Medical Malpractice Reform:
Vehicles for Meaningful Change
William M. Sage, MD, JD
Columbia Law School
Why Isn’t Malpractice Policy
Part of Health Policy?
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Doctors and Lawyers
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Government Structure
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State rather than federal issue
Judicial rather than legislative issue
Medicare and Medicaid invisible thus far
Politics
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Longstanding professional conflict
Unfinished battles for professional leaders
Specialized lobbying
Poster child for/against general tort reform
Periodicity
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“Crises” of midmid-1970s, midmid-1980s, early 2000s
Availability and affordability of malpractice insurance
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How Medical Liability Affects
Cost, Access, and Quality
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TwoTwo-sided mismatch between negligence and litigation
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Poor process
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Not only unjustified lawsuits, but also
Uncompensated injuries
High rates of avoidable error
Restricted information
Limited nonnon-monetary remedies
Extreme delay
Lack of quality feedback to providers
Misdirected focus on individuals rather than “systems”
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Fear of harm to reputation
Financial stress over insurability
Defensive medicine: costly overtesting and overtreatment
Defensive medicine: avoiding “risky” (sick or litigious) patients
patients
Malpractice reform: 2005
Political debate: Still MICRA
Academic debate: Not (just) MICRA
„ Administrative compensation (“no-fault”)
„ Enterprise liability
„ Early offers
„ Accelerated-compensation events
„ Specialized courts
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The Malpractice Problem: 1985
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Frivolous claims
Excessive awards
The Malpractice Problems: 2005
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Compensation for avoidable injury is inadequate
Too many avoidable errors occur
Litigation is too slow, too costly, too uncertain,
and too unpleasant
Premiums for primary coverage are too volatile
and, for some MDs, too expensive
Excess coverage and reinsurance are too costly
for hospitals and other institutions
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Why Not (Just) MICRA?
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MICRA helps solve some of these
problems, but potentially makes others
worse
MICRA perhaps results in somewhat less
of a bad system, but not a better system
Targets for Malpractice Reform
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Legal process: scrutinized since the 1970s
Medical care: scrutinized since the 1990s
(patient safety movement)
Liability insurance: neglected or appeased
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“No-Trial” Resolution
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Proactive administrative system, not litigation
Keyed to avoidable injury, not negligence
Lists of compensable events (ACEs)
Sliding-scale compensatory damages
Immediate disclosure and early mediation
Feedback to patient safety processes
Public “conversations” about the value of health
care and health
Health System Focus
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System accountability (hospitals and affiliated
physicians; large medical groups)
Diversified liability risk
Coordinated injury management
Insurance purchasing efficiencies
Safety improvement capability
Contracting potential with patients and payers
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Vehicles for Reform
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State-based demonstration projects
Employer initiatives
Medicare-led reform
State-based Demonstrations:
October 2002 IOM Report
Final Report
Committee on Rapid
Advance
Demonstration
Projects
www.nap.edu
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Demonstration Attributes
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Public Infrastructure
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Legal Environment
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Statutory or contractual modification of tort liability
Narrow exceptions
Subrogation waivers
OrganizationOrganization-based coverage
Patient Safety
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Definitions of avoidable injuries
Prospective schedule of nonnon-economic damages
Data on access, cost, and safety
Error reporting and analysis
Patient involvement
Peer review protection
Education of general public and stakeholders
IOM Option 1:
Provider-Based Early Payments
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Provider organizations elect to promptly pay
economic loss and pre-defined non-economic
damages for identifiable classes of avoidable
injuries
Participating providers establish patient safety
infrastructure to identify and avoid injuries
Participating providers are immune from suit
Federal government provides reinsurance on a
shared-cost basis to participating providers
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IOM Option 2:
Statewide Administrative Resolution
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All health care providers participate in a statesponsored administrative system established to
compensate patients suffering avoidable injuries
Providers pay amounts determined by
administrative adjudication system
Providers are immune from suit
Federal government funds start-up costs
Employer Initiatives
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Workers Compensation-style compromise
ERISA as enabling statute
But tension between malpractice reform
and general business tort reform
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Medicare-led Reform
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Applicable to Medicare (and Medicaid) patients
Administrative resolution through reconfigured
ALJ system
Close connection to patient safety, pay-forperformance, and other quality initiatives
Pilot program: Provider “earn-in” with
malpractice insurance subsidy
Changes “tort politics” to “health care politics”
Conclusions
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Liability should be understood as part of the
health care system, not apart from it
Changes since 1985 in how we understand
the health care system alter the problems
with liability and the potential solutions
Legal change should integrate liability with
health care cost, access, and quality
Medicare should take the lead
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