer can generate reminders to patients and physicians about preventive services.
A more sophisticated system might use a practice guideline and a computer-transcribed realtime dictated medical record — a new technology — to prevent physicians from overlooking
a critical diagnosis because they simply do not think of it. For example, some myocardial
infarctions are missed in emergency departmenis because ihe paiiem presents only wiih a
nonspecific symptom, such as an upset stomach. A practice guideline for the emergency
department diagnosis and management of patients with indigestion might have a br..:' in its
algorithm to check high-risk patients for whether a myocardial infarction might be the cause
who are over a panicular age should be asked about risk factors for coronary artery disease. If
a certain number of risk factors are present, an electrocardiogram should be done to rule out a
myocardial infarction. The computer would scan the dictated physician note. For any patient
of the requisite age with indigestion as the chief complaint, and for whom no mention is
made of risk factors for heart disease, the computer would remind the physician to ask about
the risk factors and to do an EKG if indicated.
Incentives for Injury Reduction. Efforts to develop and implement interventions need to be
encouraged or required. Although physicians have a professional obligation to avoid causing
preventable injuries, and the legal system provides a parallel incentive, efforts to reduce the
rate of injuries do not appear to be adequate. There are several possibilities for strengthening
the incentive. Insurance premium discounts increase participation in risk management
programs, but mandatory participation is probably even more effective. Another strong
incentive to participate in efforts to prevent injury would be for injuries or claims to trigger
peer review.
190
�A final option for strengthening incentives is experience rating: adjusting malpractice
insurance premiums based on the insured's claims history. Individual physicians generally are
not sued often enough to enable experience rating to closely approximate the risk of the
practitioner's being sued in the future (Rolph 1991; Rolph et al. 1991). This is because being
sued once or twice, for example, could represent a "chance" distribution of isolated errors
rather than an underlying propensity of the physician to cause negligent medical injuries.
However, hospitals or appropriately sized groups of physicians are the subjects of sufficient
numbers of claims to overcome the problem of chance variation. Therefore, experience rating
could be done more accurately for them.
In the outpatient setting, it is not clear what is the best entity to detect injuries and design and
implement interventions. Chapters 9 and 10 discuss the possibility of developing local
structures to collect and profile data on practice patterns and to facilitate utilization review
and quality improvement. These structures could also serve as the locus for efTorts to prevent
injuries, since they could collect and analyze data and perform a convener role for the
development and implementation of interventions.
Enterprise Liability. A proposal called enterprise liability would make hospitals financially
responsible for all negligent injuries to inpatients, thereby relieving the medical staff of all
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prevention on an entity — the hospital — that can accomplish this better than individual
physicians acting alone. This arrangeiv .; already exists for hospitals owned and staffed by
one organization (such as a health maintenance organization (HMO) or a typical university or
countv hospitnM and for those that provide ("channel'*'
. ractice insurance to their
affiliated staff. Enterprise liability is also the end result of the trend in legal doctrine toward
holding hospitals responsible for inpatient care (Weiler 1991).
Whether the incentive afforded by enterprise liability would be sufficient to encourage the
level of effort needed to prevent injuries is unknown. External insurance would still, to some
extent, cushion the financial incentive felt by a hospital or organization. Individual physicians
would be deprived of the incentive derived from the need to purchase their own malpractice
insurance. No studies have been performed to compare the rate of injuries or even of injury
prevention activities between hospitals that assume full liability for their physicians and those
that do not. Nor are there studies comparing hospitals that fully self-insure with those that are
more insulated from financial losses by outside insurance. It is possible that certain injury
prevention activities need to be required rather than merely encouraged by particular
arrangements of incentives. In addition, there are practical difficulties in adjusting
malpractice insurance premiums and physician payment to implement enterprise liability.
Incompetent or Impaired Physicians. Most avoidable injuries are experienced by patients
of conscientious, competent providers. These injuries are typically caused by systems
problems or by isolated lapses in the delivery of care by individuals. In fact, the implication
191
�lhal such errors are due lo individual professional incompetence is a principal source of ihe
strength of providers' dislike for malpractice suits and disaffection with the National
I'luciiuoner Dala Bank. The types of interventions described above are designed to reduce ihe
numbers of such injuries.
At times, however, an impaired or otherwise incompetent practitioner causes a series of
injuries to patients. The present malpractice system does not ensure adequate surveillance for
these situations, whi.-'.-. iviuM he detected and corrected much «VMVM ti, the time period over
which a series of malpractice claims typically are filed and resolved. Slate licensing boards,
hospitals, and other entities responsible for ensuring that care is delivered by competent
praciitioners need to receive timely information from systems designed to detect medical
injuries. This would permit early intervention to protect the public from further injuries auu
to help the provider correct the cause of the incompetence, if possible.
Avoiding Defensive Medicine, ll is important that efforts to prevent injuries — as well as
medical care itself — be cost-effective. Even though there are too few programs in place to
reduce injuries, there is a danger that health care resources may be spent inefficiently to
reduce the risk of injuries, tor example, it would not be advisable for an electrocardiogram to
be performed on everyone who comes to an emergency department with indigestion. An
incentive to perform inefficient defensive medicine is created when providers bear the
financial and other burdens of avoidable injuries, while a third-party payer pays for the
services delivered to avoid injuries. Therefore, when praclicc guideli'
..re formulated for
the purpose of av oiding injuries, the input of payers as well as proviu^i s should be sought
(see Chapter 8). This cause of overallocation of resources to the prevention of injury can be
av erted if the party ai risk for compensating avoidable injuries also bears the cost of the
particular health services provide^, as is the case with a self-insured HMO.
1
5
The Role of the Federal Government. The federal government should ensure thai
practitioners, hospitals, and health care organizations engage in effective efforts to reduce
injuries due to inpatient and outpatient medical care, including those due to negligence.
These efforts should be assisted by federally sponsored initiatives and additional funds for
research. A high priority should be given to the development of databases to be used to detect
injuries and to support efforts to reduce their incidence.
The Departments of Health and Human Services and Veterans Affairs should mount and
evaluate initiatives to improve the reporting and detection of avoidable injuries, analysis of
data, and design and implementation of effective interventions. The Congress should provide
additional funds to AHCPR to support research on the etiology, classification, and prevention
5
Other causes of defensive medicine, such as judgments of liability that seem incorrect to physicians, would
remain.
192
�of medical injury; to promote the development of systems to detect medical injury early; and
to develop databases to collect information about medical injury that can be used to design
effective preventive measures.
Alternative Systems for Handling Malpractice Claims
Substantial improvement in the malpractice system can only occur outside the courtroom.
Administrative systems and other alternative dispute resolution (ADR) methods offer the
potential for improved decisionmaking, faster and more efficient claims processing, and
lower thresholds for entry to the system (resulting in increased access). Administrative
systems are also capable of using alternative standards for compensation (discussed in the
next section). These features are the necessary substrate for a dramatically improved
malpractice system.
A number of features of an administrative system are probably needed for it to function better
than the court system. The use of an experienced decisionmaker who decides many cases
would be a substantial improvement over a jury of lay persons. A jury meets only once, has
no personal experience to draw upon in deciding cases, has no access to descriptions of prior
similar cases, does not have to justify its decision, and is not accountable for its performance.
If decisions (including settlements) were written and accessible, they would likely be more
consistent and predictable. Disagreements among cases could be harmonized by an appeals
process, and the relevant standard would then be known prospectively by health care
providers. An administrative decisionmaker may be more likely to understand and honor the
recommendations of good practice guidelines and lo condone cost-effective care.
Guidelines for the level of compensation for economic and noneconomic losses would help
the system operate in an efficient and consistent manner. In particular, they would help
resolve cases of clear liability in which the only contested issue is the amount of damages.
Efficient and speedy processing would permit expansion of the number of claims included in
the system and would reduce the cost of legal counsel. The process of deciding claims could
he made simpler and faster, but often at the expense of the procedural safeguards current.,
built into the court system. For example, if more claims are to be given access to the system,
early identification of those without merit is essential to constrain administrative costs. In the
present court syslem. by contrast, claims can proceed to trial if they survive a motion for
summary judgment. Furthermore, claims that require extensive legal process to uncover their
merit may be excluded inappropriately. Nonetheless, the balance between efficiency and
procedural safeguards mulrl be struck more reasonably than is now the case with the court
N\stein. Melhwv. • need to be devciuped u> obtain accelerated disclosure and discovery ol"
information relevant to the claim.
193
�One ol" the judicial system's most important features is its perceived impartiality and the
degree of control accorded the parties over the litigalion process. This is especially important
to injured clnimanis. " 'io may feel less powerful than the provider they are suing. In
administrative or ADR systems, the decreased amount of formal procedural protection makes
the need for objectivity even more important.
6
Many of these considerations are reflected in existing proposals for administrative systems
in the American Medical Association/Specialty Society Medical Liability Project's proposal,
for example, claims would be reviewed initially by claims adjusters and ultimately decided
by administrative law judges. Staff attorneys would represent — without charge — patients
whose claims have apparent merit. Other features include a mechanism to screen out
unwarranted claims early, incentives for settlement, guidelines for calculating damages, and
procedural safeguards (Johnson et al. 1989).
7
The success of administrative systems depends critically on how they are implemented. The
participants in the system must be competent and make consistent decisions. The procedural
rules must be tested in practice, because how they will be used depends on complex
behavioral responses that are difficult to predict. The length of time required lo resolve cases,
the system's efficiency and ability to improve access for claims, and the objectivity and
quality of the judgments cannot be anticipated with confidence.
Demonstrations of Administrative Systems. Although the experiences of several existing
types of administrative systems in other contexts can be instructive, there is no working
model of an administrate e system for medical malpractice. It would be best to initiate
demonstrations of an administrative system on a limited basis, to curtail the potential expense
and to permit rigorous evaluation. The demonstrations must be carefully planned lo
overcome practical problems in carving out claims from the tort system. They should ensure
that important questions will be answered to pave the way for a vastly different malpractice
system in the future. A federal demonstration could involve defined populations such as
Medicare, Medicaid, or Federal Employee Health Benefits Plan enrollees within a geographic
area.
6
Halley and others have proposed an administrative system modeled after workers' compensation that incorporates
many similar procedures. This proposal would also change the standard for compensation from negligence to no-fault
(Halley et al. 1988). The Physician Insurers Association of America also has developed a model administrative system.
It should be noted that administrative systems can use a negligence standard for determining compensability (as the
AMA proposal does) or any alternative standard, such as the ones discussed in the next section.
7
The proposal also would change substantive legal rules (including the standard for liability) and establish a board
to oversee the claims resolution system and carry out credentialing. monitoring, education, and discipline of phvsicians
(Johnson etal. 1989).
194
H il
�A demonstration would hold costs down if it substitutes the administrative process for the tort
system. This would allow a test of how well the administrative system works in handling
cases that are now resolved in the court system. Either recourse to the courts could be
foreclosed, or strong incentives not to use the court system could be instituted. The latter
could include, for example, a requirement that all cases be pursued first in the administrative
system. Decisions could be appealed to the courts for limited or full review, but with the
proviso that if the outcome were not substantially different, the losing party would pay the
winner's legal costs for the appeal. Alternatively, the administrative decision could establish
an affirmative defense or presumption that must be overcome by the party challenging the
decision.
8
To achieve the different malpractice system of the future envisioned earlier, however, greater
access for claims will need to be obtained by the elimination of entry barriers. Inviting more
claims would raise the cost of the system, however. To minimize the additional cost, the
demonstration could apply only to smaller claims. This would intrude minimally on the
present system yet provide experience with an administrative system that could later be
expanded. Medicare could usefully serve as the basis for a small demonstration administered
by the Health Care Financing Administration, since Medicare patients have reduced access to
the present system because of their low expected awards combined with the contingency fee
To !iJ|) prepare for a future injury compensation system, demonstrations could usefully
assess the feasibility and value of the following features:
decisionmakers who are impartial and experienced;
written justifications for decisions that are accessible for use in future cases:
a faster, flexible, abbreviated process;
incentives f n settlement;
foreclosure or strong discouragement of use of the court system; and
guidelines for determining the level of economic and noneconomic damages.
R
Kaiser Permanente has required in its contracts with employers that injured patient-employees must seek redress
with binding arbitration. The California Slate Supreme Coun ruled that patients are bound by these contracts, because
the contracts were between parties ol ivLmvely equal bargaining power (such as an employer and an HMO) and
subsiuiuuc lights were not affected (Weiler 1991).
195
�Alternative Standards for Deciding Compensability
The negligence standard docs not appear to be a good guide to decisionmaking by providers
and juries. It is possible that more reliable standards for liability could be developed. Such
standards must be tested for their reliability and their effects on number of claims paid. This
section discusses the potential of deciding compensability based on no-fault, avoidability
(including accelerated-compensation events), and practice guidelines.
No-Fault Liability. A no-fault standard would compensate patients whose injuries were
caused by medical care, regardless of whether the care was substandard or not. The
determination of eligibility for compensation would be simplified by dispensing with the
need lo delermine the standard of care and whether it was breached. Evidence from one study
suggests that judgments of causation can be made more reliably than judgments of
negligence, although some difficullies would remain because the adverse effects of treatment
must be distinguisk..: from the underlying illness (Brennan et al. 1989). Further, it would not
be desirable to compensate losses from predictable adverse outcomes from treatment, yet it is
difficult to formulate a decision rule to exclude them.
No-faull systems have been instituted in other countries, most notably Sweden (Rosenthal
1989). These systems are probably not transplantable to the United States in as much as the
contexts are quite different. Awards are modest in Sweden because social insurance systems
largely pay for health care and
earning.-, from Jisuoilu). 70 perceni oi' paymenis are fo-pain and suffering. The total cost of the Swedish system is only about $2 per citizen per year,
and administrative costs are only 18 percent. Claims are handled quickly and efficiently by
insurance adjusters. In the United States, the greater amounls of money at stake would
probably necessitate more involved and expensive legal process.
The principal drawback to a no-fault system is the vast number of injuries that would be
eligible for compensation. Awards would have to be restricted to keep the system affordable.
In estimating the cost of a hypothetical no-fault system in New York, for example, the
Harvard Medical Practice Study investigators restricted compensation to net economic losses
experienced more than six months after the injury, with no noneconomic damages permitted
(Harvard Medical Practice Study 1990). In addition, the experience overseas is that, with a
no-fault system, the number of claims increases steadily (Rosenthal 1989). A no-fault system
does not appear to be a practical option in the U.S. at this time.
Avoidability. Some errors in care are not negligent. For example, a mistake in considered
professional judgment is often deemed not to be negligent. Whereas in hindsight the injury
might have been preventable, having missed the opportunity to avoid it is not considered
negligence. It may be easier to determine whether an injury was avoidable — by some
measure of probability — than whether failure to avoid it was due to negligence.
196
�iH.
A standard based on avoidability is appealing because it compensates patients for injuries
that need not have occurred. Fewer claims would be compensated than under no-fault, which
could keep the system affordable. For example, a particular treatment may entail a known but
unavoidable risk of a serious injury or complication. Patients who experience an adverse
outcome from the treatment would be compensated under a no-fault system, but not under a
standard based on avoidability. However, more claims would qualify for compensation under
an avoidability standard than under a negligence standard.
An avoidability standard offers other advantages as well. It shares with no-fault the
advantage of not requiring a judgment about whether the care was substandard.
Compensation for an injury would not itself mean that the care was negligent. That
determination would need to be made through another mechanism. Separating the
compensation decision from judgments about quality of care could reduce defensive
medicine practices and improve providers' confidence in the system. At the present time,
there is no infonnation on the reliability of such a standard, but it is likely to be more reliable
than that used to determine negligence. In particular, with improved knowledge about the
effectiveness of treatment, a standard based on avoidability should become even more
reliable (see Chapter 8). Further work is needed to develop and test such an approach.
The accelerated-compensation event (ACE) proposal is an attempt to make an avoidability
standard clear for certain injuries (Tancredi and Bovbjen' 1 : Bovbjerg et al. 1991). ACEs
comprise a list of avoidable adverse outcomes of care that are designated in advance to be
compcns;.: ... 1 a
1
uuis within the definition of an ACE. it will automatically be
compensated without legal process — preferably according to a schedule of damages. ACEs
can be derived from judgments about what adverse outcomes are avoidable with good care
more than a specified percentage of the time. Examples might include complications from a
foreign body (e.g., a sponge or hemostat) unintentionally left in any operation site,
complications from inadvertent laceration of the bladder during a hysterectomy, or
complications from failure to diagnose and treat low blood sugar in a newborn. ACEs are
closely related to fault, since occurrence of a usually avoidable outcome is probnblv due to
.Nubsia:- ' . . e
proportion of the time. However, no determination of fault is made in
any individual case.
1 0 0
Because claims that involve ACEs would not require case-by-case determinations of liability,
it is thought that they would be resolved faster, more efficiently, and more consistently.
Prevention of injuries could be furthered by dissemination of the list of ACEs, and patients
and others wo:-' ' 'v better able to recognize '" injury t b " qualifies for compensation.
Databases could be designed so that ACEs could be better detected and their incidence
monitored. Administrative savings would occur because there would be no contested
detennination of liability involving lawyers. There would be no need to determine anew in
each case whether a given injury was caused by negligent care.
i
197
�With this system, there may also be less delensive medicine, since for ACE injuries only the
ouicome — not the process — of care is relevant. Fault would not be detennined in each
case, so the stigma of a finding of negligence would not be attached to compensation.
Another mechanism would be needed to review quality of care.
Not all negligent injuries could be encompassed by ACEs. but it seems that most could be.
One study of 285 obstetrics claims found that 52 perceni (and ^ y^'-cent of paid claims),
would have been included in a list of 48 obstetrical ACEs (Bovbjerg et al. 1991).
Since an ACE system has never been implemented in actual practice, its feasibility should be
tested first on a small scale. ACEs could be used in conjunction with an administrative
system demonstration project, or they could be "carved out" from the court system. A
comprehensive list of ACEs need not be implemented at once. The demonstration should
permit measurement of the effc... of an ACE system on the cost and number of claims.
Practice Guidelines. One possibility is to use practice guidelines to define the standard of
care to be delivered (see Chapter 8). This may be important to make providers confident that
they can deliver cost-effective care without being second-guessed. Conversely, if the practice
guideline were not followed (without justification), the provider would be liable for injury
that would have been prevented had the guideline been followed. The standard of care would
thus be more cleariy defined, although questions can often be raised aboui llie applicabilus of
a practice guideline to a particular patient. The guidelines must be flexible to accommodate
differences among patients and in available resources. Guidel^es thai define the standard of
care should be valid and reliable. /
Although practice guidelines can help rationalize how cases are resolved by the malpractice
system, they apply only to a minority of claims that are being brought at this time (Garnick et
al. 1991). Few of the injuries that now result in claims would have been prevented by
following the types of guidelines currently being developed, which identify the effectiveness
and cost of different approaches to treatment. For example, technical errors in the
performance of a procedure or operation would not be covered by an existing practice
guideline. Other standards must be used to decide cases that are not covered by guidelines.
Nonetheless, guidelines for cost-effective treatment could help ensure that payers and
providers who adopt them can deliver such care with confidence. Moreover, i f practice
guidelines were developed with the prevention of injuries as an objective, they could be
useful in deciding cases as well as preventing injuries. For example, hypoxic injuries during
anesthesia have been successfully reduced by guidelines for intraoperative monitoring, which
were developed specifically to prevent such injuries. These guidelines have now become the
9
9
it is not known how well the present malpractice system will protect providers who follow good guidelines (Hall
1991). Maine is legislatively permitting specified practice guidelines to be used as a defense in malpractice claims
(Bankhead 1991).
II
III'
198
�standard of care.
Tort Reforms
Conventional tort reforms comprise procedural and substantive changes in the rules
governing malpractice claims in the legal system. In the past 15 years, every state (except the
District of Columbia) has enacted some type of statutory reform of its malpractice litigation
system, and tort reforms are part of most congressional bills introduced on malpractice
(Spernak and Budetti 1991;Table 7-1). This section discusses various tort reform proposals
and makes recommendations concerning their adoption.
Tort reforms are intended to improve incrementally the workings of the present tort system.
In doing so, however, the number and size of claims paid by the malpractice system would
decrease. This probably would reduce malpractice insurance premiums in many states, but it
would not in itself resolve the major problems of the malpractice system. However, tort
reforms could help make the tort system somewhat more efficient and consistent until more
fundamental changes are made, and they could be adopted immediately. In the short run,
these changes can be beneficial for the health care system as a whole.
In addition, some tort reforms are necessary steps toward the malpractice system of the future
outlined earlier in this chapter. Limits on noneconomic damages are necessary for a system to
compensate many more claims without raising the total of payments too much. At the
extreme, to hold down the cost of a proposed no-fault system that would compensate many
claims, the Harvard Medical Practice Study investigators would completely exclude
noncounuinic damage* irom payment (.Harvard Medical Prac lice Stud) 1990;.
If tort reforms were enacted in isolation, however, their benefits would come at the expense
of injured patients. Awards would be reduced, and access to legal representation for some
potential claims would be hindered by strict limits on damages and contingency fees. Access
could be preserved by including reasonable attorney's fees as an element of economic
damages, but this would create an incentive for claimant's lawyers not to settle cases early.
Strong incentives for settlement would be necessary to prevent excessive litigation (Weiler
1991). Tort reforms should ideally be adopted as part of a package of refonns that include
expanded access to a well-functioning alternative compensation mechanism, better
prevention of injuries, or other measures that would benefit patients.
Malpractice legislation has traditionally been the province of the states. The rising federal
interest in malpractice reform has led many to conclude that federal action is justified, even at
the price of entering an area previous^ reserved to the states. Tort refonns have been enacted
inconsistently by the states. It is unlikely that they will be adopted uniformly, and some tort
reforms have been declared unconstitutional by some state courts. For tort reforms to be
implemented across-the-board, either federal preemption of state law is required, or states
need strong federal incentives to adopt the reforms.
199
�TABLE 7-1. Examples of Medical Malpractice Legislation Introduced in the 102d Congress
S. 489, H.R. 1004
(Hatch, Johnson)
S. 1123, H.R 3037
(Administration bills)
.|
S. 1232. H.R. 3857
(Domenici. McMillan)
TORT REFORM
Incentives tor adoption of reforms
federally mandated reforms
economic incentive/
disincentive program*
mandatory tor beneficiaries of
federal health programs"
$250,000
$250,000
$250,000
Collateral sources offset
yes
yes
yes
Eliminates joint and several liability for
noneconomic damages
no
yes
no
Periodic payments for awards over
S100.000
yes
yes
yes
contingency fee limits;
maximum 4-year statute of
limitations (except for children
and undiscovered injuries)'
none
punitive damages awards given
to state agencies to monitor and
discipline health providers
„ap on noneconomic damage
Other tort refoms
ALTERNATIVE DISPUTE RESOLUTION (ADR)
Incentives for adoption of reforms
provides grants to states to
develop and implement a
variety of ADR systems
uses incentive/disincentive
program' to foster mediation
and pretrial screening"
mandates that beneficiaries of
federal health programs use
binding arbitration for claims
INJURY PREVENTION, QUAUTY IMPROVEMENT, AND LICENSING
Incentives for adoption of reforms
strong economic incentives'
economic incentive/
disincentive p t w a n r '
federally mandated reforms
injury prevention/quality assurance
programs
states must require health care
providers to institute patient
safety monitoring systems
liability insurers to mandate
insureds' participation in
patient safety programs
requires states to implement or
mandate quality improvement
and risk management
programs
directs HHS to establish criteria
to certify practice guidelines
Physician licensing, credentialing, and
discipline
requires states to allocate
provider fees to licensing and
disciplinary activities, and to
authorize and protect from
antitrust law medical societies'
participation in provider review
requires states to improve
physician oversight through
state medical boards and
mandate that sanctioned
physicians obtain education in
areas found deficient
requires arbitration panels to
provide state and federal
licensing and disciplinary
agencies with standardized
information on medical injuries
LIABILITY INSURANCE
Creates separate risk retention group
for Community/Migrant Health Centers
(C/MHCs)
funds feasibility study and
provides capital (if feasible) for
C/MHC risk group
no
no
' This program would t
two incentive pools by withholding a percentage of I) Medicaid administrative expense payments to state
governments and 2) Medicare payments to hospitals. Funds from the Medicaid withholding pool would be divided among states lhal have
implemented the necessary reforms. Funds from the Medicare withholding pool would be used to increase payments to hospitals in complying
stales.
b
This includes beneficiaries of any federal health program (such as the Medicare, Medicaid, federal employees health benefits. Veterans
Administration medical, and Public Health Service programs), or of any tax-deductible employer-provided health plan.
' Claims must be filed within 2 years of when the injury shouldreasonablyhave been discovered or 4 years from the injury, whichever is later.
Children under age 6 would have until their 10th birthday to file claims.
* The President's Comprehensive Heallh Refnrm Program (February 1992) also suppons specificreformsin state contract law and federal rules
of civil procedure to persuade or require panies to use ADR.
' Slates would be required to adopt the specified reforms as a condition of receiving funds under the Public Health Service Act (Hatch bill), or
as a condition of being granted die auUiority to certify Medicare providers (Johnson bill). Grants would also be made available to help stales
improve their ability to monitor and discipline health professionals.
�A third u!t:;;-.:.;l'.o is to authorize the adoption of reforms by private contract (Havighurst
1989; Bovbjerg and Havighurst 1986). For example, an employer could contract with an
HMO for its employees' health care, with the proviso that injured employee-patients would
forgo any noneconomic damages over a certain cap. The private contract method would not
ensure the widespread implementation of tort reforms, but presumably their effects would be
limited to patients and providers who agreed to adopt them.
The Commission favors certain tort reforms in conjunction with other reforms that will
benefit patients. The following is an analysis of the merits of proposed tort reforms. As
reforms are implemented, it will be important for AHCPR to fund studies of the effects of the
rc: ms on patients' rate of claims, access to legal representation, and compensation lor
injuries.
Limits on Noneconomic Damages. Much of the unpredictability and inconsistency of
malpractice awards is due to noneconomic damages (i.e., pain and suffering), which
constitute about half of total payments (Metzloff 1991). Such damages are highly subjective.
Reducing this unpredictability and removing the open-ended nature of these damages would
probably improve decisionmaking during the course of a lawsuit.
.•\».uiu* I'UI IIUIICV-UIICIIUIC uamages siiouiu oe rationalized by reasonable limits or schedules
for noneconomic damages. Almost half of the states have no statutory limits on noneconomic
damages, so universal adoption ot" this reform could have a substantial effect.
Limits on F^nomic Damages. Economic losses include tangible monetaiy losses or
expenses like lost earnings and medical and rehabilitation expenses. Absolute caps on
economic damages are difficult to justify under the current tort system, since they
disadvantage injured patients with tangible losses greater than the cap. Few states now limit
ecom.inic damages, and some state courts have found such caps unconstitutional. The
Commission does not recommend limits on economic damages. Instead, attention should be
paid to developing more accurate methods of calibrating losses, including better appraisals of
medical, rehabilitative, and other needs.
Limits on Punitive Damages. Punitive damages are rarely indicated in medical malpractice
cases. Excessive or unjustified punitive damages awards do not appear to be a problem in
medical malpractice cases (Metzloff 1991). Much attention is being paid to punitive
damages in other tort contexts in which they are allegedly more egregious. The Commission
defers consideration of punitive damages to reform efforts for the tort system in general.
10
"' Punitive daniaL'e> appear to be asserted far more often lhan they are awarded in medical malpractice cases
(Metzlol'l 1991). If this is thought to be dclctcrioii\. requests for punitive damages could be discouraged or prohibited.
201
�Modification of the Collateral Source Rule. The collaieral source rule prohibils
consideration of olher payments, such as those from health or disability insurance, a claimant
may receive in compensation for losses due to an injury. Nearlv half of the states have not
modified the collateral source rule, permitting duplicate payments for a given loss. An offset
of malpractice awards for collateral source payments is consistent with the compensation
function of the malpractice system (although in theory it weakens general deterrence of
injuries because their full cost is not bome by the provider). Offsetting awards for collateral
.•source p.., iiients < ..w
*
e under the p.w.-.em ton system.
.........
affordability of the internal cosls of a future, more-inclusive administrative syslem.
Restrictions on Joint and Several Liability. In cases with more than one defendant, the
doctrine of joint and several liability holds any defendant responsible for the full award if any
other defendants cannot pay their shares apportioned by fault. The purpose of this rule is to
ensure adequate ce^ipensntion for the injury (even though it provides an excessive deterrence
.ive to defendants who have to pay more than warranted by their share of fault). Thirtyone states have placed restrictions on joint and several liability. Some have adopted a
threshold of degree of fault below which joint and several liability does not apply; others
have abolished joint and several liability entirely for noneconomic damages.
Practitioners and entities with adequate resources to pay malpractice awards do not like to be
made responsible for the full amount of an award when their contribution to fault is minor or
Negligible. But it should be recognized that limits on their liabilitv may come al the expense
of adequate compensation of injured pauents. The Commission recommends that a balance
be struck by limiting joint and several liabilily for noneconomic damages onlj or by ad^-;ing
thresholds for the application of joint and several liability. For hospitals and other heallh care
organizations that deliver care directly, however, enterprise liability could be approximated
somewhat, if desired, by maintaining full joint and several liability for injuries caused by
defendants who are part of the enterprise.
Periodic Payments of Large Awards. More than half the states require larger awards to be
paid in installments over time. It is best if the payments are tailored to meet specific future
needs. An annuity can be purchased to meet continuing needs from permanent injuries.
Annuities also permit tax-advantaged investment of an award. Overall, the Commission
considers periodic payment beneficial.
Limits on Attorneys' Contingency Fees. The typical contingency fee paid to the claimant's
attorney out of the award is about one-third of the recovery. The purpose of limiting
contingency fees is to better approximate the fee to the work performed by the lawyer. About
half of the states have restricted contingency fees in some manner, including 11 that have
enacted specific fee schedules or sliding scales based on the amount of the recovery. It is
possible that fee reductions may restrict access to legal representation for some claimants
with less-than-certain recoveries, although this effect may be minor if the reductions apply
only to large recoveries. In addition, it may be good to discourage claims with little chance of
202
�success that are pursued simplv because the potential attorney's fee is unreasonably large.
The Commission recommends reasonable limits or schedules for attorneys' fees to direct a
greater proportion of a large award to the patient.
Perhaps a better method of approximating claimants' attorney fees would be to base the fee
on the progress of the lawsuit rather than on the total award. The amount or percentage would
increase as the lawsuit progressed through trial. Because this would create an incentive for a
claimant's lawyer not to settle cases early, the change must be accompanied by measures to
encourage settlement.
11
Reductions in Statutes of Limitation. These laws limit the time period, after an injury is or
should have been discovered, during which claimants may file a lawsuit. If the allotted period
expires, a claim is barred even if it is meritorious. Most states allow a longer time period for
minors, often until the age of majority. Long statutes of limitation create uncertainty, delay,
and expense in insuring against malpractice claims. The principal sources of problems
concern birth injuries. Eight years is undoubtedly a safe period to allow detection of perinatal
injury, and shorter periods are defensible. States that have longer statutes of limitations for
minors should be encouraged or required to reduce them to eight years at most.
12
Shifting of Legal Fvn<-nwes to the Losing Party. In the English system, the losing party
pays the winner's legal costs. This should not be adopted in isolation in the United States,
because it would deter many potentially valid claims. However, in conjunction with a good
alternative dispute resolution option, shifting of legal expenses could serve to encourage use
of the ADR system. For claims decided in a nonjudicial system, unsuccessful appeals to the
court system could be discouraged by shilling to an unsuccessful appellant the opposing
side's legal costs. Shifting legal expenses could also be used to strengthen incentives for
settlement in the current court system or with ADR systems.
Screening Out of Nonmeritorious Claims. Claimants' lawyers have an incentive to screen
out claims that are unlikely to result in payment. However, some believe that nonmeritorious
claims are brought to gain a small nuisance value settlement. Often it can be difficult to discern at a case's incepuoii w ;;!iei it has merit, because key inlurmation can be lacking and
must be obtained throuun die legal process.
K
Pretrial screening panels have been used to act as barriers to nuisance suits and to provide
early determinations of whether cases have merit. Experience with pretrial screening panels
has been mixed. Their success appears to depend on how they are designed and implemented.
11
For example, the panies could be required to exchange offers of setdement. If the final outcome is not an
improvement over a settlement offer previously refused, attorney's fees subsequent to the refusal could be paid by the
party that refused (Metzloff 1991).
'- Evidence indicates thai cerebral palsy is usually diagnosable by three years of age. and difficult case ::M be
diagnosed at age five i Stanley and Watson h>S5).
203
�and whether the pretrial decisions are admissible as evidence in subsequent litigation. If
cai ricd out properly, pre-trial screening can be beneficial. In Maryland it seems to ha\e nad a
positive impact, but in other states screening panels have merely added delay and expense to
an already inefficient process (Morlock 1990).
Other early interventions are more promising. For example, court-ordered arbitration,
mediation, and other ADR techniques are likely to be more efficient than screening panels. A
variety ol innovations shoulJ
;c*i>.u.
MALPRACTICE REFORM AND COST CONTAINMENT
Part of the national interest in health care cost containment is centered on reforming the
malpractice system. This section analyze* mc poiential for malpractice reform to help contain
health care costs.
The widespread implementation of tort reforms would reduce malpractice insurance
premiums — and thus health care costs — in states that have not enacted the full panoply of
such refonns. Compared with the growth in overall health expenditures, however, this effect
would be relatively minor. Improvements in the malpractice system are more likely to
achieve substantial cost savings in three ways: by reducing the number of avoidable medical
injuries: by curtailing the amount of inefficient or inappropriate defensive medicine; and by
helping lo support the deliveiy of effective, efficient care. The substantial reforms outlined in
this chapter could ultimately lead to a system that could contain costs in all three ways. By
contrast, conventional tort reforms alone would likely contribute to cost containment
primarily by lowering malpractice insurance premiums.
Avoidable Medical Injuries
Substantial reduction of medical injuries would require the improvements in databases,
detection methods, systematic interventions, and incentives that are described above. In
particular, better data about the causes and incidence of medical injuries are essential to the
success of prevention efforts. Reforms that improve data collection would thus be helpful.
ACEs could identify in advance what injuries are avoidable and qualify for compensation,
which may prompt providers to take actions to avert such injuries. Practice guidelines could
help prevent injuries if they were constructed for that purpose.
The general deterrence threat of today's malpractice system is much less important to further
reductions in injury than are the more specific measures discussed here. Theoretically, deterrence
could be strengthened if ADR and tort reforms make liability decisions more consistent and
consonant with medical judgments. However, improvements in claims processing may
paradoxically weaken deterrence by reducing the likelihood and burdens of being sued.
204
�Defensive Medicine
The extent, cost, and causes of defensive medicine are speculative, making it impossible to
predict with certainty how various malpractice reforms would affect them. Dramatic
improvements in the performance of today's malpractice system are necessary to reduce
substantially the practice of defensive medicine. That conventional tort reforms would
substantially affect the possible causes of defensive medicine is doubtful. Tort reforms
probably do not sufficiently reduce the probability and burdens of being sued to cause
physicians to alter their suit-avoidance behavior. In addition, tort reforms neither provide
better prospective guides to decisionmaking nor make judgments of liability more accurate.
In states like California that have already put in place significant tort reforms, there is no
reason to believe that defensive medicine has substantially lessened.
Administrative systems could potentially lessen defensive medicine if malpractice decisions
are seen as more accurate. The greatest potential for improvement is the development of
better prospective guides to decisionmaking, along with a malpractice system that will
support their use by physicians and other providers. Such guides could include practice
guidelines that identify good, cost-effective care and a more predictable liability standard for
malpractice cases. Another useful change would be the separation of compensation decisions
from judgments about quality of care, as would occur with ACEs and olher quasi-no-fault
standards. If quality of care were judged by a peer review process in which physicians had
confidence, and injuries were compensated wiihout a case-by-case determination of
individual fault, there would be less reason for physicians to practice defensive medicine.
The uncertainty aboui the extent and cost of defensive medicine makes it unwise to justify
malpractice refonn — particularly tort reforms — on the grounds that it will save substantial
amounts of money by reducing such practices. Even if the amount of defensive medicine is
substantial, reducing it is a long-term project requiring fundamental reform. The public
policy debate would benefit from better infonnation, and the Congress should appropriate
funds to AHCPR to sponsor research on defensive medicine.
13
Appropriate, Cost-Effective Care
A major goal of health care refonn is to promote the delivery of appropriate, cost-effective
care. Practice guidelines could be an important tool in this task (see Chapter 8). Useful
practice guidelines will identify acceptable treatment approaches. For practice guidelines to
be used effectively, patients, providers, and payers need to have the discretion to choose coste rtive approaches. The malpractice system could limit this discretion to the extent that it
ir
i c q u n o uie u e m e i y ol more i n l c i i s n e auu less »_uM-ciiev-ii\c caie. i n e i e is icasun io ueiie\e
that the operation of the legal system has resulted in the widespread adoption of inefficient
1
' Tlie Office of Technology Assessment is undertaking a rehuivcly w M study of defctisue nicvlteinc. but more
coniprchensive studies are needed.
205
�standaids of care (Havighurst 1991). Close attention should be paid in the future to methods
of ensuring that the malpractice >\stem does not prevent practice guidelines from addressing
ihis problem.
Providers must be confident that they will not be penalized for delivering appropriate, costeffective care. An administrative system of compensation for injuries that uses experienced
decisionmakers nnd refers to prior published decisions may be more likely to support care
that is consisieni with well-constructed practice guidelines. Maine has legislated thai cenain
practice guidelines are introducible in court to establish the standard of care, but only by the
defense (Bankhead 1991). Other approaches may need to be devised for ensuring that the
malpractice system and practice guidelines are mutually supportive, such as a shifting of
presumptions or burden of proof, or the formal adoption of guidelines by private contract.
The goal of making health caie more appropri a:' nJ LU.M-^IICCUW requires a ^uuidinated
effort on many fronts, including malpractice. Taking the steps to move toward the
malpractice system of the future envisioned in this chapter would contribute greatly to
making health care reform successful.
REFERENCES
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;
American Medical Assorintion. "The Post of Men, :,I Professional Liabi! '- ' i 'be 198ns."
Center for Health Policy Research, American Medical Association. Chicago, IL.
September 1990.
Bankhead, Charles D., "Maine Tests Parameters as a Legal Defense," Medical World News
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Bovbjerg, Randall R. and Clark C. Havighurst, eds. "Medical Malpractice: Can the Private
Sector Find Relief?" Law and Contemporary Problems 49(2): 125-320, 1986.
Bovbjerg, Randall R., Laurence R. Tancredi, and Daniel S. Gaylin, "Obstetrics and
Malpractice: Evidence on the Performance of a Selective No-Fault Syslem," Journal
of the American Medical Association 265:2836-2843, 1991.
Brennan, Troyen A., Russell J. Localio, and Nan M . Laird, "Reliability and Validity of
Judgments Concerning Adverse Events Suffered by Hospitalized Patients," Medical
Care 27:1148-1158, 1989.
Brennan, Troyan A., A.C. O'Neil, E.F. Cook, et al., "Reporting by Residents of Adverse
Events on a Medical Service," [abstract], American Federation for Clinical Research
annual meeting, Baltimore, MD, 1992.
206
�Caplan. Robert A., Karen L. Posner, and Frederick W. Cheney, "Effect of Outcome on
Physician Judgments of Appropriateness of Care," Journal of the American Medical
Association 265:1957-1960, 1991.
Frisch, Paul R., "The Best Malpractice Prevention Program in the U.S.?" Physician's
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Garnick, Deborah W., Ann M. Hendricks, and Troyen A. Brennan, "Can Practice Guidelines
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Compensation System: A Model Act," Journal of the Kansas Medical Society
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Malpractice Litigation, and Patient Compensation in New York, report to the State of
New York, 1990.
Havighurst, Clark C. '"Malpraciice Refoim: Gelling There by Private Vehicle," in M. Martin
Halley. Robert J. Fowks, F. Calvin Bigler, et al.-, eds., Medical Malpractice Solutions:
Systems and Proposals for Injury Compensaiion (Springfield: Charles C. Thomas.
1989). pp. 115-127.
Havighurst, Clark C . "'Practice Guidelines as Legal Standards Governing Physician
Liability," Law and Contemporary Problems 54(2):87-l 17, 1991.
Johnson, Kirk B., Carter G. Phillips, David Orentlicher, et al., "A Fault-Based Administrative
System for Resolving Medical Malpractice Claims," Vanderbilt Law Review 42:13651406(1989).
Keenan. Richard and C. Paul Boyan, "Decreasing Frequency of Anesthetic Cardiac Arrests,"
Journal of Clinical Anesthesiology 3:354-357, 1991.
Kravitz, Richard L.. John E. Rolph, and Kimberly McGuigan, "Malpractice Claims Data as a
Quality Improvement Tool," Journal of the American Medical Association 266:20872092, 1991.
Leape, Lucian L., Troyen A. Brennan, Nan M. Laird, et al., "The Nature of Adverse Events
in Hospitalized Patients: Results of the Harvard Medical Practice Study I I , " The New
England Journal of Medicine 324:377-384, 1991.
207
�Lindgren, Orley H., Ronald Christensen and Don Harper Mills, "Medical Malpractice Risk
Management Early Warning Systems," Law and Caiucnipomiy Problems 54(21:23-
Metzloff, Thomas B., "Resolving Malpractice Disputes: Imaging the Jury's Shadow," Law
and Contemporary Problems 54(1):43-129, 1991.
,;
Morlock, Laura L., "A ' cessment of Poten 'il Impact on Claims Resolutu
Care," Courts, Health Science, and the Law l(l):35-45, 1990.
Quality ol
Morlock. Laura L., and Faye E. Malitz, "Do Hospital Risk Management Programs Make a
Difference? Relationships Between Risk Management Program Activities and
Hospital Malpractice Claims Experience," Law and Contemporary Problems 54(2): 1 ->-)
lorn
Pear, Robert, "Community Health Clinics Cut Back as Malpractice Costs Soar," The New
York Times, August 21, 1991, p. 18A.
Physician Payment Review Commission, Annual Report to Congress 1991 (Washington, DC:
PPRC, 1991).
Rolph, John. "Merit Rating for Physicians" Malpraciice Premiums: Only a Modest
Deterrent," Law and Contemporary Problems 54(2):65-86, IW1.
Rolph, John, Richard Kravitz, and Kimberly McGuigan, "Malpractice Claims Data as a
Quality Improvement Tool: I I . Is Targeting Effective?" Journal of the American
Medical Association 266:2093-2097, 1991.
Rosenthal, Marilyn M., "The Medical Malpractice System in Sweden," Social Change in
Sweden (Swedish Information Service), No. 39, February 1989.
Sanazaro, Paul J. and Don Harper Mills, "A Critique of the Use of Generic Screening in
Quality Assessment," Journal of the American Medical Association 265:1977-1981,
1991.
Spernak, Stephanie, and Peter Budetti, Compendium of State Systems for Resolution of
Medical Injury Claims, prepared for the Agency for Health Care Policy and Research,
Center for Health Policy Research, The George Washington University, Washington,
DC, February 1991.
Stanley, F.J. and L.D. Watson, "Methodology of a Cerebral Palsy Register. The Western
Australian Experience," Neuroepidemiology 4:146-160, 1985.
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�*
"
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f
-
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^ r , L r ^ i ^ TT —
T
Weiler, Pa , C, ^ ,
u
^
-
c o / M a l p r a c
^
^
,
„„
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^
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209
^
C
a
m
^
b
n
d
g
^
e
:
^
^
H
y
f O Tpatai
Refo™ Rip,
^
�310
Imfrrmri
Policy and
Management
«
80. A. L. Stewart, S. Greenfield, R. D. Hays, K. Wells, W. H. Rogers, S. D.
Berry, E. A. McGlynn, and J. E. Ware, "Functional Status and Well-Being
of Pauents with Chronic Conditions: Results from the Medical Outcomes
Study, "Journal of the American Medical Association 262, no. 7 (1989): 907—13.
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82. Physician Payment Review Commission, Annual Report to Congress (Washington, DC: Physician Payment Review Commission, 1991).
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84. Berwick, "Health Services Research."
85. H. D. Banta and S. B. Thacker, "The Case for Reassessment of Health
Care Technology: Once is Not Enough," Journal of the Amencan Medical
Association 264, no. 2 (1990): 235-^0.
86. Reinhardt, Physician Productivity.
87. V. R. Fuchs and J. S. Hahn, "A Comparison of Expenditures for Physicians'
Services in the United States and Canada," New England Journal of Medicine
323, no. 13 (1990): 884-90.
88. I. Moscovice, "A Method for Analyzing Resource Use in Ambulatory Care
Settings," Medical Care. 15, no. 12 (1977): 1024.
89. Eisenberg et al., "Substituting Diagnostic Services."
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91. S. D. Horn and D. N. Schumacher, "Comparing Classification Methods:
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Medical Care 20, no. 5 (1982): 489.
92. A. M. Epstein, R. S. Stern, and J. S. Weissman, "Do the Poor Cost More? A
Multihospital Study of Patients' Socioeconomic Status and Use of Hospital
Resources," New England Journal of Medicine 322, no. 16 (1990): 1122-28.
93. B. E. Fries, D. P. Schneider, W.J. Foley, and M. Dowling, "Case Mix Classification of Medicare Residents in Skilled Nursing Facilities: Resource
Utilizauon Groups (RUG-T18)," Medical Care 27, no. 9 (1989): 843-58.
94. R. B. Fetter, R. F. Averill, J. L. Lichtenstein, andj. L. Freeman, "Ambulatory Visit Groups: A Framework for Measuring Productivity in Ambulatory
Care," Health Services Research 19, no. 4 (1984): 415.
95. Weiner et al., "Population-Oriented Measure of Ambulatory Care CaseMix."
96. Stewart et al., "Functional Status and Well-Beinf;."
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98. R. M. Kaplan, J. W. Bush, and C. C. Berry, "Heallh Status: Types of Validity
and the Index of Well Being," Health Services Research l l , n o . 4 (1976):448.
Medical Malpractice
Peter P. Budetti and Stephanie M. Spernak
l .sues Surrounding Feoeral and State ! forts
to Address Medical Malpractice Problei is
• 'olicy questions
The two most commonly asserted social goals of the medical malpraciice system are fair and efficient compensation for medical injury losses
ind deterrence of medical i n j u r y . Less commonly noted as goals, but
still important to achieving fair compensation and deterrence, are accountability of individual medical practitiom i s to the community for
injury they cause, and accountability of the malpractice systen as a reliable forum for resolving medical injury claims. In view of these goals,
)olicymakers undertaking a critical assessment of the current nalpracice system face two major unresolved issues. First, there is ; serious
lispute over the degree to which the current medical malpra lice sysem achieves its stated goals. Second, even if the system is achi- ving its
^oals, there is an equally contested allegation that the financial, medical, and societal costs of doing so are too hii^h. The policy (p.esiions
that result are clear:
• Should the legal system be modified, and if so, in what ways:
• Have the reforms of the malpractice system or altern a live dispute resolution procedures performed any better?
12
j
This chapter is based on woik supported in part by a contract with the Physician
Payment Review Commission.
311
�J/2
whig Health Potir,
u n d
Management
Medi ad
• Jf major changes are desirable, should they continue to be our
• More fundame.MaJly, are the goals of the malpractice sys,, ,„
•ahsnc? Can anv single malpractice system achieve both ,
-luatc compen.uion
and effective deterrence? Zl sela
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Mtat does our negligence-based system try to achieve?
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313
a subject of great controversy and the frequent target of reform enactments, include monetary payments to "compensate" for pain and
suffering, loss of consortium, and diminished enjoyment o f l i f e .
The concept of noneconomic damages grows direcdy out of negligence law's theory of making the victim "whole" again. Obviously,
economic damages are far more easily calculated and supportable by
concrete evidence than is the subjective value of a plaintiffs pain and
suffering. Furthermore, noneconomic damages are unpredictable. Traditionally, juries have had no fixed formulae for calculating the amount
awarded for pain and suffering. The undeniable emotional appeal of
plaintiffs who suffer disfiguring or disabling medical injuries has often
resulted in very high awards for pain and suffering. The defendant,
however, has the right to appeal these awards and have the court determine whether the law permits and the evidence supports the particular award.
In cases in which a jury finds that a physician has been grossly or
recklessly negligent, the jury may award punitive damages. Because a
punitive damage award in the civil justice system is intended to punish
and make an example of tbe defendant in an e ffort lo deter similarly
egregious behavior by others, punilive damage awards may have no
relationship at all to tbe actual damages suffered by the plaintiff.
Other methods for allocating the costs of injury are possible. For
example, victims could be left to bear the costs of all injuries they
suffer. This was the case historically when hospitals were treated as
charities that were immune from lawsuits. Alternatively, anyone who
injures another, regardless of fault, could be required to compensate
the victim. This strict or no-fault liability system is currendy in place
for manufacturers of certain products, including drugs. Virginia and
Florida have adopted no-fault systems for compensating newborns who
suffer neurological injuries. These states provide compensauon only
for specific types of injuries, but as long as the injury was of a type presumed to be caused by medical treatment, victims need not prove that
the physician (the defendant) was negligent. The current fault-based
liability system falls midway between these extremes by shifdng costs of
injury from the victim to the actor only in cases of negligent injury.
6
7
• " " " ^ ^ ' o - g " adjudicUon „( p n
3, , l ' dme'
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;;
(j^^tice
'
s corupensai,, „ and governtnent disability proma.ns th-,.
'^•"•n , nly a poruon o, the losses mcurred by victims
Deterrence. The negligence-based system is also designed to deter preventable injuries by transferring the full costs of negligent harm to
the wrongdoer causing the injury. The argument is that physicians will
avoid being careless if they face the prospect of paying for damage
they cause ilirough a failure to exercise tine care.
�3H
i
Medical Mali p r ^ ^
h Polity und Management
Sever al criticisms of tlie deterrence potential of the current system have lieen voiced. Oni' is that the widespread availability of insurance uidcrcuts the deterrence factor, at least from the economic
perspective, since physicians are buffered from the full financial impact of a malpractice claim.
In addition, some critics question whether deterrence is a logically
consistent goal of negligenre policy since, by definition, negligence is
a failure on the part of the pbysician to exercise due care. Since physicians believe that their pn essional concern for the patient's welfare
provides maximum incent e to be as careful as possible under the
circumstances, tbey argue i iat physicians behave the same way with or
without the negligence threat. Moreover, physicians often claim that
injuties an.' the inevitable consequence of medical care in a certain
proportioi: of cases, and (I t inevitable injuries cannot be deterred.
Accounlabiiity. The malpra. tice system promotes community accountability for negligent behavior in a fashion similar to the criminal justice system. The actions ol negligent physicians are held out to public
scrutiny, and they are sub| ct to the emodonal punishment of anxiety,
shame, and guilt. In addith n to payment of money damages to the victim, the habitually negligent physician risks loss of hospital privileges,
provider status under various insurance schemes, and even the license
to pracuct medicine. ' T f : value of promoting accountability through
the malpractice system, he vever, has been widely questioned. Unless a
malpractice suit has been | ublicized by the media, only the witnesses
and parties to the suit are > cially aware of the proceeding. Most cases
are settled not publicly tru 1, and the parties often agree never to discuss whal look place. Whei public scrutiny does occur, an even more
fundainenial criticism arises. That is, many believe that finding fault
through jury trials is highK arbitrary and compensates injured victims
without regard to whether provider negligence is established.
This is a vitally important criticism because, if true, the malpractice system does nol < ompensate victims according to the cosdy
negligeno principle and fails to deter if providers may be held liable
regardless of tbeir actions Indeed, arbitrary liability determinations,
if they occ ur, may contribi.ie to defensive medicine because the outcome of malpractice litigation would not be linked closely to recognizable negligence standards. Medical practidoners may react by using all
medical technology availal c in an effort to appear conscientious and
r
thereby defeat potential n dical claims should injury occur.
8 9
315
What are the costs of this approach?
Permeating all analyses of the costs of our malpractice systems are difficullies in obuining reliable data on how much money fiows through
the system. Insurers treat informadon on setdement payments as proprietary, making it difficult to weigh the appropriateness of premiums charged. Recognizing the need to improve data for pohcymaking,
Congress has mandated the collecuon and availability for analysis of
information on all paid claims.
The information that has been available has led many to believe
that the so-called medical malpracuce crisis that appeared first in the
mid-1970s and again in the mid-1980s was evidence of a severe problem in the method of compensaung vicums of medical injury; that is,
the system did not appear to be operadng as intended and might have
completely broken down." Claim frequency, severity and insurance
premiums were all perceived as being too high."-* Thus litigaung liability for medical injury, it was felt, was simply too costly. In addiuon, even
if die process were not so expensive and even if it .net its intended purposes the fact that the liability system required finding physicians or
hospitals at fault for undue carelessness was seen as highly disrupuve
of medical pracuce.
During the past few years, however, both the steep rise in malpractice insurance premiums and the rate and severity of claims appear to
have abated. It is not clear what factors account for this phenomenon.
Some feel that effects of extensive malpracdce reform efforts are now
showing up. Others think that the fear of malpracuce has increased
hospital and practitioner awareness of developing appropriate practice patterns. Recent stabilization may be only temporary, however.
The alarming increases in malpractice claims, severiiy, and insurance
premiums that occ urred in the middle of the last two decades were
followed by levelingoff periods and then further sharp increases.
Much of the criticism of the malpracuce system as unnecessarily costly appears directly related to the requirement that an injured
patient prove negligence, or fault, on the part of the health care
provider in order to obtain compensauon for me dical injury. Pauents
and providers incur high costs to prove or defend against charges ot
negligence. Some believe that the adversarial component inherent in a
fault-based system erodes the fiduciary nature of the phys.cian-pauent
relationship. Physicians purchase cosdy insurance to avoid the personal
financial hazards of negligence, and they may pracuce defensive medicine to avoid both the economic risk and psychological costs resulung
from a negligence claim.
10
13
�316
alpractice
'fittwijig Health ft. 'icy and Mmiagrment
Maii\ |)urp()i ted cau-cs of tin: higli costs of medical malpractice
litigation have been identihed. As stales dropped long-standing barriers
to successful negligence suits, such as charitable immunitv for hospitals and the I- ( ality rule lor the standard of care, the frequency and
value of c lait
rose. Litigious patients, greedy lawyers, sympathetic
jurors and pi'olileering insurance companies have each been accused
by various parties as beiny the main cause of the problem.Concerns
lhat substandard medical . are is the principal cause of malpractice litigation have also been rai ed, mainly by lawyers and insurers. A more
neutral view attributes high malpractice litigation costs to the dramatic
post-World War I I increase in the provision of medical services, exacerbated by the increased risk of medical injury from sophisticated
medical technology and by the availability of private and government
funding to pay for medic I care.
One perceived source of the high cost of the present system is
an excessive number of 1 iwsuits alleging malpractice. Some believe
that clait.LS frequency is di en by large numbers of frivolous or baseless claii s liled by patieties seeking to force nuisance settlements or
to make up for a disappointing medical outcome even though that
outcome was a normal risk. Several negligence rules (e.g., discovery
rule, joim and several liability, recovery for noneconomic damages),
in addition to the contingency fee arrangement, are believed to favor
claimants unduly, thus en< ouraging tbe tiling of suits.
Thi- publicity that ihe few jury awards in the millions of dollars receive is also seen as promoting liugauon. The fact lhat these
large awards are often reduced—by an average of 40 percent—is rare I v
publicized. " In addition, generous awards for pain and suffering an
believed to be indicative of another systemic problem—lhal juries an
unable lo make complex determinations of medical negligence ami
instead ad on their sympathy for injured plaintiffs. Tbis view results
in lhe belief that the current system of resolving medical injury claimis arbitral y and unrelated to appropriaie standards of care or actual
losses suffered by patieni -.
Although malpractio insurance premiums recenlly have declined
signilicamly nationwide, h.gh liability insurance premiums are seen as
yet anothei aspect of th. cost problem, but not one necessarily attrihuiable to the negligei ce system. Some argue that tbe negligence
system works well, and t at excessive and rapidly increasing premiums were the result of nsurance industry profiteering and investment losses. Critics, howi ver, blame expensive or sometimes unavailable malpractice insurance on high clai/n frequency and award severity
14
1
coupled wiih the actuarial unpredictability of those factors. Unava
ability as such is believed to have abated due to the entry into d
market of physician-owned insurers, who now cover more than half
all U.S. physicians.
Finally, some believe that substandard medical care itself is t
cause of high claim frequency and high insurance premiums, part
ularly by incompetent physicians who generate a substantial amou
of medical injury that remains undetected or protected by their pet
and licensing authorities.
Defined solely in terms of the cost of i laims, awards, and i
surance premiums, malpractice issues seem of principal concern
physicians and insurance companies. Many now see broader rami
cations, however, and argue that the costs of tbe malpracuce syste
contribute substanually to the upward spiral of national health ca
expenditures. Physicians are believed to try lo avoid liability by pr;
ticing expensive but ineffective defensive medicine, and by passing (
costs of insurance premiums through their fees to patients and thi
party payers. As health care providers contend with increasing pn
sure to find ways of containing medical expenses, the "unnecessar
amounts associated with malpracuce liugauon will continue to be U
geted for reduction.
Finally, a more subde but nonetheless troublesome aspect of m
practice litigation is its alleged hidden noneconomic costs, such
physicians who will no longer provide high-risk services, notably c
stetrics, or who do not serve high-risk pauents, and the disrupuon
tbe physician-patient relationship caused by a perception of pervasi
litigiousness.
17
Implications of issues
If the allegations of deficiencies in the current medical liability s
tern are well-founded, tbe implicauons are very serious. In fact, t
negligence system would be guilty not only of failing to meet its go
but also of being counterproductive, both at high cost. Assume, I
example, that the method for compensaung injured persons is, ai
of ten argued, dominated by those who unfairly manipulate the syst<
raiher than by negligently injured parties. Compensauon of approf
ate persons would clearly not be accomplished. Deterrence would
minimized since the relalionship between avoidably careless behav
and liability would be tenuous. And accountability would be reversi
the wrong physicians would be held out to suffer the personal, pro!
sional, and social stigmas associated with a finding of fault.
�wing Health Policy and Manugemml
318
The potential magnitude of the failure of the malpractice system
to accomplish its goals would be borne out in other ways as well. The
financ ial costs associated with the medical liability system, chie fly insut
ance premiums and administradve costs, might contribute substantial!-,
to the upward spiral of national health care costs. In addition, loss oi
high-risk sei vices, notabb obstetrics, and of carer for high-risk patients,
would have serious socic il consequences.
Whether or not the- issue is quite so serious is widely debated.
Some critics believe that the costs—both economic and noneconomic
—of the malpractice liability system are gready exaggerated and based
on misperceptions. The\ argue that such costs may be evidence that tl .r
liability system produces strong deterrence. In addiuon, they contend
that alternative systems, s a h as no-fault proposals, could cost far more
in terms of claims and t ndeterred injury.
These policy issues have been addressed to varying degrees b
tbe research summarized in the following secuon. The strengths ami
deficiencies in existing data and the need for further inquiry in specific
areas are discussed in tiie subsequent section.
18
19
Medl^^mlpmctice
319
Comparing the incidence of compensable injury
with the frequency of compensated victims
The California study. In 1974, the California Medic al Associauon (CMA)
and the California Hospital Associauon jointly sponsored a study in
which medical claims experts examined 20,8f>4 hospital records from
23 nongovernment acute care hospitals in California to determine the
incidence of "disability caused by health care management." The
study determined that a medical injury occurred in 1 of every 20 hospital admissions. The authors estimated that 17 percent of these medical injuries, or 1 injury for every 126 hospital admissions, was caused
by provider negligence.
The CMA invesdgators could not determine whether pauents
whose records revealed negligent medical injuries actually brought
claims for those injuries. Using data from the Nauonal Associauon of
Insurance Commissioners (NAIC) on paid and unpaid medical injury
claims brought in California from July 1975 through December 1978,
Danzon produced rough esdmates of the number of claims filed per
negligent injury and the proportion of those that were paid. Danzon
estimated that "at most 1 in 10 negligent injuries resulted in a claim
and of these only 40 percent received payment." This analysis estimates that only 1 in 25 negligent injuries resulted in compensation
through the malpractice system.
20
21
Synthesis of Existing Research on
the Medical Liability System
Does the system compensate adequately and fairly?
22
1
Theore ically, any patieni who suffers a negligent iairogenic injurv
coidd l.e compensated under tbe current liability system. But what
really happens? Do negligently injured patients receive compensation
from the malpracuce sys em? Are large- numbers of palienls filing frivolous medical claims to force nuisance settlements from insurance companies? Are more and more patients suing when the medical result is
less than perfect, even ihough there is no negligence on the part ol
tbe physician?
Regrerttably, only In dted dala are available to answer t|uestioii
aboui ther adequacy, freqi ncy, and legitimacy of compensation undei
tbe cunent malpractice .\stem. The work that has been done fall,
into two groups. The fin group attempts to estimate the univers •
potential t l ; mants and o compare that number with those acti a
receiving c ipensadon The second group looks at ther pattern
<
claims made, and whether or not the claims have been success u
compc. and. Although neither approach fully resolves the utiderl i
quest in v each makes a substantial contribution.
The New York/Harvard study. More recent estimates from data obtained
by the Harvard Medical Practice Study group, al the request of the state
of New York, are comparable to those from the California study. Tbe
New York/Harvard study, which reviewed more than 30,000 hospital
records, again found that about 1 percent of bospital admissions involved a negligent injury to the patient. In addition, tbe study showed
that 8 Umes as many patients suffered a negligent medical injury as
filed malpractice claims. Because only half of all malpractice claims
resulted in any payment, 16 times more patients suffered negligent
injury than were paid claims.
As with the Danzon estimate for California, the New York/
Harvard data published to date do not show whether those who received compensation actually suffered from a negligent injury. There
is a widely held belief that a significant percentage: of paid claims are for
cases in which there is no evidence of negligent c are. As the researchers
suggest, a case-by-case follow up from hospital discharge could determine when negligent medical care led to liiigation.
23
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Health Polin and Management
Comp risoiis of the CMA and New York/Harvard data, whicli
were obtaii.ed a decade a| art, show a strikingly similar pattern oi
undei utili/aiion of the cm ent malpractice syslem, even for severe
negligent injury. Both studies suggest that a substantial majority of
victims of in-hospital medic: I negligence do not even seek compensation from the malpractice s\ stem, and that few of the claims that are
brought result in any compe ition. Thus, the data refute beliefs that
far more disgruntled patients ing and win questionable suits than the
number of persons actually si.ffering negligent injury. The data also
strongly support the view thai the costs of currently compensable (but
largely unpaid) medical injuries far exceed the costs of those claims
now being paid by the malpractice system. Because it was not possible to determine whether those filing—or even winning—suits had in
fact been negligently injured, the research done to date has left lhat
question unanswered.
Some researchers, incln .ig Danzon, conclude that the malpractice system is not working . • intended i f significant numbers of ap>
parently negligent injuries . e not compensated. There is litde data
to indicate why injured pad. is choose not to sue. Many small claims
may not be filed because th legal costs would be too high in view
of the probable return. Con.istent with the belief that obtaining a
large award through lidgation is a function of padent disability, lost
wages and earning capacity , and life expectancy, the New York data
indicate that persons with i linor injuries or limited life expectancy
did not seek compensauon om their practidoners. Danzon's figures,
however, show that at mosl • ily one in seven patients incurring major
permanent disal .ilities filed suit. Thus, failure to bring small claims
does not explain the inadenuate frequency of compensation.
Conclusion: Potentially compensable injuries far exceed claims actually filed
undei the currei l system.
What is the pattern of claim i npensation under the current system?
Cases droppnl. D i/on sugge s that claims are dropped when tbe plaintifTs costs ..I' | i suing an ward exceed the potential value of tlu
award, rims, th likelihood •!'a small recovery or high costs suggests
that (he suit will oe dropped. I his analysis also points to the "high fixed
costs of participating in the gal process" as a major barrier to recovery for small claims. Becai s.: ihe present value of an award decreases
over time, court congesUon and statutory limits on the proportion of
24
Medical
•
ce
321
the recovery that can go to the plainuffs lawyer are other factors that
may cause claimants to drop small cases.
Cases settled. Danzon has drawn a number of conclusions on the question of how claim compensauon works under the current system, based
largely on earlier work done with L i l l a r d .
Danzon reports that more
than 90 percent of all medical injury claims are setded out of court,
with payment made to the padent in about half of these cases. The
50 percent payment rate for setded claims seems to ref ute the belief
that insurance companies setde many claims simply to avoid lidgadon.
Setdement decisions are believed to be made by evaluadng the
plaintiffs chances of winning in court, the amount of damages sought,
and the costs of litigating through to an award. Because the chance
of winning the case is believed to be a major factor in setdement negotiations, legal standards of liability enter into setdement strategies.
Danzon states, however, that "[c]ursory evidence seems to suggest that
the outcome of the settlement process bears little relation to the potential outcome i f the case were tried to verdict." She estimated that, in
her study, between 39 and 53 percent of claims dropped without payment (some 20 to 25 percent of all claims) would have won a verdict in
court. In those cases in which payment was made al setdement, Danzon
estimated that from 57 to 77 percent would have won a verdict. This
means that about 30 to 40 percent of claims paid at setdement would
have lost in court, while about 40 to 50 percent of claims dropped
without payment would have won. Clearly, these estimates raise serious
questions about the fairness of the settlement process in a substandal
minority of cases. In addiuon, they point to the somewhat surprising
finding that the process may be slighdy more unfair to plaindffs with
legally valid claims than to defendants who would have won at trial.
25,26
27
28
Claims litigated to court awards. Danzon found that the strongest predictors of claims being lidgated through to verdict were the size of
expected award and the severity of injury. The chances of winning an
award were highest where a fatal injury occurred; odds also increased
if the injury caused permanent disability. She also repo: led that in the
CMA study the likelihood of negligence increased from 8 percent of
minor injuries lo 83 percent of severe nonfatal injurie s.
Danzon's dala also reveal lhat plaintiffs alleging instances of obvious treatmeni error (tbe classic case is leaving surgical supplies or tools,
which show up nicely on x-rays, inside patienu; during surgery) had
the highest chance of winning. Allegadons of misdiagnosis or failure
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to obtain infonned consent bad lower success raies, perhaps because
such cases arc harder to prove.
T aken togethe r, these fnulings suggest that willingness to litigate a
case to a verdict is related to il: likelihood of medical negligence. This
runs counter to tin belief thai • jured parties receive compensation for
nonnegligent injuries because juries are unable to make complex delerminations of medical negligence and simply seek to transfer wealth
Irom physicians and insurance companies to injured patients and their
families, regardless of fault. In Danzon's view, even the limited data on
liabilily "clearly refute the exu tne charge that juries compensate without regard to fault in cases oi severe injury."
29
y-ize of awards. Tbc plaintiffs in Danzon's siudies had about a 30 perceni
c hance of winniiu. if they lidgated the claim. More recent research suggests that this rale might have increased to about 40 percent or even
50 percent. The average award at trial, however, is much higher than
paymenis in cnu-of-court settle ments. Moreover, a few claims (about
5 percent) aecoum for aboui one-half of the total money paid oul.
Although ihi majority of awards were not this large, malpractice jury
awards in two jurisdictions in the early 1980s averaged well over $1 million, and the average award across a range of California jurisdictions
was $450,000. "Danzon font. I that the larger the claim, the wider the dollar
gap between the a dement and the "shadow verdict," the amount ihe
plaintiff might have won at trial. She points out that this gap between
setdement and vet lict appears to be consistent with the belief that the
malpractice system undercomj ensates large claims and overcompensates small claim Nevertheless the overall distribution of payments
parallels that of injury severity a ul compensable damages, in her opinion dispelling "extreme charges. ..that the system is arbitrary and
inequitable.""
Finally, the role of posttrial adjustments must be taken into account. Defendants who have lost at trial can reopen settlement negotiations with plai mif f s who arc anxious to avoid delays in colle ction
due to lengthy appe als. Shanley and Patterson found that in most of
the medical malpractice cases tbey studied, plaintiffs saw their awards
reduced by the court or by posttrial settlement agreements to only
two-thirds of w hat juries awarded them at trial. For large verdicts of
$1 million to $10 million, the linal award was only 61 percent of the
oiiginal verdict.
30
:
:,a
34
323
Conclusion: It appears that a substantial majority of the compensation
awarded does go to parties who have meritorious claims under
current negligence principles.
Is the current system too expensive?
Data compiled in 1989 for the American Insurance Associadon (AIA)
compare the growth of costs in all kinds of personal injury cases in
the United States with increases in the cost of U.S. government social
programs and personal injury costs in 12 other countries. The study
shows lhat in 1987 the cost of tbe liability system reached $117 billion
dollars, up dramatically from costs of $500 million in 1930. Adjusted
for inflation and compared in constant dollars, personal injury costs
increased by a factor of 13.8 between 1950 and 1987. Worker's compensation costs rose by a factor of 9.7 during the same time period.
In comparison, total U.S. government expenditures increased during
this ume by a factor of 5.3, and public welfare expenditures increased
by a factor of 9.7.
35
Interestingly, injury compensation appears to have exceeded the
growth rate of general expenditures. The study shows, however, that
government expenditures on health care increased almost as much as
personal injury costs rose. Between 1950 and 1987, health care expenditures increased by a factor of 12.8. Only social security expenditures
outpaced those for personal injury, increasing by a factor of 17.3 between 1950 and 1987. Since 1980, however, the study shows that personal injury costs have continued to escalate at about double the rate
(10.6 percent) of social welfare expenditures, including health care
(5 percent) and social security (4.2 percent).
When compared with the personal injury expenses incurred by
other major European countries, Australia, and Japan, U.S. expenditures are three to eight times higher, as measured against GNP. U.S.
expenses exceeded 2.5 percent of the GNP. Switzerland has the second
most expensive personal injury system after the United Suites, at about
0.8 percent percent of the GNP, with the remaining 11 countries in
the study at about 0.5 percent of GNP. As early as 1965, personal injury expenses in the United Stales were double the average noted for
other free-market economies. However, since that lime, the costs in
other countries have remained stable while those iu the United States
increased to five times more than the average in other countries.
One highly relevant caveat is that the figures reported are gross
costs that do not take into account any benefits lhat might be derived
from the legal system—such as deterrence of negligence. Even more
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Medical .^^^tice
imponant, the study throws into question the inclusion of the United
Stales in ci nss-naiional comparisons of personal injury costs, noting
that because the U.S. "social welfare system is smaller than that of am
other country studied, one <; n argue that the liability system is simply
filling the gap created by inadequate government social programs."^
In other countries, the brunt of the costs of future medical care for
negligent medical injuries may well be borne by the health insurance
system rather than the liability system.
The relalive thinness of ihe social welfare programs in the United
States is one of several factors cited in a recent comparadve analysis of
malpracuce experience in the United States and Canada. In Canada,
the financial costs of any heallh care necessitated by medical injuries
are recoverable through lidgation, but they are payable to the health
care system raiher lhan the injured parly. Since such expenses are
covered in any case by the public health insurance plan, they create
no added incentive for injured pauents to sue.
37
Insurance premiums
Several sources estimate that only 50 cents of every premium dollar reach injured patients. From this amount, patients often pay half
to their lawyers under the contingency fee arrangement. The other
50 cents is spent on insurance company costs and litigation. Other
compensation systems return far higher portions of each premium dollar to beneficiaries. For example, the AIA study estimates lhat worker's
compensation returns 70 cents, health insurance returns 85 cents, and
social security returns 99 cents for each dollar the system requires to
provide compensation. Recent esdmates of what physicians pay in premiums for malpractice insurance include $2.4 billion for 1983, $2.7 billion for 1984, $:(.8 billion for 1985, and $5 billion for 1988. - Premiums vary greatly by medical specialty and geographic location.
;
38
41
As noted above, the Canadian experience with malpractice claims
differs from lhat in this country. Medical care costs are covered by
the comprehensive Canadian health insutance system, and there are
substantial differences in tbe way the malpractiet; systems in the two
countries operate. Canadian physicians are about one-fifth as likely
to be sued as their counterparts in this country. Tbe net resuk of
all of these factors is lhat Canadian physicians pay substantially lower
premiums for malpractice insurance.
Some argue that malpractice premiums are principally determined by the overall economic condition of insurers rather than the
charaderistics of the legal system. Profitability of medical liability
42
i:i
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insurance, as estimated by die U.S. General Accounting Office, depends on tbe way industry reserves are calculated. The medical malpractice line from 1975 through 1985 appears to have suffered losses
of $653 million i f industry-approved accounting principles are used,
but it yielded a profit of $2.0 billion i f the rules under the tax code
are applied. Profitability of tnsurance companies often depends upon
investment of reserve funds rather than premiums charged.
The proportion of the total cost of physician services represented
by liability premiums grew from 3.1 percent in 1982 to 4.8 percent in
1989, at a growth rate exceeding other pracuce expenditures such
as medical supplies and office expenses. When compared to total
health care costs, however, physician and hospital liability premiums
have remained relatively stable over time, averaging about 1 percent
of touil health care costs.
45
46
47
Defensive medicine
It is frequently claimed lhat physicians perform or order unnecessary
tests or procedures to strengthen their ability to mount a successful
defense in a potential lawsuit; hence the term defensive medicine. The
American Medical Association (AMA) has conducted several studies of
ibis phenomenon, and has made widely publicized and widely criticized estimates of the resultant increased costs of health care. As long
ago as 1984, the AMA estimated that defensive medicine and defensive administrative cosls totaled $15.1 billion annually. More detailed
information, however, reveals lhat many praedces ascribed to defensive medicine, such as maintaining more detailed patient records and
referring more cases to other physicians, might be needed to provide
adequate medical care.
Whether or not the amount of money spent in our currenl system
is seen as too much depends largely on whelher one believes it is spent
appropriately. One factor is clear: the money is not buying adequate
compensation for all negligently injured parues. As noted above, there
are many more worthy injured patients than claims. The data from
both the CMA and the New York/Harvard studies show a vast reservoir
of potential medical injury plaintiffs. In addition, it is clear that only a
f raction of what is being spent gets to injured parties. Danzon estimates
thai for every dollar that goes to plaintiffs in compensation, about 66
cents are spent on litigation expenses.
These figures illustrate the high transaction costs of resolving
medical injury claims through litigauon. Danzon noles that the plaindff and defendant spend roughly the same amount for litigauon expenses, but plainuffs spend reladvely more on higb-siakes cases and
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50
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Health Policy and Management
Medical Malp
tlu- defensr more- on small cases. Data Irom closed claims Irom 1975
through 197M reveal that insurers paid only about " percenl in defense
>
expenses when awards exceeded $100,000, but they spent more in defense expenses than in payouts when the awards were less than $4,000.
This practice of spending more to defend than to pay off a small
claim, Danzon states, is rational only if such a policy deters other
claims. Thus, contrary to the popular view that insurers settle easilv
to avoid fighting small nuisance claims, it appears that defense cosis
are disproportionately allocated to fight small claims. Without these
particular iransaction costs, the reservoir of potential claimants mighl
well find its way to filing claims.
Researchers for the RAND Corporation have compiled figures
showing net plaintiff compensation and other costs as a percentage
of total expenditures in average nonautomobile personal injury claims
fot 1985. Plainiilfs' net comp nsation totaled 43 percent of expenditures. Defense costs amounted to 18 percent; claims processing costs
were 2 percent. Plaintiffs legal fees and expenses came to 20 percent.
Costs related to use of the court system were 2 percent of total expenditures. Costs of defendants' time spent in litigation came to 12 percent;
plaintiffs' time cosis came to 4 percent.
Finally, there is a perception that one of the serious financial
costs of tlu currenl medical liability system is the high pric e of clogging the judicial system with malptactice cases. One- study revealed,
however, that only a relatively constant 10 percent of c ivil filings over a
ten-year period were negligence cases of all kinds. Although tbe data
do not permit precise estimates, tbe proportion of personal injury
cases alleging medical malpractice is modest at best. At least two-thirds
of personal injury suits involve auto accidents. Overall, medical malpractice litigalion accounted for less than $2 billion in compensation,
compared with $20 billion io $25 billion in all negligence litigation.''
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52
3
Conclusion:
lli^h transaction costs appear to be a greater problem than total
CD- •\.
How well does ,ae system deter carelessness and injury?
Since i l is clear that tbe currenl malpractice system does not compensate more than a tiny fraction of negligently injured patients, and lhat
it uses up substantial resources in compensating those wbo do benefit, it is imponant lo know whether other societal benefits offset these
cosls and limitations. A critical question is whether or not the cunent
system contributes to the quality of care by deterring carelessness and
327
injury. In particular, is there any relationship between a finding of
negligence or payment of a settled claim and physician behavior?
Unfortunately, research on these points is very limited. The research that does exist traces three somewhat different paths. The link
berween claims paid and physician behavior has been phrased in two
ways, either in terms of behavior subsequent to suit or in terms of
defensive medicine in anticipation of suit. Another approach to the
question of deterrence is to explore any correlation beiween malpractice experience and other indicators of quality of c are.
Defensive medicine has been defined as "medical pracuce induced by the tbt eat of liability. It represents a deviation from what
tbe physician believes to be appropriate medical prac tic e as a result of
a fear ol being sued." Defensive medicine is inherently difficult to
measure. Although physicians of ten ascribe medical care cost increases
to behaviors forced on them by the negligence system, they are reluctant to identify specific practices with specific patients as deviations
from what they believe to be appropriate medical care. Rather, they
are more likely to characterize these decisions as poientially beneficial
to patients, but at the margins. In addiuon, physicians in a fee-forservice setting may benefit financially from doing additional tests or
procedures, thus il is dif ficuli to determine whether tbeir behavior was
influenced more by financial interest or by liability fears. Ideally, such
determinations would be based on independent judgments of whether
or nol care was excessive, but development of scientifically accepted
medical practice guidelines is still at an early stage.
In spite of these complexities, numerous qualitative and quandtative estimates of def ensive medicine have been attempied. Surveys of
physicians reveal practice changes that they attribute, at least in part,
to their perception of the likelihood of their being sued. Obstetricians
and family physicians, in particular, are reported to have eliminated
obstetrical services or to have reduced care to high-risk women because of fears of litigation.
The distinction between perceived risk and actual malpractice
experience is importanl lo emphasize. Sloan and colleagues demonstrated lhat physicians wbo had had adverse malpractice claims experience were not more likely to change their practices. The New
York/Harvard study mentioned earlier found thai physicians who perceived themselves to be at greater risk of suit did change tbeir practices, but that their perceptions of risk were exaggerated. The New
York/Harvard study also found that a specific lawsuit did not appear
to produce long-term practice changes. Similarly, having established
54
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57
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/". >ruving Hmllh Polir: and Managrmmt
Medical Mali
;
that "tJie raic of claims bears no relationship to ihe decision of linnily
physicians to quit obstetrics," Rosenblatt and colleagues state the issue
succinctly:
It is not the individual malpractice claim that persuades the physician
to quit practicing obstetrics so much as the cumulative effect of many
irritants and disincentives: the cost of purchasing malpractice insurance,
the global risk of being sued, and a general rise in the level of tension
in the obstetrical suite.
58
This conclusion is reinforced by reports of defensive medical behaviors in Can ida. Concern about litigalion was a prominent reason
cited for practice alteradons such as increased diagnostic testing, more
documentation of services delivered, and reductions in the scope of
practice. These behavior modificadons precisely parallel those reported in the United States, in spite of the fact that Canadian physicians are only one-fifth as likely to be sued as phvsicians in the Uniied
States.
One worrisome, though inconclusive, finding with respect to behavior sul ••quent lo suit is that physicians with high paid claims frequency ate likely to continue to have high paid claims frequency in the
future.''" If this were clearly an indicator of unsuccessful deterrence,
it would be a troubling finding; however, the available data could not
resolve the question of whether or not the physicians wilb high claims
payment rates were less competent.
Substantial conflicts have occurred over estimates of tbe prevalence and cosis of defensive medicine. The New York/Harvard study
found a weak associauon between the likelihood of suit and a hospital's costs, but the study could not determine whether tbis represented "greater efforts to | revent i n j u r i e s . . . or wasteful defensive
medicine."
Finally, some have looked at whether any relationship exists between claims experience ami other proxy indicators of quality ol care.
Sloan and colleagues found litde consistent relationship beiween adverse claims experience and variables such as board certification, foreign medical school graduaiion, ranking of medical school attended,
solo practice, whether physi' ians engaged in at least some research or
teac hing, and era of graduation from medical sc hool. Some boardcert il ied groups actually had relatively poor claims experience. One
suggestive finding is that phvsicians with very high payments had twice
the rate of state: licensure disciplinary acdons as physicians with no
paid claims, but the rate an I severity of such sanctions were very low.
59
61
62
Conclusion:
329
'llie degree oj deterrence is uncertain.
Have state reforms improved the system?
Within the past 15 years, every state in the United States has enacted
some type of statutory reform of the negligence liugauon system.
The reforms have been designed to correct perceived defects that allegedly permitted dramatic increases in the frequency of medical injury
claims and the severity of awards during the past two decades. It was
hoped that by stemming the increases the reforms would stabilize the
malpractice insurance industry.
Enacted reforms fell into two major categories. One group erected
barriers to lawsuits by making i l more difficult for plaintiffs to file and
prove claims. The other limited the amount of obtainable damages.
Research on the effects of these legisladve enactments has major limitations and in general has produced few surprises.
The United Sutes General Accoundng Office conducted a series
of case studies to evaluale the effects of malpractice reforms in six
states. Two types of information were collected. The leading medical malpractice insurers furnished informadon on the frequency of
malpractice claims, the size of awards and setllemenls, insurer costs
to investigate and defend claims, and the costs of malpractice insurance. QuesUonnaires designed to o b u i n views on tbe effects of reform
were sent to the following six interest groups: (1) physician associations, (2) the hospiul association, (3) the bar association, (4) the trial
lawyers association, (5) medical malpracuce insurers, and (6) sute insurance departmenis. Although some effects were noted by one or two
groups in a few of the states, there were no consistent opinions that the
reforms had had a major effect. The only strong findings were in Indiana, where four oul of six interest groups felt that the reladvely severe
cap on damages had reduced the severity of claims paid, and three of
the six believed that the pretrial screening process had reduced the
number of claims that went to trial.
Several studies have used claims and insurance d a u aggregated
across sutes to evaluale the eff ects of specific reforms on medical injury claim frequency, award size (severity), and insurance premiums.
Generally, the studies have used regression analysis to attempt to separate lhe effect of reforms from the effects of a wide range of other
potenually explanatory variables. Both Sloan and Danzon examined
reforms shordy after enactment. Sloan looked at the effect of the reforms on malpracuce premiums for nonsurgeon generalists, ophthalmologists, and orthopedic surgeons. Danzon estimated their effects on
63
64
65
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lm
!f IIrultli Polin
ind
Mi'ilunl ;
Mtin/ii;niiri:l
( laim frcqiH-nrv and scverin and later repeated that study with data
representing a ' aiger lime | >eriod. " '*
Sloan, M( . ^enhagen, and Bovbjerg examined the effects o f reforms enacted by slates d u r i n g the 197()s on lhe severity and length
of individual claims i e s o l u t i o . i . Zuckerman, Bovbjerg, and Sloan extended Sloan's original study to examine the effect o f reforms on the
insurance premiums f o r general practitioners, general surgeons, and
obsteiries-gynecology specialists f r o m 1971 to 198 6 .
They also built
on Danzon's work to study the effects o f reforms on claim frequency
and severity.
Several other studies use actuarial and expert o p i n i o n to evaluale
die effects o f reforms. Hamili >n, Rabinoviiz and Alschuler, Inc., evaluated eight generic reforms in 24 states by using the opinions o f expert
claims examiners wbo compaied the value o f six personal i n j u r y claim
scenarios wiih and without the r e f o r m e f f e c t s . None o f the scenarios
involved m< dical malpractice
(>(>
t
69
70 7 1
72
•lief
331
ar range mc 1 1 that generally prevails as a matter ol c ustom in U.S. per1
sonal i n j u r v litigalion. Many states have enacted sliding scales or a
m a x i m u m percentage that a lawyer may obtain t h r o u g h a contingency
arrangement, however.
T h e Zuckerman, Bovbjerg, and Sloan study f o u n d that limits
on attorney fees affected claim severity but not premiums or claim
f r e q u e n c y . T h e result was an u n i n t e n d e d average increase in severity. Tbe authors tentatively suggest that this result may have occurred
because attorneys, who experience about the same fixed costs i n preparing a malpractice claim, are screening out the small claims and
concentrating iheir efforts on large claims. H a m i l t o n , Rabinoviiz and
Alschuler, Inc., projected no m a j o r effect o f fee limits o n claim severity,
and Sloan f o u n d no effect o n p r e m i u m s . 77
78
79
73
These suuli generally indicate that state r e f o r m efforts have bad
mixed results. T l limitations on damages reduce the size o f payments.
In particular, pla ng a cap on damage awards and r e q u i r i n g awards to
be offset by paymenis f r o m soi ices outside the malpractice system have
been the r e f o n n wnh the gre. test impact on claim severity. W i t h some
exceptions, ilie harriers to sn I , particularly shortening the statute o f
limitations, may reduce the number o f claims. A brief rlesct iption o f tbe
major i c f o r m s and ihe literal ue on their impact on the malpraciice
system follow .
Pretrial screening panels. Some stales have enacted legislation providing
f o r mandatory or voluntary screening o f medical claims before a suit
is filed. Generally, panels are composed o f three or more persons w h o
may be physicians, other health care providers, attorneys, j u d i c i a l o f f i cers, and lay persons. T h e panels are designed to discourage baseless
claims before they are brought lo court, and to encourage settlement
of meritorious claims.
This r e f o r m has been f o u n d largely ineffective in reducing claim
frequency because the panels have no b i n d i n g effect on c laimants and
may aclually increase the costs of resolving medical claims by a d d i n g
procedural s t e p s .
Not only d i d pretrial screening panels fail to reduce compensation to plaintiffs, making such panels mandatory actually increased average claim payments by over 50 p e r c e n t . ' Pretrial
screening panels d i d reduce lhe time f o r claim resolulion by about
one year in one study, but tbey increased the period in two other
studies. " '
One potential benefit o f pretrial screening is a reduction o f liability insurance premiums, predicted to be as much as 20 p e r c e n t . I t
is not clear why panels would reduce premiums but n o l average claim
payment. Mandatory screening panel laws i n some states have been
struck down because ihey impair a p l a i n t i f f s consiitulional r i g h t to a
speedy irial.
8081
Harriers to suit
82
I'rivolmis suit penaltirs. To eliminate the f i l i n g o f frivolous suits and
ihe assertion of meritless defenses, many slates have enacted penalty
statutes lhal requite the part, asserting a meritless claim or defense
to pay the other party's attorney fees and court costs. Sloan, Mergenhagen, and linvhjerg f o u n d tl i frivolous suit penalties providing for
an award of litigation costs am attorney fees to the w i n n i n g party d i d
t educe claim severity, but t l u . raised the concern that this might be
the result o f pressuring clain.ants who had strong cases but limited
funds to settle early. " H a m i l t o n , Rabinoviiz and Alschuler, Inc. f o u n d
no effect on claim severity ol frivolous suit penalties. Zuckerman,
I.ovbjerg, and Sloan f o u n d th. t frivolous suit penalties had no effect
on frequencv. severity, or p r e m i u m s .
7
1
75
76
Limits on attor my fers. A b o u l 30 lo 50 percent o f a padent's damage
award is paid to the patient's lawyer(s) under the- contingency lee
8
83
1 85
86
Statute of limitations. Each state has a statute o f limitations that limits
the lime p e r i o d d u r i n g which p l a i n u f f s may file a lawsuit. Since the
mid-1970s, most states have enacted changes in their medical liability
statute o f limitations, such as shortening the time periods i n which a
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Impromf^nmllh Policy and Managemmt
Medical
lawsuit may be filed or changing the discovery rule for latent injuries
and suits brought by minors.
Shortening tbe statute of limitations and the discovery period by
one year has been estimated to reduce general surgeon medical liability
insurance (jremiums by 3.7 and 1.3 percent, although an earlier study
had predicted no such reduction. ' One study resulted in the interesting but unexpected finding that the statute of limitations reform
increased rathei than decreased frequenc v and the authors cautioned
that the model performed poorly at that point. An earlier study had
demonstrated the expected reducdon in claim frequency, however,
with far more claims excluded as statutory periods grew shorter and
shorter. Shortened statutes of limitation had no demonstrable elfect
on claim severity.
87
88
89
90
Malpr
333
have had only a minimal role in causing the injury. Expert claims examiners did not predict major reducdons in claim severity from such
legislation.
98
Periodic payment of awards. In an effort to reduce the overall costs associated with paying damages, pardcularly very large sums, some states
have enacted legislation that allows a defendant to pay out the award
in installments rather than paying the full sum at once. Claim size was
not found to be affected by the presence of periodic payment rules in
any of the studies that examined their effects.
99
91
92
Reducing damage awards
Ad damnum clause. To reduce potendal publicity rc garding the case and
prejudice to the jury, many states have prohibited plaintiffs from using
what is called an ad damnum c lause to claim sp! cific dollar amounts
when filing the lawsuit. Linn ations on ad damnum clauses were not
found to reduce claim size o, insurance premiums. '
93
94
Collateral sounr rule. Under the tradidonal collateral source rule, a
plaintiff can recover damages from a defendam even if most of the
plaintiffs economic losses w< re reimbursed b\ insurance or government benefits. Many states n- w require a plaintiffs damage award to
be offset by such collateral • i npensation.
Since it directly reduces he payment to the plaintiff through the
legal system, the modified co ateral source rule has generally had the
effect of reducing claim sevei \\, which is not surprising even ihough a
survey of expert claims exan mers had not predicted such a result. Nevertheless, modifying the collateral source rule had no effect on
,97
insurance premiums
95
96
Joint and several liability rule. A ither traditional liugauon rule permits
a plaintiff who prevails again i number of defendants to recover the
full amount of cl images fron
iy one or any combination of the negligent parties. Some states b;. enacted legislation limiting recovery
from multiple defendants to te amount equal to each defendant's
proportional responsibility. I hese statutes are designed to avoid encouraging the plaintiff to in lude a "deep pocket" defendant with resources to pay the full recovt ry costs, even though that defendant may
Limits on damages. Many states have enacted ceilings on the amount of
economic, noneconomic, and punidve damages a jury may award to
a plaintiff. Others have prohibited the award of noneconomic damages and puniuve damages. Some of these statutes have been declared
unconstitudonal, but most have survived such challenges.
The strongest evidence of a reform having its intended efTect is
found with respect to such statutory limits on damages. In general,
claim severity is reduced when limits on the amount that can be paid
are enacted.
In addition, insurance premiums appear to be lower
in jurisdictions that have enforced such limits.
100
101
Conclusion:
Limiting damage awards and requiring collateral offsets reduces
payments in negligence cases, but other reforms have had limited
or even unintended results.
Malpractice Research Agenda
The 1987 report to the Secretary of the Department of Health and
Human Services by the Task Force on Medical Liability and Malpractice included an extensive list of research issues that ate still quite
pertinent. ' Tbe task force noted that, in spite of a number of recent
research reports, it found "subsuntial knowledge gaps, limiudons, and
imperfections" and recommended research that "would deepen undersunding of die issues related to medical liability and malpractice and
provide guidance for policy making."
These goals—to deepen undersunding and provide guidance for
policymaking—are quite disdnct and might well lead to quite different
priorities for research. For example, public policymaking in the past
15 years with respect to medical liability was dominated by sute reforms. These dramatic changes in the liability system were enacted
10 2
103
�334
Imfmn
Medical Mnlpia
Ith Policy and Management
with virtually no research completed or even planned to assess their
likelv effects. As a result, research in recent years has been dominated
by admittedly imperfect after-the-fact attempts to trace tbe results of
legislation already on the books.
What we havi- had, then, has been research largely undertaken to
"deepen undei standing" of actions already taken, not to "provide guidance lor policymaking." A great deal of research needed to deepen
undei standing has been identified in detail by the Task Force on
Medical Liabilit and Malpractice and others, and still more could
be conducted. Tlu: range of needs for such research is described below. Research to guide polic ymaking, however, requires an assessment
of the policymaking environment and a strategy to influence that environment. This chapter concludes with an attempt to sketch such a
strategy.
Returning to the four original questions for research, there is
substantial knowledge available on some, with far more limited knowledge available on others.
Does the system compensate adequately and fairly?
The question of how the incidence of compensable injury compares
with the frequency of compensated victims has been largely resolved,
at least with respect to hospitalized patients. 1 he massive efforts represented by the California Medical Insurance Feasibility Study and tbe
New York/Harvard study clearly established the disparity between tbe
large universe of potendal claimants and the small pool of people
compensated. There is no pressing need to repeat such studies.
The same is not true tor patients seen in nonhospital settings,
however. Research on this group might seem a relatively low priority,
since hospitalized cases dominate malpractice claims and payments.
Because the universe of medical injury out of the hospital selling has
not been identified, however it is impossible to say lor certain whether
lhal group represents a serious problem with respect to undercompensation of injured persons.
T he ai tempt to determine the pattern of claims compensated
and nol compensated under the current system still presents major
research questions. One significant aspect of this question, which has
been explored but could still benefit from confirmatory work, is the
relalionship between compensation and lhe presence of "true negligence." Contrary to the perception of the medical community, existing
evidence suggests a strong link between these two factors. Insurance
companies seem noi to be so quick to senile baseless claims as many
335
physicians believe. Nor are juries openly flaunting the orinciples of
determining negligence according to medically established standards
of care. Nevertheless, carefully constructed evaluations using medical
experts to judge the caliber of care in cases that do and do not result
iu compensation would be useful in forming more concrete opinions
of the performance of the malpractice system. Data on the rado of
negligent injuries to nonnegligent injuries that aclually result in jury
verdicts would help to illuminate whether or not courts correcdy apply legal standards.
A second major aspect of this issue—that is, determining the adequacy and fairness of compensation from the perspec live of the injured
party—is an even more fertile ground for future research. Exisdng studies show that persons with small claims fare less well than those with
large claims when pressing a claim to a successful resolution. The New
York/Harvard study made a major contribution to our understanding
of the range of economic impact and duration of injuries in hospitals. What has nol been well documented, however, is what the effect
of the underlying injuries is on people's lives, either with or without
compensation.
Another nearly unexplored quesdon is why some people do not
press their right to compensation. I f a greater rate of compensation is
believed desirable, it is important that we learn mot e aboul why injured
patients do not bring claims. What features of the current system act
as barriers?
Is the current system too expensive?
Tbis question depends on one's perspective, and it cannot be resolved
by microanalyses of costs. Overall expenditures have remained relatively stable at aboul 1 percent of total health care costs. From that
perspective, it is difficult to argue that such spending is exc essive. When
one examines the number and relatively low proportion of ncgligendy
injured persons wbo are compensated, or the premiums charged to
high-risk specialists in > une areas, or the noneconomic costs resulting
from adverse percepiii as of potential liability on health care delivery,
however, it might well be concluded that the current system is too
expensive for what it delivers.
One way that lhe cost question could be informed by research
would be through a demonstration project that evaluated whether or
not a different approach could provide greater and more equitable
compensation at no increase in either economic or noneconomic costs.
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Medical Mali
•
'ealth Policy and Management
Such a study would relate costs to outcomes, and would allow a judgment to be made as to whethe current costs are too high.
How well does the system dete carelessness and injury?
Notwithstanding th. substanda. work already addressing this question,
it remains a central area for f ture research. Most of the published
material focuses on the purpoi ied negadve consequences of the current system: de fensive medicine and reductions in se:rvice. Bul e ven
with that focus, additional work is needed. In particular, comparisons
of prac ice panerns in health insurance systems, wilb and without capitated prepayment, could help separate financial iniluences from fear
of liability. Esdmates of negligent care by physicians in the United
States and Canada might well permit a deeper understanding of the
deterrent effect of different approaches to resolution in comparable
medical care setdngs. Similarly, comparisons of practices with and without binding a bitradon or other alternative dispute resoludon (ADRs)
mechanisms might clarify the extent to which physicians practice differendy when relieved of the prospect of being found negligent. ADRs
are private forums controlled by the parties in a dispute. They were developed in the hope of redue ing the costs, delays, and negadve effects
of the need to prove fault by the physician under negligence theory.
Very little has been done to esdmate the positive side of defensive medicine. Two of the most frequently cited examples of defensive
physician practices in studies performed by the AMA are expanded
record keeping and increased referrals to specialists. It is not intuiuvely obvious or empirically setded whether such changes enhance,
impair, or simply disrupt padent care, or even whether they result in increased or decreased net expenditures. Similarly, little is known about
ihe actual qualifications of family physicians and obstetricians wbo have
abandoned obstetric care. Again, i f older or less competent physicians
were withdrawing their services, this mighl benefit padent care.
104
105
Have state reforms improved the system?
Recent research on medical liability has addressed but not resolved this
quesdon. It is clear that limiting and offsetting damage awards reduces
average payments through tbe medical liability system (and perhaps
moderates insurance premiums), and that barriers to lawsuits reduce
c laim fi equency somewhat. The effects of other reforms, however, are
less clear-cut. The limited empirical data on the effect of both frivolous
suit penalues and limits on condngent fees are far less posidve than
might have been pi >jected, based on the Canadian experience with
337
limiting use of condngent fees and imposing high charges e n the losing
party.
It is noi at all clear whether or not reducing claims and payments
has actually improved the system. For example, it has not b Jen demonstrated that defensive medicine or reducdons in service, >r even the
perceived decay of the physician-padent reladonship, have been modified appropriately by reforms. Nor have there been stu lies on the
relative equity and adequacy of compensauon across states with differjnt reforms in place. Finally, there is litde evidence about the effects
of such reforms on the deterrent incendves.
106
Future Directions in Malpractice Liability
There exist extensive opportunities for research to guide policy decisions on the medical liability system, but it remains to be seen whether
or not such guidance will be sought. The current polidcal climate includes strong views on the problem and the corresponding soludon.
If research is to play a role in this policy debate, such views must be
saken into account. The alternadve is likely to be either no change, at
least at the federal level, or more reforms based on political clout and
intuition, rather than on a working knowledge of the likely effects.
The crisis atmosphere that pervaded the mid-1970s and mid-1980s
appears to have abated somewhat—perhaps to resurface in the mid1990s. Medical liability insurance is currendy easily available and likely
io remain so because of the predominance of physician- owned insurers; and premium prices have stabilized or fallen in recent years. The
number of claims filed has followed a similar pattern. As more hospitals
>elf-insure malpracuce risk, pracuce patterns are undergoing scrudny,
md standards of care are being developed and implemented. States
ontinue to bow to pressure from organized medicine by enacting reorms, but not under the threat of impending insurance cancelladons
ir massive withdrawals of physician services.
Notwithstanding tbis relatively steady state, strong interest in furher changes in the liability system condnues from many dil ferent perpectives. As Kapp has noted,
107
different constituencies, coming at this subject from diffciL-nt perspeclives and witl) divergent interests, likely would list difiereni indicators of
"solving" the widely perceived palient injury/liability claims crisis, and
certainly would prioritize these indicia differently. *
101
Ynalysis of tbe different points of view clearly illustraies this point. The
•vidence thai the vast majority of medical injury goes uncompensated
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Policy and Management
is cli ar and convincing, a n d state-enacted b a r r i i rs to suits and limits
o n damages have likely worsened the situauon. A l t h o u g h consumer
advocates are rarely heard f r o m on this issue, this fact is suil a source
of serious concern. The evidence that the negligence system penalizes
physi. ians inappropriately and too frequently is much weaker at best,
but that perception condnues to drive the Amer.can Medical Association io press for a completely d i f f e r e n t approach. Evidence concerning
the financial costs o f defensive medicine and the overall costs of the
medical liability system is inconclusive, b u l healih insurance carriers,
notably Medicare, are increasingly concerned about the p r o p o i tion
o f their spending that goes lor unnecessary care or liability system
costs. Finally, despite meager evidence that the Iault-based system deters careless m i d i c a l practic e and avoidable injc y, the plaintifTs bar
continues lo point out the poiential hazard of e iiminating the deterrence incentives.
A research agenda might have its best chance to influence policymaking i f it took all o f dies, lerspectives into account. For example,
it was noted above that a co
jrehensive study ol alternative dispute
resolution systems would be
,eful in d e t e r m i n i n g whether compensation could be improved v itbout increased cosis. Such a social experiment would require pi ospecdve design, population-based data,
adequate controls, and independent evaluadon. 1 " iis would be very dif1
ferent than designing a retrospective evaluation of previously enacted
reforms, and would be unlikely to be undertaken successfully without
support f r o m patients, pro\iders, insurers, and the p l a i n u f f s bar.
Medical Malprt
4.
5.
6.
7.
8.
9.
10.
For a list o f current and ongoing research projec is related to medical
malpractice, refer to Part I I o f this book.
11.
Notes
1. The term medical malpract ce refers to legal rules that govern liability for
injury and loss caused b;. a medical practitioner Others who provide
professional services, such as lawyers anil accoumants, are also liable to
iheir clients for losses caused by malpractice. The key to determining
liabilily is whether or nol the professional breac iiecl a legal duty owed
to the patient or client.
2. We define medical injury as an unintended physi.-al injury to a patient
caused hy medical care or treaiment, or the lack of such care or irealment.
3. ( nly ci i lain ac tions are deemed negligent by the legal syslem and result
ii. liabilily ul ilie actor to pay for the injuries caun-d. Other actions lhat
12.
339
cause injury may not be deemed negligent. ParUes disputing Hability for
injury may go to court to have a jury determine whether the behavior
causing injury was so careless as to breach the legal duty not to cause
unreasonable harm to another. The branch of law governing liability
for negligence is known as tori law. Tort, meaning twisted, is derived from
Latin and refers to a wrongful action causing injury. Medical malpractice
is a specific branch of lort law.
Private and public sources of insurance for disability and health care may
subsidize or miniini/e the impact of injury cosls.
I l should be noted lhat plaintiffs who win awards do not formally recover
any part of tl>eir legal fees in lhe damage calculations. However, it is
widely believed lhat juries recognize and compensate for this factor by
awarding large sums for noneconomic damages.
Scholars have been critical of the tort system's coinpens ition theory,
pariicularly the premise (hat certain lives, e.g., those with aigh earning
capacity, are worth moie than oihers. See R. I . . Abel, "A Criiique of
Torts," UCUi IMW Reuieia 37, no. 5 (1990): 785, 79ti-97.
M. G. Shanley and M . A. Peterson, Posttrial Adjustments to Jury Awards,
R-3511-ICJ (Santa Monica, CA: RAND Corporation, 1987).
As with deterrence, the "punishment" of paying money damages for injuries caused is greatly ameliorated by the insurance mechanism.
Few physicians, howeve r, are subject to such serious disciplinary measures as a result of competency issues. The majority of disciplinary cases
brought by state licensing boards against physicians involve wriung inappropriate prescriptions. See R. S. Adler, "Stalking the Rogue Physician:
An Analysis of the Health Care Quality Improvement Act," American Business Law Journal 28, no. 1 (1991): 683, 693.
In an effort to improve public accountability of the malpracuce system,
Congress passed the Health Care Quality Improvement Act in 1986. This
act requires the reporting of all payments made to patienu by physicians
or their insurers in setdement of malpracuce suits. 42 U.S.C.A. 11101-52
(West Supplement 1989). See also Adler, "Stalking the Rogue Physician."
For an overview of the malpracuce issue, see Congressional Research
Service, Medical Malpractice.Repon lo the Committee on Ways and Means,
U.S. House of Representatives, WMCP 101-26 (Washington, DC: U.S.
Government Prinung Office, 26 April 1990); G. L. Priest, The Current
Insurance Crisis and Modern Tort Law," Yale LawJournal 96, no. 7 (1987):
1521; G. O. Robinson, "The Medical Malpractice Crisis of the 1970s: A
Retrospeclive," IMW and Contemporary Problems 49, no. 2 (1986): 5; P. M .
Danzon, Medical Malpractice: Theory, Evidence and Public Policy (Cambridge,
MA: Harvard University Press, 1985).
There was an average annual 10 percent growth rate in claim frequency
per physician, and claim severity rose roughly twice as fast as the consumer price index during the decade from 1975 to 1984. P. M . Danzon,
"The Frequency and Severity of Medical Malpractice Claims: New Evidence," IMW and Ctmttrmporary Problems 49, no. 2 (1986): 57-84. The
average amount of professional liability insurance premiums paid by
�340
13.
14.
15.
16.
17.
Improving Het
niinu Health Policy and Managemeni
physicians inc reased from $5,800 in 1982 to $15,5' i in 1989, for an
annual rate increase of n e r 15 percent. R. A. ReynoMs, The Cost of Medical Professional Uability m the 1980s (Chicago: Center for Health Policy
Research, American Medical Association, 1990).
New York limes, 11 June 1989, p. 1, col. 1.
Danzon, Medical Malprai lur, 76.
Association ol Trial Lawye' ; of America (ATLA), The Insurance Crisis: A
Study in Deception (Washin mn, DC: ATIA, 1986).
Shanley and Peterson, Post irial Adjustments, 45.
The actual impact of the costs of medical malpractice on total national
heallh cai e expenditures (estimated at 12 percent of GNP) is not known,
hut it is said "to run into billions of dollars." Testimony of the Honorable
C. A. Bowsher, Comptroll t General of the United States, On Issues Related
to Medical Malpractice: Hu ring before the Subcommittee on Health of the Co/.,
mittee on Ways and Means. U.S. House of Representauves, 26 April 1990,
5. A contrary view is expressed in the Testimony of the President of the
National Insurance Consumer Organization, Hearing before the Covenioi's
lash puree on Medical Malpractice Insurance, State of Colorado, 11 December l'JH7:
II vmi look at the total cosls of the medical malpractice syslem in
Colorado it is an ii expensive system. For example, the latest available daia from the National Associaiion of Insurance Commissioners
(NAK:) shows tolal premiums in Colorado of $20.8 million during
1985. Thai's $6.50 | r person . . . For perspective, the average: American spends $133 di lars per year on tobacco products. Another way
to look al system Co a is vis-a-vis total medical cosls in the state. According to the Colorado Department of Health, Colorado spent
$1,5:U) per capiia on heallh care in 1986. Tims, even if you i apped
medical malpractiee awards at zero, you would only lower the stale's
heallh care costs by .1 percent. I dare say lhal if you had no syslem
to compensate victii s of malpractice and someone offered lo do it
lor you fur a perce it age this small, you'd probably grab i t . . .The
problem is cost all< ation, not total system costs.
18. see P. M. Danzon, T h e edical Malpractice System: Facts and Reform,"
n M. I'.aily and W. Cikiir- ds., The Effects of Litigation on Health Care Costs
Wasliington, DC: Brool
,s Institution, 1985), 28.
19. . >anzoi:. "Fai ls and Rel
,," 34-35.
20. California Medical Ass
tion and California Hospital Associaiion,
Refm l un the Medical l i
ance Eeasibility Study (San Francisco: Sutler
Publications, 1977), 8. ne CMA/CHA study defined medical injury
as "temporary or perm K in impairmem of physical or menial fimclion (inc luding disligur
nt) or economic loss in the absence of such
impairment" c aused by affirmative actions (c ommission) and inactions
(omission) of any health care provider or atle-ndant, whether or not such
actions or inactions cons; itute legal fault." The hospitals and records were
Medical Malpr
341
not randomly selected, although an attempt to choose "representative"
hospitals and admissions was made.
21. Danzon, Medical Malpractice, 22-25.
22. Ibid., 24.
23. Harvard Medical Malpractice Study, "Patients, Doctors, and Lawyers:
Medical Injury, Malpractice Litigation, and Patient Compensauon in New
York," (President and f ellows of Harvard College, Boston, 1990).
24. Danzon, Medical Malpractice, 31.
25. Danzon, Medical Malpractice.
26. P. M. Danzon and L. Lillard, The Resolution of Medical Malpractice Claims:
Modeling and Analysis, R-2792-ICJ (Sanu Monica, CA: RAND Corporation, 1982).
27. Danzon, Medical Malpractice, 31.
28. Ibid.
29. Ibid., 50.
30. M. A. Peterson, Civil Juries in tlie 1980s: Trends in Jury Trials and Verdicts in
California and Cook County, Illinois, R-3466-ICJ (Santa Monica, CA: RAND
Corporation, 1987), 43.
31. Peterson, Civil Juries, 21.
32. Ibid.
33. Danzon, Medical Malpractice, 47.
34. Shanley and Peterson, Posttrial Adjustments.
35. R. W. Sturgis, Tort Costs Trends: An International Perspective (Tillinghast,
A Towers Perrin Company, 1989). The study deies not define tort or
costs. In view of the purposes of the study, however, it is likely lhat tort
includes all personal injury cases, perhaps even workers' compensation
cases that are handled outside of the court system and generally not
classified as tort cases, and that costs include damage awards, litigation,
and administrative expenses.
36. Ibid., 14.
37. P. C. Coyte, D. N. Dewees, and M . J . Trebilcock, "Medical Malpraciice:
The Canadian Experience," New England Journal of Medicine 324, no. 2
(1991): 89-93.
38. U.S. Department of Health and Human Services (DHHS), Report of the
'task Eorce on Medical Liabilily and Malpractice (Washington. DC: U.S. Government Prinling Office, 1987), 169.
39. J. S. Kakalik and N . M. Pace, Cosfs and Compensaiion Paid in Tort Utigaiion,
R-3391-ICJ (Santa Monica, CA: RAND Corporation, 1986), 29.
40. DHHS, Medical Liability and Malpractice.
41. Congressional Research Service, Medical Malpractice, 45.
42. Coyte el al., "The Canadian Experience."
43. The following characteristics distinguish the Canadian malpractice syslem from the syslem in lhe United Slates:
1. Judges typically hear cases wiihout juries.
2. The losing party pays a subsuntial perceniage of the winner's legal fees; in the Uniied Slates, each party bears its own legal fees.
�342
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Iviprowfl^haUh
Policy und Management
Medical Malir
Canadian lawyers rely apon comingent fee arrangements less ihan
U.S. lawyers do.
There is a nationwide limiution of $200,000 (1988 dollars) upon
nonet (.noinie damages pain and suffering; there is no uniform limitation in the United Star G. Hicks, Medical Liability and Compensation
(Seattle: University of
;hington, June 1991), 15-16.
1
44. ATLA. /nsurance Crisis.
45. U.S. General Accoundng • ice (GAO), /nsurance: Profitability of the Medi il Maljiractice and General ability Lines, GAO/GGD-87-67 (Washington,
I'C: GAO, 1987), 8.
46. • 'eynolds, Cosl of Professional Liability.
47. I HHS, Medical Liabihty and Malpraciice, 175.
48. American Medical Associauon Special Task Force on Professional Liability and Insurance, Profess.onal Liability in the '80s (Chicago: AMA, 1984).
49. S. Zuckerman, "Medical Malpractice: Claims, Legal Costs, and the Practice of Defensive Medicine," Health Affairs 3, no. 3 (1984): 128, 131-33.
50. Danzon, Medical Malpractice, 187.
51. Isakalik anii Pace, Costs and Compensation.
52. Ibid., 9.
53. Ibid., 30, 35.
54. Congressional Research Service, Medical Malpractice, 57.
55. Institute of Medicine, Medical Professional Liability and the Delivery of Obstetrical Care (Washington, DC: National Academy Press, 1989); Opinion Research Corporauon, Professional Liability and Its Effects: Report of a
' ^90 Sunny of ACOG's Membership (Washington, DC: American College of
( 'bsteiricians and Gynecologists, 1990); R. A. Rosenblatt, G. Weitlcome,
Ne Lloyd, B. Schafer, L. C. Winterscheid, J. D. Vaughn, and L. G. Hart,
Are Rural Family Physician. Uss Likely to Stop Practicing Obstetrics than Their
Urban Counter/uirts? The linpncl of Malpractice Claims, Working Paper No. 7
(Seattle: WAMI Rural Health Research Center, University of Washington, April 1990).
56. F. A. Sloan. I ' . M. Merge hagen, W. B. Burfield, R. R. Bovbjerg, and
M. Hassan Medical Malpracuce Experience of Physicians: Predictable
or Haphazard?" Journal •>)' the American Medical Association 262, no. 23
• 1989): 3291-97.
57. 1 larvard Medical Malpra. dee Study, "Pauents, Doctors, and Lawyers."
58. Rosenblatt et al., Rural l i.mily Physicians, 14.
59. Coyte < t al., 'The Canad ai Experience," 92.
60. Sloan et al., "F.xperience ;>! Physicians."
61. 1 larvard Medical Malpraciice Study, "Patients, Doctors, and Lawyers," 11.
62. Sloan i t al., "Experience of Physicians."
63. S. M. Spernak and P. P. Budetti, Compendium of State Systems for Resolution
of Medical Injury Claims (Washington, DC: Agencv for Health Care Policy
and Research, 1991).
64. I S. General Accoundng Office, Medical Malpractice: Case Study on Arl-msas, GAO/HRD-87-21.S 1 (Washington, DC: GAO, December 1986);
65.
66.
67.
68.
69.
70.
71.
72.
73.
74.
75.
76.
77.
78.
79.
80.
81.
343
U.S. General Accounting Office, Medical Malpractice: Case. Study on California, GAO/HRD-87-21S-2 (Washington, DC: GAO, December 1986);
U.S. General Accounting Office, Medical Malpractice: Case Study on Florida,
GAO/HRD-87-21S-3 (Washington, DC: GAO, December 1986); U.S. General Accounting Office, Medical Malpractice: Case Study on Indiana,
GAO/HRD-87-21S-4 (Washington, DC: GAO, December 1986); U.S. General Accounting Office, Medical Malpractice: Case Study on New York,
GAO/HRD-87-21S-5 (Washington, DC: GAO, December 1986); U.S. General Accounting Office, Medical Malpractice: Case Study on North Carolina,
GAO/HRD-87-2IS-6 (Washington, DC: GAO, December 1986).
Aggregate data studies may provide more reliable conclusions regarding
tort reform effects than individual state experiences, due to characterisr
tics other than tort reforms peculiar to ceruin slates. See F. Sloan and
R. Bovbjerg, Medical Malpractice Crisis: Response and Effects on Health Care
and Coverage (Washingion, DC: Health Insurance Associauon of America, 1989), 22.
F. A. Sloan, "State Responses to the Malpractice Insurance Crisis of the
1970s: An Empirical Analysis," Journal of Health Politics, Policy and Law 9,
no. 4 (1985): 629.
Danzon, Medical Malpractice.
Danzon, "Frequency and Severity Claims."
F. A. Sloan, P. M . Mergenhagen, and R. R. Bovbjerg, "Effects of Tort Reforms on the Value of Closed Medical Malpractice Claims: A Microanalysis," fiiumal of Health Politics, Policy and Law 14, no. 4 (1989): 663-89.
This study also examines the effects of tort reform on the probability
that a claim will be paid.
S. Zuckerman, R. R. Bovbjerg, and F. Sloan, "Effects of Tort Reforms
and Other Faciors on Medical Malpractice Insurance Premiums," Inquiry
27, no. 2 (1990): 107.
Sloan, "Stale Responses."
Danzon, Medical Malfnraclice.
Hamilton, Rabinoviiz and Alschuler, Inc., "Claim Evaluation Project: Nalional Overview" (Report commissioned by Insurance Set vices, Inc., New
York, 1987).
Sloan et al., "Effects of Ton Reform."
Hamilton, Rabinoviiz and Alschuler, Inc., "Claim Evaluation."
Zuckerman et al., "Effects of Tort Reforms and Oiher Factors."
Ibid.
Hamilton, Rabinovity. and Alschuler, Inc., "Claim Evaluation."
Sloan, "Stale Responses."
Zuckerman el al., "Effects of Tort Reform and Other Factors"; Danzon,
Medical Malpractice.
S. Shmanske and T. Stevens, T h e Performance of Medical Malpractice
Review Panels," Journal of Health Politics, Policy atul IMW 11, no. 3 (1986):
525-35.
�344
Improvin
Polir,
,(l Management
82. Sloan et al., "Effects of Tort Reform"; Danzon, Medical Malprartirr,
D Howard, "An Evaluatii n of Medical Liabilit) Review Panels in Arizona." Slate Court Journal
no. 2 (1981): 19-25.
83. Sloan et al., "Effects of T rt Reform," 679.
84. Ibid.
85. 1 loward, "Medical Liabilily Review Panels"; Shmanske and Stevens, "Performance Review Panels."
86. Zuckerman et al., "Effects of Tort Reforms and Other Faciors," 17(>.
87. Statutes of limitadon generally begin running from the time the actions
in dispute occurred. For example, the statute of limitauons in a medical
malpractice suit would begin running from the date that medical care
or treatment was received Because certain types of personal injury, particularly medical injuries, may be latent and not detectable for several
years, the discovery rule provides for the statute of limitations to begin
n nning from ihe date the patient discovered or should have discovered
tl e injury, even ihough ti e medical actions allegedly causing the injury
o. curred several years eai lier and a suit based upon the date of these
a< lions would be barred by the sutute of limiutions.
88.
89.
90.
91.
92.
102.
Zuckerman et al., "Effecb of Tort Reforms and Other Factors," 175.
Sloan, "State Responses."
Zuckci man et al., "Effects f Tort Reforms and Other Factors," 178.
Danzon, Medid.l Malpracli
Sloan et a)., "Elfects of To.
eforms"; Danzon, Medical Malpi ictice; Zuckerman et al., "Effects of T
Reforms and Other Factors."
Sloan et al., "Ef fects of Toi i Reforms"; Danzon, Medical Mal- ractice.
Sloan et al., "Experience oi Physicians."
Zuckerman et al., "Effects < Ilort Reforms and Other Factors Sloan and
Bovbjerg. Medical Malpract ic Crisis; Danzon, Medical Malpractice, Danzon,
"Frequency and Severity • Claims."
Hamilton, Rabinoviiz and Mschuler, Inc., "Claim Evaluation."
Zuckerman el al., "Effect of Tort Reforms and Other Factors"; Sloan,
"State Responses."
Hamilton, Rabinoviiz and Alschuler, Inc., "Claim Evaluation."
Sloan and Bovbjerg, Medi al Malpractice Crisis; Hamilton, Rabinoviiz and
Alschuler, Inc., Claim Eva'uation; Danzon, Medical Malpractice.
Zuckerman et al., "Effects of Tort Reforms and Other Factors"; Sloan
and Bovbjerg, Medical Malpractice Crisis; Danzon, Medical Malpractice.
Zuckerman et al., "Effects of Tort Reforms and Other Factors"; Milliman
and Robertson, Inc., Actu trial Analysis oj AMA lort Reform Proposals, Los
Angeles, September 1985. \ contrary finding of no effect on premiums
was reported in Sloan, "Si te Responses."
DHHS, Medical liability a,i. Malpractice, 179-204.
103.
II.KI.,
93.
94.
95.
96.
97.
98.
99.
100.
101.
:
181.
104. Congressional Research Se. v ice, Medical Malpractice, 57-61.
105. Arbitration, used frequendy lor the resoludon of disputes between labor
and management, is the most widely available ADR. Many sutes have
Medical Malpn
345
statutes governing the various aspects of the arbitration process. Its distinguishing feature is the presence of an impartial third party that has
the power to arrive al a resolution of the dispute that binds the parties.
Mediation, rarely regulated by staiute, provides lor a tl.ird party who
attempts through skilled negotiauon to bring the parties to a decision.
The mediator has no power lo resolve the dispute or bind the parties.
Florida and Virginia have enacted "no-fault" sututes that provide compensation for vicums of birth-related neurological injuries. Under these
sututes, victims are compensated without the need to prove that the
medical provider was negligent. The American Medical Associauon has
proposed an administrative system for resolving disputes. This procedure
reuins the fault concept but replaces the court system (i.e., judge and
jury) with a sute agency staffed with medical injury experts who have the
power to decide claims. In theory, private contracts between patients and
providers can also address the issue o f compensation for medical injury.
In effect, the provider acts as an insurer against medical injury losses at
a designated level in return for a pauent waiver of the right to sue.
106. Coyie et al., T h e Canadian Experience," 91.
107. The nine teaching-hospital departments of Harvard Medical School developed and implemented anesthesia guidelines in 1986 as part of a major patieni safety and risk-management program. J. H . Eichhorn, J. B.
Cooper, D. J. Cullen, W. R. Maier, J. H . Philip, and R. G. Seeman,
"Standards for Paiient Monitoring during Anesthesia at Harvard Medical School," Journal of the American Medical Association 256, no. 8 (1986):
1017-20.
108. M. B. Kapp, "Solving the Medical Malpracuce Problem: Difficulues in
Defining Whal 'Works'," Law, Medicine & Health Care 17, no. 2 (1989):
156-65.
��Department of Health and Human Services
Louis W. Sullivan, M.D., Secretary
Public Health Service
James 0. Mason, M.D., Dr. P.H., Assistant Secretary for Health
Agency for Health Care Policy and Research
J. Jarrett Clinton, M.D., M.P.H., Administrator
Legal Medicine Program
Kathleen Hastings, J.D., M.P.H., R.N., Director
I or
hy IIK- U.S. Oovi-miik-nl I'rinliiiL' Oll'iiv
Sii]H-iiiiH'ii;k'in oi DiviMik'nK.
sn.p: ssoi'. w^.siiiriuion. DC rimi:-').i;s
ISBN 0 - 1 6 - 0 3 7 8 2 0 - 6
�Abstract
This conference, "Issues in Medical Liability: A
brking Conference," was convened to examine medical, legal, and professional review aspects of medical liability. Panicipants assessed the underlying problems
associated with medical liability; identified current and
promising proposed initiatives to address those problems; assessed initiatives in tenns of what is known regarding their feasibility and effectiveness; and recommended strategies for development of an AHCPR
medical liability research agenda.
Strategies recommended included Medical Process research to improve patient outcomes and quality of care,
and reduce the risk of medical injury; Legal Process research to promote more valid fault determination and injury compensation, and reduce the incentives for defensive medicine practice/inappropriate use of medical
technology; and Professional Review Process research
to improve the security of confidential review activities
and to develop equitable and valid standards of quality,
performance measures, and methods for effective professional monitoring and discipline.
The following summarizes the strategies recommended:
1. Investigate the uniform collection of medical liability information. Examine the feasibility of standardized large-scale data collection on adverse medical
vents, patterns of medical error, provider characteristics, patient outcomes, liability claims, and dispute resotl
lution decisions; disseminate infonnation on medical liability data to improve medical, legal, consumer, and
policy decisionmaking.
2. Centralize information on clinical practice
guidelines. Establish a clearinghouse of information on
practice guidelines, both existing and those under development; increase access to guidelines to encourage their
use by heallh care providers, regulators, comsmners,
and the legal communiiy; refine and disseminate methodologies used for scientifically based guideline development.
3. Examine current medical practice standards.
Identify paiient outcomes common in liability claims
and risk management incidents; investigate causes of
substandard medical piactice and patterns of medical error; validate medical practice guidelines and evaluate
their effects; investigate correlations between payment
decisions, care outcomes, and perceptions of quality by
patients.
4. Explore methods for connecting negligent medical care and legal liability. Investigate barriers to
claims by negligently injured patients; evaluate the effect of tort reforms on aspects of medical liability other
lhan professional liability insurance premiums and
claims frequency and severity; compare and evaluate effects of various alternative dispute resolution mechanisms.
5. Investigate the application of scientific medical
information in the legal process. Investigate standards
for medical expertise used in the liability determination
process; research methods for aligning medical and legal injury causation.
6. Evaluate systems for medical injury compensation. Evaluate the effects of existing compensation
mechanisms; examine proposed compensation schemes
for efficiency and fairness; evaluate the effectiveness of
no-fault injury compensation systems; develop and
evaluate a standard lable of "severity-of-injury" awards
and factors for calculating economic damages.
7. Enhance methods for monitoring practitioners.
Survey standards currently used in state board assessment of professional practice; investigate and evaluate
successful board interventions to maximize effective
professional review; develop and evaluate laws "diai deal
effectively with confidentiality in peer review; research
and evaluate the operation and effectiveness of incentives for participation in risk management and quality
improvement activities.
8. Evaluate the effectiveness of professional discipline. Identify factors currently used to indicate substandard professional practice; develop prospective indicators of unacceptable professional practice; survey
sanctions currently in use by professional licensure
boards; evaluate effectiveness of various sanctions on
changing practitioner behavior.
9. Investigate ways to change provider behavior.
Expand analysis of professional practice patterns and
the effects of legal and regulatory factors on changing
provider practice; research effective ways of changing
provider behavior to reduce adverse outcomes and negligent medical care; identify true causes of defensive
medicine practices; investigate connections between
provider behavior and insurance premiums; demonstrate and evaluate the instructive use of outcome data
in reducing risk-related practice; investigate the relationship between changes in provider communication
practices and claims of medical negligence.
Acknowledgment. AHCPR appreciates the cooperation of James Zimmcrly. M.D., J.D.. M.P.H., former Cliairman, Depanment of Legal
Medicine, Armed Forces Institute of Pathology (AFIP), Washington, DC, and of the Catholic University School of Law in arranging for the long
term loan of their slaff to work on this conference. Wc thank Janet Scifcrl. J.D. (AFIP). and Michele Popowich. B.A., R.N. (Law Student, Cathoic University) for their invaluable assistance in the organization, planning, and conduct of the conference. We also thank Manin Dyer, J.D.,
'or assistance in organizing and editing the manuscript.
1
mm ,*
�Foreword
The Agency for Health Care Policy and Research (AHCPR) was created in December 1989 to enhance the
quality, appropriateness, and effectiveness of health care services and access to such services. AHCPR carries
out this mission through scientific research and promotion of improvements in clinical practice and in the
organization, financing, and delivery of health care services. AHCPR expands on the work of its predecessor,
the National Center for Health Services Research and Health Care Technology Assessment (NCHSR).
Important research related to medical liability was funded by NCHSR, and periodic conferences on the
subject were sponsored by the Department of Health and Human Services (DHHS), but a regularized organizational locus for medical liability issues within the Public Health Service and DHHS was needed. AHCPR
is pleased to receive authorization to engage in medical liability research and become the DHHS focal point
for this research.
This volume contains presentations, summaries, and analyses from AHCPR's medical liability conference,
held February 27 to March 1, 1991 in Washington, DC. The conference brought together representatives of
the health care and legal systems to make recommendations for an AHCPR agenda on medical liability.
These proceedings offer policymakers and researchers a review of major issues, refonns, and initiatives in
the complex area of medical liability. Participants brought expertise in medical, legal, and professional
review processes from many professional disciplines and perspectives. This conference was an opportunity
for these differing views to be presented and for informed analysis to produce conclusions and priorities for
research and demonstrations in medical liability. The conference contributes to the AHCPR legal medicine
program through examination of medical and legal elements in medical liability and their interactions.
J. Jarrett Clinton, M.D.
Administrator
Agency for Health Care Policy and Research
in
�Preface
The Agency for Health Care Policy and Research (AHCPR) convened an invitational conference to explore
problems in medical liability that impair the quality and accessibility of health care in the United States. The
conference was held in Washington, DC, on February 27,28, and March 1, 1991. Approximately 200 people
attended from a variety of American health care and legal perspectives. All had particular interest and
expertise in medical liability.
Conference goals were to: define and clarify problems of medical liability affecting medical care quality
and practice; identify initiatives to address those problems; assess the initiatives in terms of cost, benefits,
feasibility, and effectiveness; and propose strategies for future AHCPR legal medicine activities. AHCPR
will respond to conference recommendations through support of research and evaluation programs, data
development, and information dissemination activities.
Participants were divided into six task forces, with representatives from major sectors of the health care
system in each group. These included physicians, nurses, attorneys, liability insurers, researchers, licensure
•"board representatives, health care policymakers, institutional administrators, risk management/quality assurance directors, and government officials. Each Task Force was directed to evaluate a specific area of medical
liability.
Task Forces
Medical Practice Constraints
Medical Risk/Quality Review
Liability Detennination .
Compensation
Professional Review Incentives
Professional Review Sanctions
After task force discussions were concluded, proposals and recommendations from these six groups were
combined into three broad areas of medical liability process: medical, legal, and professional review activities. These three combined Working Groups offered their conclusions and recommendations to the full
conference at the closing session.
Working Groups
Medical Process
Legal Process
Professional Review Process
Conference participants emphasized the need for data development; research; demonstration and evaluation
projects; and dissemination of medical liability infonnation to researchers, providers, consumers, and
policymakers. Information dissemination at the State level through the AHCPR User Liaison Program was
seen as vital; the expens also strongly recommended that AHCPR focus on quality issues, with the central
concern being improved patient care rather than cost control.
AHCPR plans a medical liability research agenda that is integrated into the agency's fundamental mission
of improving the quality, effectiveness, and appropriateness of health care. Programs include broad-based
scientific research, promotion of improvements in clinical practice, and advancements in the organization,
financing, and delivery of health care services. Medical liability has been identified as a crucial issue in health
services research and clinical practice and in the cost, organization, and financing of health care. Conference
recommendations will be integrated into AHCPR programs and may be used to establish priorities for new
programs. Current AHCPR activities focused on the quality and accessibility of health care will be used as
resources for exploring innovation in medical liability research and in a variety of demonstration and evaluation projects.
Kathleen Hastings, J.D., M.P.H., R.N.
Director, Legal Medicine Program
Agency for Health Care Policy and Research
IV
�xecutive Summary
This summary report presents presentations and discussion from "Issues in Medical Liability: A Working
Conference," which was convened to examine medical,
legal, and professional review aspects of medical liability. Participants from every sector of the American
health care system combined their knowledge and experience to identify and evaluale potential solutions to
medical liability problems detrimental to the accessibility and quality of health care in the United States. Recommendations for alternative approaches to medical liability problems were sought as part of the research
strategy of the Agency for Health Care Policy and Research (AHCPR)"
Conference Structure
Participants were divided into six task forces. Each
task force gathered representative experts from a number of professional disciplines, bringing a full spectrum
of views to each group's medical liability focus area.
Topics and issues for each of the six groups were:
Task Force 1. Medica! Practice
Constraints
The practice constraints group assessed what is known
about nonmedical faciors thai affect heaith care decisionmaking, such as:
•
defensive practice strategies to avoid liability which
contribute to overutilizing diagnostic or ireatment
resources;
•
liability-related limits on practice or palient selection thai restrict patient access io care and foreclose
preventive or early treatmenf.
•
excessive professional liability insurance premiums and practice constraints to limit risks;
•
effects of litigation experiences and fear of litigation on individual treatment decisions;
pressures of payment policies and cost-containment
efforts; and
•
•
liability-related choices of piactice location and
specialization, and implications for supply and distribution of medical provider sei vices.
Task Force 2. Medical Risk/Quality Review
The risk management and quality review group considered lhe liability implications of activities directed
to:
•
detect and reduce health care professional and facility errors;
eliminate ineffective or obsolete treatments;
disseminate information regarding new or more effeclive treatment modalities;
develop and use clinical practice guidelines;
enhance provider education and involvement in risk
management and quality improvement;
increase involvement of patients in risk assessment
and decisionmaking;
refine practice management techniques to prevent
medical error and patient miscommunication;
improve institutional systems to verify credentials
and award hospital privileges;
educate patients lo encourage more realistic expeclations of medical success; and
improve assessment, measurement, and monitoring
of quality in health care.
Task Force 3. Liability Determination
The liability determination group assessed measures
or refonns intended to:
establish criteria for qualifying and using valid
medical expertise to support legal review and decisions in claims of medical negligence;
clarify ambiguous and rapidly changing standards
of care;
identify and eliminate medically or legally meritless claims;
require and provide authoritative support for meritorious claims;
examine alternative methods of dispute resolution;
explore contract methods of pre-care dispute resolution;
promote effective public education regarding medical injury; and
improve mechanisms to monitor and deter offensive legal practices and meritless malpractice
claims.
Task Force 4. Compensation
The compensation group considered strategies to more
equitably compensate negligent medical injuries, including:
•
•
universal tables of damages for negligently caused
injuries;
compensation formulas to apportion liability for error and allocate responsibility among accountable
providers;
�•
compensation solutions, such as enterprise liability
on a per-patient basis rather than per-practitioner,
based on risk of damages and number of encounters;
compensation schedules of income and expense to
reflect timing and extent of actual loss; and
exoneration for providers when compensation is
paid in cases that do not reflect negligent care.
•
•
Task Force 5. Professional Review Incentives
The incentives group considered improvements in review of professional practice to:
•
detect substandard practice and encourage sustained professional competence, knowledge, and
communication;
•
•
•
identify incentives to motivate providers to update
knowledge base and skill level to maintain professional competence;
identify corrective measures that give providers an
opportunity to adopt valid practice patterns; and
provide practitioners with education, retraining, rehabilitation, proctorship, technical support, or other
positive incentives to correct deficiencies in professional performance.
Task Force 6. Professional Review Sanctions
The sanctions group discussed and compared strategies to:
•
•
•
•
•
•
examine existing mechanisms used by licensure
boards to investigate and sanction professional
practice;
promote more uniform identification of practitioners providing substandard care;
resolve disparities in peer review processes;
assess effectiveness of deterrence and penalties on
preventable substandard professional practice;
evaluate practice limitations, licensure and hospiial
privilege revocations, and disqualification or requalification of problem practitioners; and
assess the effectiveness of major penalties for significant violations such as illegal financial schemes,
unethical or illegal professional practices, and substance abuse.
2. legal process, and
3. professional review process.
These groups discussed medical strategies designed to
improve outcomes and quality of care and reduce risk;
legal strategies designed to promote more valid fault determination and injury compensation and reduce the incentives for defensive medicine and inappropriate technology use; and professional review initiatives designed
to pursue security of confidential review activities, valid
and fair standards of quality performance measures, and
medical review criteria, and appropriate, effective professional discipline.
Summary of Conclusions
and Recommendations
Participants' conclusions and recommendations of
proposed initiatives for refonn are listed in four operational areas: overall medical liability analysis and control; medical practice assessment and improvement; legal process evaluation and reform; and professional
review appraisal and support. Participants emphasized
that effective initiatives to control medical liability must
recognize the interactive nature of the medical, legal,
and professional review processes.
Medical Liability Analysis and Control
1. Conclusions about information collection for
decisionmaking:
•
•
Medical case review, legal claims analysis, risk
management evaluation, and practice review
criteria are described in variable and nonstandardized terms.
• Extent of existing medical negligence and medical claims resolution data is currently unknown
or inaccessible.
Recommendations:
•
Expand the focus of medical liability analysis
from provider-defendant and paid plaintiff to
the larger setting of medical practice patterns
and influential effects of legal and regulatory
factors.
•
Develop a method forlarge scale tracking of adverse events, patterns of medical error and
claims data.
Working Groups
Task force members combined to form three working
groups at the next conference session. The working
croups assessed liability issues in terms of:
1. medical process,
Current data on adverse medical outcomes, patterns of medical error, provider characteristics,
patient outcomes, liability determinations,
standards of care, and on claims and dispute resolution is inaccessible, incomplete, and incompatible for comparison and validation purposes.
�•
Standardize data on medical outcomes, liability
claims, and resolution decisions.
•
Investigate medical outcomes common in
claims and liability.
•
Disseminate data on medical liability as a
mechanism for improving effective medical
and legal decisionmaking.
•
Investigate correlations between payment decisions, care outcomes, and perceptions of quality
by patients.
2. Conclusions about coordination of liability
control measures:
•
Communication and consensus are essential
among groups and persons taking action in
quality improvement, guideline development,
and outcomes analysis.
•
Risk management and quality improvement activities are fragmented and uncoordinated in
and among institutions.
•
Effects and effectiveness of quality improvement efforts on institutional performance and
patient outcomes are not established.
Recommendations:
•
Create a clearinghouse to make available information on guidelines existing and under development by health insurers, liability insurers,
health care institutions, providers, professional
societies, specialty societies, researchers, and
public interest groups.
•
Improve access to information used to develop
guidelines to increase use by providers.
•
Refine methods and encourage the highest
skills and expertise in guideline development.
Medical Practice Assessment
and Improvement
1. Conclusion about defining and applying
medical practice standards:
•
Appropriate standards to review and assess
health care performance are lacking, vague, or
applied capriciously in risk management and
quality improvement processes and in legal
fault detennination.
Recommendations:
•
Study medical processes and outcomes for
medical events implicated in claims.
•
Investigate causes and factors involved in substandard medical practice and the patterns of
medical error.
• Validate clinical practice guidelines as effective
and appropriate professional practice.
• Identify prospective indicators of potentially
acceptable and unacceptable provider practice.
2. Conclusions about encouraging appropriate
changes in provider behavior:
• Providers harbor mistaken impressions and
misplaced anxiety about risks of liability.
• Patient-practitioner relationships are strained
by communication problems stemming from
education deficits, language barriers, differing
expectations of success, the burden of decisionmaking, and choices of alternatives.
• Inequities in the liability determination process
prompt inappropriate provider behavior.
• Providers are not skilled in dealing with the patient in health care decisionmaking.
• Methodology is lacking to measure effectiveness of various activities intended to change
provider behavior.
Recommendations:
• Investigate and develop effective ways to
change provider behavior to reduce adverse
outcomes and medical liability.
• Identify the incidence and causes of defensive
medical practices.
• Investigate connections between provider behavior and liability insurance premiums.
• Demonstrate and evaluate the instructive use of
adverse outcomes data to reduce risk-related
practice.
• Investigate the relationship between changes in
provider communication practices and claims
of negligence.
Legal Process Evaluation and Reform
1. Conclusions about connecting negligent
medical care and legal liability:
• Medical liability demonstrates no dependable
or equitable causal connection with medical
negligence.
• The legal process does not effectively reject
meritless claims.
• Access to advocacy and compensation is limited or absent for meritorious but small claims.
�Recommendations:
Professional Review Appraisal and Support
1. Conclusions about identifying and dealing with
substandard providers:
•
Investigate barriers to claims by the negligently
injured patient.
•
Evaluate the performance and effectiveness of
individual States' use of no-fault models of injury compensation.
•
•
Evaluate the effect of lort reforms on medical liabilily issues other than liability insurance premiums or claims frequency and severity.
•
•
Compare and evaluate perfonnance of alternative dispute resolution mechanisms.
2. Conclusions about the valid application of
medical science in the legal process:
•
•
Lay juries are undependable for scientifically
valid fact-finding in complicated medical
cases.
Procedure rules and requirements for establishing legal causation are overly complex and
scientifically deficient for accurate determination of valid medical causation.
Recommendations:
•
Investigate standards, performance measures,
and appropriateness of medical expertise used
in the liability detennination process.
•
Develop ways to align determinations of medical and legal injury causaiion.
3. Conclusions about equitably awarding
adequate compensation to persons injured
by negligent health care:
•
Transaction costs of liability determination and
compensation consume an excessive proportion of expenditures.
•
Awards are frequently out of proponion with
severity of injury.
•
Medically injured claimants are awarded disproportionately higher compensation for comparable injuries than other negligently injured
persons.
Recommendations:
•
•
Develop and implement a schedule of standard
severity of injury damage awards and a factor
for calculating economic damages.
Evaluate and compare existing and proposed
compensation systems that compensate lhe injured more expeditiously and uniformly.
•
Providers mistrust and question the fairness of
standards used in the professional review process.
Fear of legal consequences chills action in peer
review and adverse outcomes or claims data
sharing.
Professional review boards focus on minimal
performance standards.
Recommendations:
• Investigate and evaluate successful State board
interventions which maximize effective professional review and discipline.
•
Evaluate and develop laws that effectively deal
with confidentiality in peer review.
•
Research and evaluate the operation of incentives for panicipation in risk management and
peer review activities.
• Investigate and evaluate the effectiveness of incentives and sanctions in current use.
2. Conclusion about medical practice standards
used to investigate and sanction health care
professionals:
• Appropriate standards to review and assess professional perfonnance are lacking, vague, or capriciously applied.
Recommendations:
• Define and document factors indicative of substandard professional practice.
•
Identify prospective indicators of potentially
unacceptable provider practice.
•
Evaluate standards or indicators used in State
board assessment of professional practice.
3. Conclusion about interventions in provider
behavior:
•
Effectiveness of incentives or sanctions in
changing provider behavior has not been determined.
Recommendations:
•
•
Evaluate the use of nonpunitive practice interventions to reduce risk-related practice.
Investigate the relationship between discipline
and iniervention and changes in practitioner
practice.
�Summary
Medical process issues. There was substantial discussion regarding the negative effect of a litigious society
on access to health care, especially for the urban and rural poor. Deficiencies in the provider-patient relationship, questions about the advisability of clinical guidelines, absence of an effective medical peer review
process, and pervasive and adverse effects of "defensive
medicine" also were of panicular importance to panicipants.
Issues related to "standardization" within medical
practice included lack of common terms and definitions
that would permit more effective communication about
medical liability among health care providers, lawyers,
and patients and the lack of the standardization of data
classifieaiions necessaiy to relaie infonnation from one
medical, legal, or practice review information source to
another.
The "technological imperative" was noted to compel
providers to remain in the forefront of technological advances and increase the demand for costly new medical
technologies. Other problems of importance included
the relative inability to influence provider behavior and
the growing emphasis on risk management in hospitals,
coupled with the tendency to ignore events arising in
outpatient services and clinics. Critical observations asserted that efforts to reduce provider risk and financial
loss are often inconsistent with aims to enhance patient
care.
Panicipants agreed that the growing demand for access
to the latest medical technology and the unrealistic expectations created by rapid advances in medical technology tend to obscure understanding of two facts:
medical capabilities and resources are limited; and medical outcomes, even when the most sophisticated technologies are employed, may nevertheless be unsuccessful or unsatisfactory.
Dealing with these problems entails more than simply
educating patients; an ongoing public dialogue must be
launched to increase understanding of what realistically
can be expected from the medical care system. Issues
of expectations and limitations and the effect of the human element in the application of medical technology
were recommended for further consideration in a future
conference. Loss of personal relationships between
doctors, nurses, and their patients was observed to be a
side effect of the technological revolution in medical
treatment and appeared to be a major contributor to the
growing adversarial relationship between health care
professionals and patients.
Legal issues. Divergent views in the legal process discussions resulled in recommendations based on consen-
sus. Therefore, the group reports reflect only majority
opinions; minority views are outlined in the summaries
of task force and working group discussions.
Legal process issues were discussed in the context of
the potential conflicts that arise in liability determination and compensation systems. Similarly, questions
about access to medical care were regarded as inextricably intertwined with medical liability concerns. In addition, the group decried the tendency of doctors,
nurses, lawyers, and other health care and legal professionals to consider medical liability and legal process issues without consumer participation. It was strongly
recommended, therefore, that patients—the consumers
of medical care—be actively involved in such deliberations.
Discussion of the multiplicity of conventional Statebased tort reform laws consumed considerable time.
Conventional tort refonn includes limitations on legal
process through such mechanisms as review of the
amount of attorney's fees, mandatory review panels,
and control of the amount of damage awards through
caps or collateral source offsets. The group recommended that conventional tort reform be both more
widely implemented and more closely evaluated. Because some of these refonns have had a potent effect on
malpractice claims, the objective of the recommended
evaluation would be to assess the overall effects of these
refonns on patient care and the ability of injured parties
to obtain fair and timely compensation.
In addition, the group recommended pursuit of more
comprehensive alternatives that go beyond conventional tort reform. Such alternatives would include contractual approaches, in which consumers and health care
providers mutually agree about the legal rules that
would govern determinations of liability. Other options
are: alternative dispute resolution approaches, such as
arbitration; no-fault approaches, such as the designated
or accelerated compensable events system; and increased use of practice guidelines.
Other matters considered were: the need to better understand the present liability system, assess its effectiveness, and define its shortcomings and strengths; the need
to precisely define the differences between legal and
medical determinations of faull and evaluate objectively
their relative strengths and weaknesses; the need to reevaluate the credentials, standards, and role of expert
witnesses in malpractice litigation, and the relative roles
of health care and legal professionals in defining those
credentials; and the validity of the belief that there is a
detenent effect of malpractice litigation upon medical
malpractice. Finally, lhe group recommended investigation of the 80 to 90 percent of patients who experience
�iatrogenic injury due to negligence but do not file a
claim.
Professional review issues. Three basic problems
were identified by the Professional Review Process
Working Group as contributing causes of medical liability litigation. One is the difficulty in coordination and
communication of infonnation among professional review authorities. For example, while third-party payers
have substantial infonnation about practice patterns, ligensure boards have their own data. Although the essential purposes and functions of these data may be different, the responsibilities of both groups with regard to
monjtoring and sanctioning health care practices would
seem to mandate coordination of information. Difficulty in communicating a common understanding of medical expectations between patients and health care professionals was perceived as a related problem, with
malpractice litigation the ultimate manifestation of failure in communication. The second problem discussed
in depth was the lack of a common body of knowledge
related to sanctions and incentives, particularly their
application and effectiveness. The third problem was
the focus of sanctions on minimal standards rather than
on reinforcing effectiveness and performance.
As an initial step in addressing these problems, the
group suggested cataloging infonnation on sanctions
and incentives now being applied by professional review groups and compiling infonnation about the effectiveness ofthose sanctions and incentives. This measure would address such issues as: how well licensure
boards and payers are doing in applying sanctions;
whether sanctions are having the intended effect; and
whether perfonnance improved in individuals who
were offered incentives. A study was also suggested to
determine whether personal involvement in malpractice
litigation improves the performance of the individual involved and whether it has a corollary effect on the perfonnance of others in the peer group within which that
individual practices.
Other research and demonstration projects were proposed, including:
Examination of the effects of training and education
on professional performance, and a study of
changes in the training and education environment
of health care professionals that might have
long-tenm beneficial effects on performance.
Projects linking payment to quality of performance,
rewarding good performance and sanctioning poor
performance through the payment made for a service. Another approach related provider payment to
the degree of patient satisfaction with the service received.
Linking malpractice insurance premiums to performance. Standards need to be established against
which a practitioner's performance can be evaluated, and the amount of malpractice insurance premiums calculated on the basis of conformity with
those standards.
Improving communications between health care
practitioners and their patients and achieving better
coordination among the various participants in the
review of professional qualifications and performance. Research on patient/practitioner communication should explore ways of helping practitioners
and patients arrive at a common understanding of
the anticipated results of medical treatment. Research on coordinating the work of professional review committees should address ways of sharing
data and other information, ensuring that decisions
are consistent and reflect complete infonnation
about practitioner perfonnance.
Development of a range of standards defining levels
of perfonnance against which an individual practitioner can be measured. Such standards should be a
continuum, from what constitutes unacceptable or
substandard performance, to acceptable performance, to excellent or outstanding performance.
Such standards were seen as valuable tools for establishing the process of payment incentives.
�Summary of Task Force Discussions and Recommendations
Medical Practice Constraints
12. Investigate practice and claims experience in managed care and health maintenance practice.
Sunwjary of discussion:
Risk-avoidance and defensive medical practices
Medical Risk/Quality Review
Misparceptions of medical fact and medical effectiveness
Summary of discussion:
• Risk management versus quality improvement
• Medical practice-focused risk management
• Legal risk management
• Data issues
Summary of recommendations:
Misperceptions of legal fact and legal process
Practice review and discipline standards and guidelines
Effecting changes in medical practice
Policy considerations
1. Standardize data and informaiion regarding risk
management incidenis and claims.
Summary of rccoinmcnclaiions:
2. Coordinate risk management and quality improvement among institutions to follow care occurring in
one selling and adverse outcomes that become apparent in another.
1. Collect and disseminate infonnation on treatment
effectiveness to modify provider behavior.
Educate health care students about actual legal issues.
3. Train health care professionals to deal appropriately
with legal process.
3. Investigate legal barriers to the use and dissemination of quality assurance infonnation for effective
risk management.
4. Research provider behavior and knowledge of
practice risk and treatment outcomes.
4. Define risk management and its relationship to
quality assurance regarding development and use of
criteria, guidelines, and protocols.
5. Research financial incentives and third-party
payers' influence on practicing physicians' decisions.
Liability Determination
Summary of discussion:
Medical merit and legal outcomes
Expert witness impartiality and qualifications
Medical standards in liability determination
Cost constraints and the standard of care
Ahematives to the current system
Consumer, State, and Federal roles in liability issues
Summaiy of recommendations:
6. Define and quantify over-utilization aspects of defensive medicine.
7. Research and demonstrate effectiveness of practice
guidelines.
8. Investigate the legal implications of practice guidelines.
9. Research palient and pathology factors and patterns
of error in liability claims.
1. Investigate the legal system's ability to identify
medical negligence by comparing conclusions of
medical peer review panels with legal outcomes.
10. Develop data-sharing projects to define risks.
2. Research expert witnesses' impartiality and qualifications, and compare outcomes of cases using
1. Research provider-patient rapport to identify
claims-related factors.
57
�Professional Review Incentives
court-appointed witnesses to those without neutral
witnesses.
Summaiy of discussion:
• Competence assessment and education
• Performance review and corrective interventions
• Adverse medical outcomes and practice error data
Summaiy of recommendations:
3. Research and document the scientific quality of
medical evidence.
4. Research standaids used to screen claims, medical
certification, practice guidelines, or use of pretrial
screening by medical peer review panels.
1. Enhance communication between providers and
patients.
5. Develop draft contracts to define care standards and
dispute mechanisms.
2. Evaluate and support programs to enhance medical
practice competence, with research to connect medical practice and claims events to determine valid
competence issues.
6? Study incentives that influence dispute resolution,
for example, reponing the threshold of paid claims
and the influence of such reporting on the incidence
of smaller settlements and decisions whether to arbitrate.
3. Enact a malpractice exemption for physicians who
adhere to established guidelines.
4. Increase funding for State licensure boards.
7. Increase consumer input in selection and evaluation
of studies to address medical liability issues.
5. Adopt performance-based evaluation of practice.
Compensation
7. Link provider compensation to patient satisfaction,
quality, and access.
6. Provide incentives or protection for physicians to
participate in more effective peer review.
Sitnimai-y of discussion:
•
Incentives to increase compensation in litigation
•
Transaction costs of compensated injuries
•
Attorneys' fees and access to advocacy
•
8. Publish national data on the performance of individual providers.
Experience with alternative systems
9. Develop and conduct workshops on documentation
skills for recredentialing hospital staff.
10. Establish a national medical outcomes data base.
Summary of recommendations:
11. Institute direct communication with physicians
about performance records and case research comparisons.
1. Research and document the compensation effects of
tort reform. Most studies of tort refoim have focused either on claims or premiums.
12. Raise quality standards by linking quality certifications with liability determinations.
13. Research and compare punitive with corrective interventions in the review and disciplinary process.
2. Investigate the deterrence value of compensation
methods; demonstrations should carefully assess
the costs of compensation and the mechanism used
to award compensation, and disclose the payment
source for costs.
Professional Review Sanctions
Summaiy of discussion:
•
•
•
Coordinating agency actions and reports
Analysis of disciplinary interventions
Indicators of substandard practice to support sanctions
Summaiy of recommendations:
3. Assess the effects of the contingency fee on compensation levels and access to advocacy.
4. Evaluate tlie reliability of an alternative administrative system's internal consistency with administrative law and uniformity of decisionmaking (could
involve binding arbitration, administrative law
judges, or a new agency with expert panels).
1. Improve coordination of actions and information
reported to and from boards and others by payers,
Federal agencies, HMOs, and hospitals.
58
�5. Devise and perfect markers and indicators to identify practices in need of discipline and develop
self-assessment for practitioners that would preclude intervention.
Assess medical practices to allow physicians to improve their performance through educational programs without punitive action or publicity.
3. Evaluate and compare the effectiveness of particular sanction mechanisms through research or demonstration of model programs, spotlighting particularly promising approaches.
6. Identify specific indicators of medical board performance to determine what can be expected of
board activities to solve problems of inadequate resources; devise a realistic public information strategy7. Institute long-term monitoring of the effects of various sanctions.
4. Support data synthesis to collect what is known
,about existing programs and how they interrelate;
make such information accessible (both statistical
reports and practice-oriented publications).
59
�Working Group Report
Medical Process
Roger J. Bulger, M.D., Chair
Members of the Task Forces on Medical Practice Constraints and Medical Risk/Quality Review convened for
a wording group session to reach consensus on problems and frame their final recommendations. Substantial discussion addressed the negative impact of malpractice problems on access to care, especially for the
urban and rural poor. Deficiencies in the provider-patient relationship were also analyzed at length, as were
the use of clinical guidelines, impediments to effective
peer review, and the dimensions of defensive medicine.
Participants identified these high-priority issues:
•
A lack of common language and definitions among
health care providers, lawyers, and patients.
•
Barriers to effective communication between the
public and the health care professions that have led
to the "technological imperative," which challenges
medical institutions to keep pace with technological
advances, arouses public demand for their use, and
strains medical and other resources and capabilities.
•
expectations for technology use in patient care was accorded high importance, and participants recommended
a separate conference to address these issues.
Because the health professions have become so technically proficient and technologically oriented, it often
appears that physicians and nurses have become less
personally involved in healing in the wider context.
Tliis has contributed to the adversarial relationship that
sometimes develops between health care professionals
and patients.
Tlie issue of when data and research findings are sufficient to influence policy was also raised. For example,
is the Harvard study of the New York State hospitals an
adequate basis for policy decisions, or should results of
similar studies of hospitals in Illinois and Texas be
made? When are data sufficient and the results of analyses sufficient to move forward with policy decisions?
Efforts to discourage secrecy about malpractice claims
and settlements were suggested. Secrecy agreements in
malpractice settlements hinder risk management efforts, both for providers involved and others who might
benefit from their experiences. The inversely related issues of confidentiality and data dissemination were also
discussed. For example, mandatory reporting of professional sanctions is vital, but confidentiality also must be
maintained to encourage such reporting.
There was some disagreement about the value of helping medical professionals understand legal processes affecting medical liability. Conferences on medical liability and associated quality issues for residents were
reported to have been well received and supported. Departments that have mandated resident participation
have had reduced incidence of malpractice claims or
suits.
It was recommended that any studies undertaken to implement these initiatives be carefully designed and evaluated. Whether studies are intended for physician education or the education of patients, or whether they
involve new, innovative quality assurance or risk management programs, they musl be carefully evaluated for
scientific integrity, they must demonstrate to consumers, policymakers, and the medical professions that recommended measures have merit and will work.
The inability to merge data sets because of lack of
standardization.
•
The relative difficulties in effecting changes in provider behavior.
• The emphasis on risk management in the hospital
and the resultant tendency to ignore the outpatient
and clinic settings.
It was noted that risk management, with its focus on reducing provider risk and financial loss, may sometimes
be inconsistent with quality assurance, which aims to
enhance patient care process and oulcomes.
Important differences in views among panicipants
emerged din ing lhe discussion of strategies for future
activities. Particularly significant were differing views
of lawyers, patients, and physicians about whal constitutes evidence of malpractice and the qualifications and
role of expert witnesses. There was also disagreement
about the effects of the so-called "technological imperative." Public and professional dialogue about realistic
Dr. Bulger is Presidcn! of ilic Association of Academic Health
Centers.
61
�It was noted that the continuous quality improvement
program resolves quality problems, not by simply picking a culpable individual, but by recognizing factors beyond the control of individual practitioners, such as systems upon which practitioners depend that may
contribute to adverse outcomes. The medical liability
system's primary focus on the individual fails to recognize this and therefore does not address other sources of
error deleterious to quality activities.
Promising initiatives:
•
Obtain better information and data on all adverse
events, not just events that result in malpractice
claims.
•
Establish uniform standards and requirements for
the collection and reporting of such information by
all health care institutions and others who provide
health care.
•
Undertake studies to detennine effective ways of
improving providers' diagnostic and treatment
practices to help minimize the risk of medical injuryDevelop criteria, guidelines, and standards on institutional management and clinical care specifically
to reduce adverse events.
Improve integration of risk management and quality assurance activities within and among health care
institutions.
Summary of Medical Process Working
Group Report
Conclusions aboul medical liability' problems from a
medical perspective:
•
There are no analyses that demonstrate a correlation
between liability suits and medical negligence and
between pracuce guidelines and risk management
issues.
•
Standardized risk management data do not exist because of the lack of unifonn data elements.
•
Remove legal barriers to sharing quality assurance
information with those engaged in risk management
activities.
Inconsistent definitions and case reporting by insurance companies and other entities prevent effective
analysis.
•
Address the problem of adverse events occurring in
one institution that are later discovered in another.
Recommendations for AHCPR Strategies
Data from medical liability claims indicate the need
to capture similar information on all adverse events.
1. Enhance data collection and analysis
•
Convene a conference on data issues, such as
standardization of coding, assessing malpractice claims, and adverse events data.
Existing data, cven where useful, have been inaccessible.
•
Inadequate information has been gathered on how
to change provider behavior to improve care and
limit liability.
Conduct research on coding that is "event" rather than "provider" based and therefore likely to
be of more universal applicability and utility.
•
Assess the utility of large data bases for tracking
adverse events.
Outcomes research to determine best medical practices has been lacking.
2.
Suspected adverse effects of legal constraints on
peer review have been insufficiently documented.
Develop broadly applicable and useful risk management guidelines.
•
Integration of risk management and quality assurance activities is insufficient.
62
Define good risk management guidelines of
universal applicability and utility.
•
Constraints on provider-patient relationships have
been caused by communication problems (i.e., language barriers, insufficient education, and unreasonable expectations).
Develop and evaluate a methodology for creating guidelines.
•
Provider ignorance and excessive anxiety about liability have led to medically harmful and legally ineffectual practices.
Identify and catalog the universe of existing
guidelines, including those of liability insurers,
health care institutions, specialty societies,
medical societies, and Federal and State governments.
•
Sharing of data has been impossible or neglected
within and among institutions.
Conduct research on health care practices that
lead to adverse outcomes and malpractice
claims.
�the American Medical Association (AMA)
model—undertaken in different States.
•
Assess "defensive medicine" practices to determine whether they reduce malpractice claims.
Research the scope of confidentiality protection in
various State peer review statutes.
•
t
•
Initiate demonstration projects to test the effectiveness of various approaches to decreasing
the incidence of adverse outcomes (e.g., test the
effectiveness of risk scoring with feedback to
providers).
Evaluate the effect on provider behavior of insurer plans, such as "managed care," that use restrictions and incentives to encourage risk management activities.
Conduct research to detennine whether more
efficient and effective dissemination of information about quality assurance, risk management, desirable medical practices, and medical
liability matters would have a favorable impact
on provider behavior.
•
Develop a model State confidentiality statute
that strikes a better balance between the legitimate need to know of the medical profession,
researchers, the general public, and others and
the equally legitimate obligation to protect the
physician/patient privilege.
•
•
•
Identify ways to improve information dissemination.
Other Recommendations
1. Assess the effects of continuous quality improvement (CQI) on institutions and outcomes.
2. Convene a conference on how the legal system
(with its rules of evidence) deals with establishing
causation when alleged breaches of standards of
care result in liability claims; the conference also
should cover the differences between the medical
and legal concepts of causation.
Evaluate the testing and implementation of reform initiatives—such as no-fault, administrative review, expert-panel arbitration, accelerated-compensation events system (ACES), and
3. Convene a conference on strategies for improving
communication of medical realities to patients.
63
�Working Group Report
Legal Process
Troyen A. Brennan, M.D., J.D., Chair
Members of the Task Force on Liability Determination
joined the Task Force on Compensation in a working
group session to discuss problems and decide on final
recommendations for solutions. The working group
chair and both task force moderators noted that during
discussions, participants offered widely divergent
points of view. Participants presented perspectives
aligned along defendants' and plaintiffs' interests on a
number of issues. With substantial disagreement, some
of the group recommendations were put to a vote to resolve differences of opinion. Therefore, while the group
report reflects a majority view, minority positions were
sserted throughout the discussions.
The group felt that it was important to consider not
only legal process issues but also the potential conflicts
that arise between the liability determination process
and the health care compensation system. Access to
medical care is closely connected to medical liabilily,
and liability should not be considered in isolation. The
group also emphasized the importance of obtaining consumer participalion on many issues, noting that lawyers,
doctors, nurses, administrators, legislators, and regulators have been too isolated by limited interests.
jured individuals and their ability to obtain compensation, as well as the overall deterrent effect of the tort reforms.
Although the recommendation to implement tort reform was a majority conclusion, the issue was raised that
emphasis should be placed on reducing the incidence of
malpractice rather than on cost containment.
A near second priority was the pursuit of more comprehensive liability alternatives. These would be actions
beyond modifying legal rules (such as conventional tort
reform); these alternatives would include contractual
approaches through which consumers can decide what
set of legal rules will guide determinations of liability.
Other strategies were also deemed important, such as alternative dispute resolution (e.g., arbitration). No-fault
and neo-no-fault approaches—such as the designated or
accelerated compensable events system—were also
considered promising for trial and evaluation, as was
amplified use of practice guidelines in the legal process.
A major recommendation was to better assess operation of the present liability system and especially to determine its effectiveness in achieving specific goals.
Concern was expressed that both the deterrent signal to
providers as well as the validity determinations of negligence have been substantially ineffective in the current
tort system. Objective evaluation of the differences between legal and medical determinations of fault was recommended.
Clearly, the role and use of expert witnesses were seen
as problematic by the group. Participants recommended
that professional groups determine required credentials
for expert witnesses and that the effect of such qualifications on litigation be studied. This would also lead to a
better understanding of legal and scientific causation on
liability deiermination.
The group recognized that 8 or 9 out of 10patients who
experience a medical injury due to negligence never file
a claim. Research to identify the barriers to claims by
these people was identified as highly important to all aspects of medical liability analysis.
The highest priority of the group, and the most discussed, was the multiplicity of conventional tort reform
initiatives instituted by various States. Conventional
tort reform includes such measures as changes in access
to the courtroom—for example, through limitation of
attorney's fees, mandatory case screening panels, and
reduction in awards to plaintiffs through caps or collateral source offsets. The group recommended that conventional tort reform be implemented more extensively
and evaluated closely. Such studies would not assess the
effect of reforms on claims, as it is clear that reforms
have a potent effect on claims and payout amounts.
Rather, the purpose would be to study the effects on inDr. Brennan is Associate Professor, Harvard Medical School,
and Associate Physician, Division of General Medicine at
Brigham and Women's Hospital, Boston.
65
�Summary of Legal Process Working Group
Report
•
Conclusions about medical liability problems from a
legal perspective:
•
•
The present system does not compensate most people who suffer from negligence (the Harvard Study
revealed that only 1 of 16 people who are negligently injured receive compensation).
•
Sets benefits for different types of adverse
events and encourages people to seek early
care, unlike the tort system, which encourages
delays so that people will appear at trial in a condition that will elicit the largest awards from a
jury.
3. American Medical Association (AMA) plan (administrative fault determination).
Awards made in malpractice claims are much higher than awards for identical injuries attributable to
other causes (i.e., automobile accidents, product liability injuries).
•
The jury system is not an appropriate mechanism to
determine malpractice. Medical issues are too complex, and the adversarial system eliminates the
middle ground in analyses of fault.
•
4.
•
Location-based no fault system for injury
events; does not work well for latent events (the
re lative proportions of traumatic and latent negligent events are unclear).
6. Alternative dispute resolution (ADR) mechanisms
In the tort system, economic loss implies that people
who earn more money receive greater compensation for medical injury. The question is whether a
person with high income who loses an arm should
be reimbursed more that a person with low income
who loses an arm, or whether awards should be
based on the severity of injury or economic loss.
•
•
•
1. Most injured patients do not file claims. Conduct
research on patients who experience iatrogenic injury due to negligence but do not file claims to identify barriers to the tort system and compare type and
magnitude of injuries relative to those patients who
do file claims.
Association of America
Establishes a fee schedule for economic damage with a cap on daily losses.
•
Formalizes awards for pain and suffering that
tie such awards to economic loss.
•
Require certification of worthiness of expert
witnesses.
Recommendations for AHCPR strategies
Promising initiatives:
•
Develop guidelines to use as standards of practice.
•
Small damages cases are afforded unequal access to
the system and to advocacy in current tort practice.
1. Physician Insurers
(fault-based system)
Contracts between physicians and patients
• Voluntary or binding arbitration
7. Modification of evidentiary standards
The contingency fee system reduces the amount the
plaintiff receives and may result in under-compensation.
•
No-fault systems (problems include definition of
the event to be reimbursed).
5. Worker's compensation model
Juries in many States are not aware of collateral
sources of payment for medical injuries (e.g., worker's compensation, health insurance, disability insurance).
•
Considers collateral sources to avoid double recovery.
• Provides funding to the system through medical
providers' premiums.
Accelerated compensable events (ACEs)
•
Much of the compensation (more than 50 percent)
is consumed in process (high transaction
costs)—that is, legal costs, expert witnesses, and
* cost of discovery.
•
2.
Provides unlimited medical and wage loss
benefits.
Administers the system through an administrative law judge; however, the right to jury is preserved, and the schedule of benefits remains.
2.
66
Much dispute exists about the current system's performance in resolving medical malpractice cases.
Research recommended includes: determinations
of the incidence of defensive medicine, the influence of expert witnesses/testimony in the outcomes
of malpractice cases, and the relationship between
medically and legally determined negligence.
�Many proposals have been offered for alternatives
to the current system. Demonstrations of these alternative mechanisms—including the AMA administrative model, arbitration, designated compensable events, and the use of practice guidelines—
should be supported, with extensive evaluation of
effects and effectiveness.
effects on claimants. Studies of the consequences
of tort reforms should be undertaken.
Other Recommendations
In considering the important and continuing problems
of medical injury and systems for establishing responsibility for such injuries, the group urged that initiatives
and studies remain cognizant of the centra] role of helping patients and promoting consumer input and the potential conflict between liability/compensation judgments and consumer/payer/provider efforts for cost
containment.
4. Earlier studies have evaluated the effects of tort refonns on claims frequency and malpractice premiums. Although research indicates that reforms
have been effective, little is known about secondary
67
�licensure boards, payers, professional societies, and
others.
•
Development of innovative methods of corrective
education based on performance evaluation.
Summary of Professional Review Working
Group Report
•
Expanded use of data to understand practice variations as they relate to practice problems.
Conclusions about medical liabiliry problems from a
professional review perspective:
Recommendations for AHCPR strategies
•
There is neither a coordinated effort nor adequate
communication among the numerous entities addressing medical liability, quality of care, and related issues.
•
There appears to be no common body of knowledge
* related to sanctions and incentives or to their application and effectiveness.
•
1. Data synthesis and inventory to determine the types
of sanctions and incentives currently in use, compile information on the effectiveness of interventions, and assess the performance and effectiveness
of intervenors.
Professional review focus tends to be on minimal
standards rather than incentives for outstanding performance, leading to provider distrust of professional review processes.
2. Research and demonstration projects on the effectiveness of sanctions and interventions.
3. Research on what contributes to good or bad performance.
4. Research and demonstration projects on payment
effects, especially the linkage to quality, patient satisfaction, and outcomes, and the relationship of
malpractice premiums to practitioner behavior.
Promising initiatives:
•
Medical boards working with peer review organizations (PROs) to identify both acceptable and unacceptable provider behavior.
5. Demonstration projects to determine whether improving patient/doctor communication reduces
malpractice claims.
•
Experience rating by malpractice insurers.
•
Feedback of informaiion to clinicians on acceptable
medical practice.
6. Research and demonstrations on indicators/measurements of performance covering the range from
outstanding to unacceptable performance.
70
�Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a tabbed divider. Given our
digitization capabilities, we are sometimes unable to adequately
scan such dividers. The title from the original document is
indicated below.
Divider Title:
�Tab R
Malpractice Workgroup Members and Consultants
This section includes a list of members on the Malpractice and Tort
Reform Workgroup (11), and consultants invited to participate in a
malpractice workshop convened by the Workgroup.
�Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
AND TYPE
001. list
SUBJECT/TITLE
DATE
Health Task Force/Malpractice Working Group Phone Directory
[partial] (2 pages)
04/05/1993
RESTRICTION
P6/b(6)
COLLECTION:
Clinton Presidential Records
Health Care Task Force
OA/Box Number: 1233
FOLDER TITLE:
Malpractice and Tort Reform Briefing Book [12]
2006-0810-F
ke219
RESTRICTION CODES
Presidential Records Act - (44 U.S.C. 2204(a)|
Freedom of Information Act - |5 U.S.C. 552(b)|
PI
P2
PJ
P4
b(l) National security classified information [(bXl) of the FOIA|
b(2) Release would disclose internal personnel rules and practices of
an agency [(b)(2) of the FOIA|
b(3) Release would violate a Federal statute [(b)(3) of the FOIA]
b(4) Release would disclose trade secrets or confidential or financial
information 1(b)(4) of the FOIA]
b(6) Release would constitute a clearly unwarranted invasion of
personal privacy [(b)(6) of the FOIA]
b(7) Release would disclose information compiled for law enforcement
purposes 1(b)(7) of the FOIA]
b(8) Release would disclose information concerning the regulation of
financial institutions 1(b)(8) of the FOIA]
b(9) Release would disclose geological or geophysical information
concerning wells |(bX9) of the FOIA]
National Security Classified Information 1(a)(1) of the PRA|
Relating to the appointment to Federal office [(a)(2) of the PRA|
Release would violate a Federal statute 1(a)(3) of the PRA|
Release would disclose trade secrets or confidential commercial or
financial information [(a)(4) of the PRA]
P5 Release would disclose confidential advice between the President
and his advisors, or between such advisors |a)(5) of the PRA]
P6 Release would constitute a clearly unwarranted invasion of
personal privacy 1(a)(6) of the PRA|
C. Closed in accordance with restrictions contained in donor's deed
of gift.
PRM. Personal record misfile defined in accordance with 44 U.S.C.
2201(3).
RR. Document will be reviewed upon request.
�HEALTH TASK FORCE/MALPRACTICE WORKING GROUP
PHONE DIRECTORY
Lynn M a r g h e r i o
(W) ( 2 0 2 ) 456-2315
FAX ( 2 0 2 ) 456-7739
Cluster I I I . New System Infrastructure and Support
B i l l Sage MD, JD
C l u s t e r Leader
O f f i c e - Room 486
(W) ( 2 0 2 ) 456-2598
FAX ( 2 0 2 ) 456-7739
J i m J o r l i n g , JD
Judy Eddy
(W) ( 2 0 2 ) 456-2598
FAX ( 2 0 2 ) 456-7739
'.'T'v
.•.i.
LooU
'
me)
C. M a l p r a c t i c e and Tort Reform
Meetings (OEOB) - Room
Office/bookcase (OEOB)
Copy machines (OEOB) O f f i c e (HHS/HHH Bldg.)
(O) (202) 401-4541
FAX (202) 690-6064
Name
213/211 (202) 456-2774
- Room 486
Room 223 (code 223)
- Room 305F
Agency/Address
Phone
#s
Robert Berenson, MD
Chair
O f f i c e § HHS/HHH
Room 305F
(W)
(202)
401-4541
Kathie Hastings, JD, RN
Co-Chair
HHS/PHS/AHCPR
(W)
(301)
FAX
227-6666
•
.(b)(6)
W/(202)
#
690-6064
(301) 227-8168
1
(W) ( 3 0 1 ) 443-2300
Glen Aukennan, MD
Nancy Baum, MHS, RN
HHS/HCFA
E l l e n Doneski
Sen.
(301) 443-0463
(W) ( 2 0 2 ) 690--6313
.
. (b)(6); i\'-;
(202) 690-8168
(W) ( 2 0 2 ) 224--9837
.•
•
(b)(6) "
(202) 224-7665
(W) ( 2 0 2 ) 225 -3388
(202) 225-9070
(W) (202) 690 -7862
(202) 690-6518
1
Rockefeller
?
Reggie Govan, JD
C o u n s e l , House
Educ. & L a b o r Comm.
Beth Hadley, JD, MPH
HHS/ASPE
' • i f f , *•
" " "(bKej ;
.^
John Euler, JD
DOJ/Civ Div/Torts
Vaccine L i t i g a t i o n
(W) (202) 501 -7475
(b)(6y -
(202) 208-4498
M i c h e l l e Hukaby, JD
Rep. Clement
(W) ( 2 0 2 ) 225 -4311
(202) 226-1035
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�Agency/Address
Phone #s
HR/Jud/ECL
Rep. Brooks
(W) (202) 225-2825
L a u r a Radack, JD
DOJ/Civ
CSTL
(W) (202) 219--0940
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L i n d a Reeves
HHS/PHS/AHCPR
B i l l S c h u l t z , JD
HR/Subcommittee
on H e a l t h & E n v i r .
Name
C y n t h i a Meadow, JD
Div/Torts
Caroline
OMB/Health D i v .
225-4299
(202)
208-4498
(301) 227--6666
(301)
227-8168
(202)
225-7092
(202)
395-3910
(b'K6)"
(W) (202) 226--7620
[Z-^il.,(6x6),. ....... ,]
(W) (202) 395--4922
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HHS/PHS/OASH/OHPE
Ronald Welch, JD
(202)
690-6603
(W) (202) 224 -5546
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(202)
224-5474
(W) (202) 224 -3657
i-(b)(6) :
(202)
224-3533
Sen. Kennedy
Michele Varnhagen, JD
(W) (202) 690 -7906
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Sen. Metzenbaum
T a p l i n , MSPH
State A t t o r n e y General
(202)
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Winnie S t a c h e l b e r g
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Representatives:
C h r i s M i l l i k e n , JD
J e n n i f e r Helton S m a l l , JD
National Association of
Attorneys General
(202) 434-8042
�Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
AND TYPE
002. memo
SUBJECT/TITLE
DATE
Robert Berenson, M.D. and Katheen Hastings, J.D., R.N. to
Malpractice Seminar Participants [partial] (1 page)
02/26/1993
RESTRICTION
P6/b(6)
COLLECTION:
Clinton Presidential Records
Health Care Task Force
OA/Box Number:
1233
FOLDER TITLE:
Malpractice and Tort Reform Briefing Book [12]
2006-0810-F
ke219
RESTRICTION CODES
Presidential Records Act - |44 U.S.C. 2204(a))
Freedom of Information Act - |5 U.S.C. 552(b))
PI National Security Classified Information 1(a)(1) of the PRA)
P2 Relating to the appointment to Federal office 1(a)(2) of the PRA)
P3 Release would violate a Federal statute |(aX3) of the PRA)
P4 Release would disclose trade secrets or confidential commercial or
financial information 1(a)(4) of the PRA)
P5 Release would disclose confidential advice between the President
and his advisors, or between such advisors |a)(5) of the PRA)
P6 Release would constitute a clearly unwarranted invasion of
personal privacy 1(a)(6) of the PRA)
b(l) National security classified information |(bXl) of the FOIA)
b(2) Release would disclose internal personnel rules and practices of
an agency 1(b)(2) of the FOIA]
b(3) Release would violate a Federal statute |(bX3) of the FOIA)
b(4) Release would disclose trade secrets or confidential or financial
information 1(b)(4) of the FOIA)
b(6) Release would constitute a clearly unwarranted invasion of
personal privacy 1(b)(6) of the FOIA]
b(7) Release would disclose information compiled for law enforcement
purposes 1(b)(7) of the FOIA]
b(8) Release would disclose information concerning the regulation of
financial institutions 1(b)(8) of the FOIA]
b(9) Release would disclose geological or geophysical information
concerning wells |(bX9) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed
of gift.
PRM. Personal record misfile defined in accordance with 44 U.S.C.
2201(3).
RR. Document will be reviewed upon request.
�THE
WHITE
HOUSE
WASHINGTON
TO:
Malpraaice Seminar Panicipants
FROM:
Robert Berenson, M.D.
Kathleen Hastings, J.D., R.N.
Working Group Co-Chairs
DATE:
February 26, 1993
Thank-you for agreeing to participate in the Malpraaice Seminar convened by the Health Task Force/Working
Group on Malpraaice and Tort Reform. It is not necessary to prepare anything in advance. The meeting will be
conduaed in an imormal small group atmosphere, and we simply request that you come prepared to share with us
your thoughts and expertise regarding malpraaice reform.
The meeting will be held on Friday, March 5, 1993, from 10:00 A.M. to 4:00 P.M., at the Depanment of Health
and Human Services, in Room 800 of the Huben H. Humphrey Building, 200 Independence Avenue SW,
Washington, D.C. 20201. Approximately twenty-five people will attend, consisting of the Working Group
members and several consultants with expenise in various areas of malpraaice reform.
Enclosed for your review prior to the meeting is an article which offers one model for reform of the health care
;ystem. In your view, in what ways would this model or similar ones modify the funaion of the current
malpraaice system? Under a managed competition scenario, (1) what possibilities emerge for malpraaice reform;
and (2) what "packages" of various malpraaice reform options could be construaed?
In addition to considering issues such as the appropriate level of Federal intervention and the role of the
malpraaice system in controlling health care costs and promoting quality, we have studied specific reform options.
Among the options we have explored are:
1. Statutory reform of tort litigation rules;
2. Alternatives to litigation;
3. No-fault and quasi no-fault systems;
4. Voluntary early offers of settlement;
5. Private contraaing mechanisms;
6. Fault-based administrative systems;
7. Praaice guidelines; and
8. Enterprise liability.
Should you have questions or concerns regarding the seminar, please do not hesitate to contact one of us:
Dr. Berenson
(O) (202) 401-4541
FAX (202) 690-6064
fv :";y>-4>
We look forward to your panicipation in the seminar.
Ms. Hastings
(O) (301) 227-6666
FAX (301) 227-8168
• "(b)(6) • : : ^ ' ^ - ' ^ ^ f ' ^ - j XJ-^Q_
�MALPRACTICE SEMTNAR PARTICIPANTS
Kenneth S. Abraham, Esq.
Class of 1962 Professor of Law
University of Virginia
School of Law/North Grounds
Charlottesville, VA 22901
(804) 924-3616
FAX (804) 924-7536
Randall Bovbjerg, J.D.
Senior Research Associate
The Urban Institute
2100 M Street, NW
Washington, DC 20037
(202) 857-8685
FAX (202)223-1149
Clark C. Havighurst, J.D.
William Neal Reynolds Professor of Law
Room 027, School of Law
Duke University
Durham, NC 27706
(919) 684-8152
FAX (919) 684-3417
Daniel Creasey, President
Risk Management Foundation
Harvard Medical Institution
840 Memorial Drive
Cambridge, MA 02139
(617) 495-5100
FAX (617) 495-9711
Frances H. Miller, J.D.
Professor of Law
Boston University School of Law
765 Commonwealth Avenue
Boston, MA 02215
(617) 353-4469/3110
FAX (617) 353-3077
Alice Gosfield, J.D.
2309 Delancey Place
Philadelphia, PA 19103
(215) 735-2384
FAX (215) 735-4778
Jeffrey O'Connell
John Allan Love Professor of Law
University of Virginia School of Law
Charlottesville, VA 22901
(804) 924-7809/7354
FAX (804) 924-7536
Laura L. Morlock, PhD.
Associate Professor, Health Policy & Mgmt
The Johns Hopkins University
School of Hygiene and Public Health
624 North Broadway
Hampton House Room 406
Baltimore, MD 21205
(410) 955-5315
FAX (410) 955-0876
Thomas B. Metzloff
Professor of Law
Duke University
School of Law
Science Drive at Towerview
Durham, NC 27706
(919) 681-6449
FAX (919) 684-3417
Pamela Gilbert, J.D.
Director, Congress Watch
215 Pennsylvania Avenue SE
Washington, DC 20003
(202) 546-4996
FAX (202) 547-7392
Walter J. Wadlington, Esq.
James Madison Professor of Law
University of Virginia
Charlottesville, VA 22901
(804) 924-3471
FAX (804) 924-7536
Troyen A. Brennan, M.D.,J.D.,M.P.H.
Professor of Law and Public Health
Department of Health Policy and Mgmt
Harvard School of Public Health
677 Huntington Avenue
Boston, MA 02115
(617) 432-4543
FAX (617) 432-4494
�Health Reform Task Force/Malpractice Working Group
MALPRACTICE SEMINAR
F r i d a y , March 5, 1993
10:00 AM - 4:00 PM
AGENDA
10:15
Introductions
Bob
Overview o f Agenda/Process
10:00
Kathleen Hastings
H e a l t h Care Reform under
a Managed C o m p e t i t i o n
Scenario
-
Tom P y l e
Overview o f t h e Plan and
Bob
d i s c u s s i o n o f t h e f o l l o w i n g as
they p e r t a i n t o m a l p r a c t i c e reform:
•
•
•
•
•
•
11:00
Berenson
Berenson
A t t r i b u t e s o f Organized D e l i v e r y Systems
Methods o f Q u a l i t y Management i n t h e New System
U n i v e r s a l Access t o H e a l t h Care/Insurance
Institutional Accountability
I n d i v i d u a l P r a c t i t i o n e r Ascountabii'ity
Consumer I n f o r m a t i o n and Choice
Refonn Options - D i s c u s s i o n I
Moderator - Fran M i l l e r
Private Contracting
Practice Guidelines
Enterprise L i a b i l i t y
12:30
1:00
Lunch Break
Refonn Options - D i s c u s s i o n I I
Moderator - W a l t e r Wadlington
T o r t Reform
No-Fault Systems
Fault-Based A d m i n i s t r a t i v e Systems
A l t e r n a t i v e Dispute Resolution
Early Offers of Settlement
2:30
Reform Options - D i s c u s s i o n I I I
Moderators - Bob Berenson
K a t h l e e n Hastings
Reform "Packages"
F e a b i l i t y of Implementation
Data Development and Research Needs
• :00
Adjourn
�
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
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Health Care Reform
Identifier
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2006-0810-F
Description
An account of the resource
<p>This collection consists of records related to Hillary Rodham Clinton's Health Care Reform Files, 1993-1996. First Lady Hillary Rodham Clinton served as the Chair of the President's Task Force on National Health Care Reform. The files contain reports, memoranda, correspondence, schedules, and news clippings. These materials discuss topics such as the proposed health care plan, the need for health care reform, benefits packages, Medicare, Medicaid, events in support of the Administration's plan, and other health care reform proposals. Furthermore, this material includes draft reports from the White House Health Care Interdepartmental Working Group, formed to advise the Health Care Task Force on the reform plan.</p>
<p>This collection is divided into two seperate segments. Click here for records from:<br /><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0810-F+Segment+1"><strong>Segment One</strong></a> <br /><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0810-F+Segment+2"><strong>Segment Two</strong></a></p>
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records
Publisher
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William J. Clinton Presidential Library & Museum
Text
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Paper
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
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Malpractice and Tort Reform Briefing Book [12]
Creator
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Health Care Task Force
General Files
Identifier
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2006-0810-F Segment 1
Is Part Of
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Box 61
<a href="http://clinton.presidentiallibraries.us/items/show/36144" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/12090749" target="_blank">National Archives Catalog Description</a>
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
Publisher
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William J. Clinton Presidential Library & Museum
Format
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Adobe Acrobat Document
Medium
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Preservation-Reproduction-Reference
Date Created
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5/5/2015
Source
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42-t-2194630-20060810F-Seg1-061-003-2015
12090749