Medical
Malpractice
Tort Reforms
Group A:
Mirna P Amaya
Louis Daniel Velasco
Gail Young
Jingbo Yu
William Walders
Agenda
• Definitions
• Review of Medical Malpractice and Tort
Reform
–
–
–
–
Historic Legislation and Policy efforts
National, State malpractice reform
Republican & Democrat Perspective
Policy and Fiscal Implications of various
approaches
• Proposed Legislation
– Rationale, Target Groups, Mechanism,
Financing, Outcomes
Basic Concepts
• Medical malpractice:
A physician's deviation from the
applicable standard of care that a similar
physician would exercise under the
same circumstances.
• Tort:
A wrong or injury committed against a
person or property.
• How do they fit together?
Historic Legislation & Policy
efforts
• 1768—Sir William Blackstone
– Commentaries on the Laws of England
included under mala praxis (from which we
derive the modern word malpractice)
– "Injuries . . . by the neglect or unskillful
management of physician, surgeon, or
apothecary . . . because it breaks the trust
which the party had placed in his physician,
and tends to the patient's destruction."
Mohr, James C. American Medical Malpractice Litigation in Historical
Perspective. JAMA. 2000;283:1731-1737.
History: Context of Establishment
• 1830s-1840s:
– Marketplace professionalism
• Physician: competition, few quality control
• Lawyer: hustling for business of their own
• Malpractice emerged as a tempting new growth
area for aggressive lawyers.
– Other factors
• Sharp decline of religious fatalism
• The nation’s first widespread efforts to improve
physical fitness and its first great food reforms
• Patients were no longer willing to dismiss
unfavorable medical outcomes as either
inevitable or normal.
History: Establishment
• 1850—Medical malpractice litigation was an
established phenomenon.
• Explosion of medical malpractice suits
– 1840 -1860, the number of malpractice cases increased
950%.
• Effect:
– Did it drive charlatans and amateur hacks from the
field?
• No accepted standards
• Physicians became victims of their own medical advance
(orthopedic cases)
– Cut deep chasm between physicians and lawyers
History: continue to expand?
(Two explanations)
•
Development in US medicine
1. Medical innovations: fracture, X-ray tech
•
•
Benefit to patients
Medical mistakes—source of malpractice actions
2. Standards:
•
•
•
AMA(1847): tried to bring order to the medical marketplace
(education, standard, licensing)
Drove unqualified healers from the field;
Rendered physicians more vulnerable to malpractice suits
3. Liability insurance for physicians
•
•
Physicians not had to face the prospect of personal bankruptcy
Guaranteed the perpetuation of the existing system into the 20th
century
History: continue to expand?
•
Development in US law
1. Contingent fee arrangement
•
•
Plaintiffs: risked nothing in bringing charges
Lawyers : gravitated toward cases…
2. Ordinary juries
•
Gave every case a chance
3. The unique nature of tort pleading in the U.S.
•
•
Tort: private civil wrongs that violate understood duties
or social responsibilities
Malpractice: a tort action or a contract action?
– Physicians: No contract relation between physician/patient
•
Malpractice remained a tort: vague, flexible, easily
manipulated
History: tort adjustment
• 1900-1940s
– states began to apply the res ipsa loquitur rule
– the number of actions for medical malpractice
increased sharply
• 1960s
– legitimated a quantum leap in the amount of
money awarded in tort actions
– 1975-1985: The average award in malpractice
actions more than tripled
• Today
– physicians have joined insurers and businesses in
an effort to curtail tort actions and to cap or reduce
tort awards
Malpractice Liability Insurance
• Physicians make up 7 out of 10 malpractice
payments (NPDB Annual Report, 2005)
• Physicians accounted for 52% of estimated
medical malpractice premiums in 1999,
followed by hospitals at 32 percent (source: Conning& Co.
Allied health care, nursing homes and managed care organizations make up the
remainder.)
• Today’s medical malpractice insurance market is
a mix of:
– traditional insurers
– provider owned
– groups (physicians and hospitals) and
– alternative risk transfer entities.
Insurers: Losses & Expenses Paid vs. Premiums Earned
$5.6
$7.3
$5.5
$6.7
97
$5.2
$5.9
$4.9
$5.3
96
$5.1
$4.8
$5.1
$4.8
91
$4.8
90
$4.1
$4.0
$4.1
$4
$4.0
$4.2
$5
$5.2
$6
$4.7
$4.5
$7
Over the period from 1996 through
2001, premium earned rose 16.8%
while losses and expenses rose 68.9%
$4.2
$4.6
$8
$8.6
$ Billions
$9
$3
92
93
94
95
Earned Premiums
98
Underwriting Loss
Source: Computed from A.M. Best data by the Insurance Information Institute
99
00
01
Increasing malpractice tort cost
$2.3
$1.9
$2
$1.5
$4
$1.2
$4.4
$6
$2.9
$3.6
$8.7
$7.9
$7.2
$7.1
$6.8
$7.0
$6.5
$8
$5.4
$10
$7.1
$12
$16.2
$14.6
$13.5
$14
$12.4
$16
•Over the period from 1975 through 2000, medical
malpractice tort costs skyrocketed by 1,642% while
medical costs generally rose 449%, nearly 4 times as fast!
$11.6
$18
$10.8
$20.9
$19.4
$20
$9.4
$22
•Over the period from 1990 through 2000, medical
malpractice tort costs rose 140%, more than double the
60% increase in medical costs generally over the same
period!
$17.6
$ Billions
$0
75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00
Sources: Tillinghast-Towers Perrin, US Bureau of Labor Statistics, Insurance Information Institute
Why do we need tort reform?
•
•
•
•
•
The cost of malpractice insurance rates has been
skyrocketed in the past few years.
Medical Malpractice is a contributor to overall
healthcare cost inflation
Doctors refusing to take on new patients, having
to quit their practices, or relocating to other
states.
If this trend continues, more and more doctors
will be unable to practice, and as a result, more
patients will have difficulty finding proper care.
Other concerns: patient safety, quality control
Tort Reform
• Since 2000, the issues of medical liability
insurance costs and medical malpractice lawsuits
have been prominent on both state and
federal legislative calendars.
• Medical malpractice liability is governed by state
law, but Congress has the power, under the
Commerce Clause of the U.S. Constitution (Art. I,
§ 8, cl. 3), to regulate it.
• In the 108th Congress, the House passed virtually
identical bills (H.R. 5and H.R. 4280) that would
have preempted state law with respect to certain
aspects of medical malpractice lawsuits
National malpractice reform
• Key issue in 2004 Presidential election and
other congressional races (due to keen lobbying)
• In 2005 Proposed Federal Legislation regarding
medical Malpractice
• In 2006 President Bush reiterated a call for
Congressional action on medical liability reform
• Reform has been maintained at the State level
National malpractice reform
• Since 1970’s
• After WWII Nixon ordered a study
– Findings: increase in claims led insurers to increase
premiums charges to unaffordable level or to refusals
to write malpractice insurance (Luce et.al, 2994)
– Every state except West Virginia passed some
Reforms.
– California's Medical Injury Compensation Reform
Act (MICRA) enacted 1975 considered model law
Source: Insurance information Institute: Insurance issues series:
http://server.iii.org/yy_obj_data/binary/729103_1_0/Medmal.pdf
Listing of bills for Medical malpractice
•
1 . Medical Malpractice Insurance Corporation Act (Introduced in
House)[H.R.3865.IH]
2 . Medical Malpractice and Insurance Reform Act of 2005 (Introduced in
House)[H.R.3359.IH]
3 . Medical Malpractice Relief Act of 2005 (Introduced in House)[H.R.2291.IH]
4 . Emergency Malpractice Liability Insurance Commission (EMLIC) Act
(Introduced in House)[H.R.2400.IH]
5 . Comprehensive Medical Malpractice Reform Act of 2005 (Introduced in
House)[H.R.2657.IH]
6 . Improved Medical Malpractice Information Reporting and Competition Act of
2005 (Introduced in House)[H.R.2399.IH]
7 . Comprehensive Medical Malpractice Reform Act of 2005 (Introduced in
House)[H.R.3378.IH]
8 . Medical Malpractice Insurance Antitrust Act of 2005 (Introduced in
Senate)[S.1525.IS]
9 . Freedom From Unnecessary Litigation Act of 2005 (Introduced in
House)[H.R.3076.IH]
13 . Informed Choice Act (Introduced in Senate)[S.755.IS]
14 . National MEDiC Act (Introduced in Senate)[S.1784.IS]
15 . Medical Malpractice Reform Act of 2006 (Introduced in House)[H.R.4838.IH]
16 . Medicare Physician Payment Reform and Quality Improvement Act of 2006
(Introduced in House)[H.R.5866.IH]
17 . National Health Insurance Act (Introduced in House)[H.R.15.IH]
34 . National Insurance Act of 2006 (Introduced in Senate)[S.2509.IS]
35 . National Insurance Act of 2006 (Introduced in House)[H.R.6225.IH]
Arguments for/against Reform
Against
• For
•
•
Effects of the medical liability systems
foster defensive medicine--medical
practice based on fear of legal liability
rather than on patients' best interests
(Kessler, 2006)
•
Medical associations claim that rapidly
increasing premiums & the declining
number of insurers often lead physicians
to stop practicing medicine or to
relocate= shortage of physicians,
especially high-risk specialties eg.
neurology. (McKinley, 2005)
Financial problems in the medical
malpractice line are caused by poor
investment returns and a cyclical
insurance market, rather than by rising
costs.
Source: Insurance information Institute: Insurance issues series:
http://server.iii.org/yy_obj_data/binary/729103_1_0/Medmal.pdf
•
Reform would dismantle state judicial
authority and preempt all existing state
laws governing medical malpractice
lawsuits (National conference fo state legislatures,
2007)
State Reform: 2005
• 48 state legislatures introduced
over 400 bills to address medical
malpractice reform
• 32 states enacted over 60 bills
• 2 states had Supreme Court rulings
on medical liability lawsuit statutes
State Reform: 2006
• 36 state legislatures considering
some type of medical malpractice
legislation (as of May 1)
• 9 states enacted malpractice bills
(as of May 1)
• 13 states are carrying over or
reintroducing legislation from 2005
2005 & 2006: Reform Issues
• Limits to non-economic damage
awards
• Allocation of plaintiff attorney fees
as percentage of damage awards
• Expert witness standards
• Inadmissibility of apology
statements by healthcare
practitioners
State Reform: 2007
• Addressing and facing same issues
as 2005 and 2006
• Greater focus in 2007 on:
– More accountability for insurance
companies by requiring reports from
medical liability insurance providers
– Proposing various state controls on
premium rates
– Exploring litigation alternatives
California Liability Reform
• Medical Injury Compensation Reform Act (MICRA)
in 1975 often cited as the model for legislative reform
at the state level
– $250,000 cap on non-economic damages while
keeping economic compensation as unlimited
– Shortened time lawsuit could be brought to 3 years
– Periodic payment of damages to ensure money is
available to patient in future
• Positive consequences
– Physicians not leaving, actually coming to CA
– Premiums rising much slower
California Positives
• 2004 study on MICRA
– 30% reduction in damages paid by
physicians
– 15% reduction in compensation to
injured patients
– 60% reduction in attorney fees paid
by plaintiff
• Premium increases 1976-2000:
– California = 167%
– US average = 505%
– Florida = over 2000%
Consequences in Critical States
• Effects on physicians:
– retiring early
– relocating to states with better conditions
– refusing to administer high-risk medical
procedures
• Most affected: OB/GYN, rural family
physicians, neurosurgeons, other highrisk specialties
• Effects on patients:
– losing access to care
– safety is jeopardized
– high costs
Stories from Critical States
• Nevada
– UNLV Medical Center closed trauma center for 10
days in 2002 as a result of surgeons quitting for not
being able to afford premiums increased from
$40,000 to $200,000
– Dr. Cheryl Edwards closed her 10 yr. old OB/GYN
practice in Las Vegas after her insurance premium
jumped from $37,000 to $150,000; she now
practices in west LA
– Dr. Frank Jordan: "I did the math. If I were to stay
in business for three years, it would cost me $1.2
million for insurance. I obviously can't afford that.
I'd be bankrupt after the first year, and I'd just be
working for the insurance company. What's the
point?"
Stories from Critical States
• Pennsylvania
– 44 physicians in Delaware County outside of
Philly left the state or stopped practicing in 2001
because of high insurance costs
– 65% of physicians in Chester County said they
were considering moving their practices to another
state
– Frankford Hospital’s three facilities in Philly had
all 12 orthopedic surgeons leave after their
malpractice rates almost doubled to $106,000 in
2001
Florida Malpractice Situation
• Florida Dept. of Insurance reported an increase in
total indemnity payments of 3074% from 1975 to
2001
• 2002 malpractice insurance premium comparisons:
– Miami → $106,497 avg. for specialists and $212,994 avg.
for cardio surgeons
– Los Angeles → $16,148 avg. for specialists and $42,292
vg. for cardio surgeons
• Between 2000 and 2002, more than 30 malpractice
insurance companies left Florida, leaving fewer than
10, thus reducing competition
Early Florida Malpractice
Attempts
• In 1986, Florida legislature passed
a reform bill including a $450,000
cap on non-economic damages
• In 1987, the Florida Supreme
Court declared the cap
unconstitutional
• 2003 – rates and claim numbers at
all time highs had driven all but 4
insurers out
Current Florida Malpractice
Legislation
• Original House bill during regular
session included a $250,000 cap on
non- economic damages, but failed
to move through Senate
• Three special sessions called by
Jeb Bush in summer 2003 where
final bill passed
– $500,000 cap on non-economic
damages which could be increased to
$1,000,000
– $150,000 cap on ER cases which
could increase to $300,000
Florida Current Legislation
• Three-strikes law
– Voters approve trial lawyer backed three-strikes amendment
on physicians in Nov. 2004 election
– Judge rules for temporary injunction of three-strikes rule
late in 2004 giving lawmakers more time to decide how law
would work
– Gov. Jeb Bush signed final bill on three-strikes law in June
2005
– Final form:
• Single incident counts as only one strike
• Florida Board of Medicine has final say on what is or is not a strike
• Out-of state and civil case settlements do not count as strikes
Florida Current Legislation
• Adverse incidents law
– Voters approve trial lawyer backed adverse incidents
amendment on physicians in Nov. 2004 election
– Amendment was also challenged and changed
– Final form signed by Gov. in June 2005
•
•
•
•
Only records created within four years of request
Only patient can request record of pertaining incident
Hospital or physician decide which records to turn over
Patient pays cost of providing the records
Florida Current Legislation
• Attorney fee limitations law
– 3rd amendment approved by voters in
Nov. 2004 was physician backed
– Signed into effect June 2005 without
any changes
– Limits attorney contingency fees
• Patients get 70% of the first $250,000
awarded
• 90% of any money awarded above
$250,000
Medical Malpractice statistics by U.S states
16.00%
Percentages
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
1
States
Alaska
California
Delaware
Florida
Hawaii
Illinois
Maine
Michigan
New Jersey
New York
North Dakota
Ohio
Pennsylvavnia
South Dakota
Texas
Vermont
Wyoming
•http://www.cureresearch.com/medicalmalpractice/medical_malpractice_statistics_by_us_state.ht
m
•http://www.juryverdictresearch.com/Press_Room/Press_releases/Verdict_study/verdict_stu
dy8.html
Trends in Premiums for Physicians’ Medical Malpractice Insurance, by Type of
Physician, 1993-2002.
http://www.cbo.gov/showdoc.cfm?index=4968&sequence=0
http://depts.washington.edu
http://www.manhattan-institute.org/html/cjr_10.htm
http://www.manhattan-institute.org/html/cjr_10.htm
http://www.manhattan-institute.org/html/cjr_10.htm
http://www.manhattan-institute.org/html/cjr_10.htm
Parties Perspectives
•
Republican
– Caps on attorney fees*
– Caps on awards
• Punitive
• Pain & Suffering
– Certificates of Merit
– Insurance
•
• Assistance Funds
– State Provided
– Tax Credits
• Reform*
• Reporting
– Expert Witness Standards*
– Patient Information*
– Periodic Payments
*Used or considered by Florida
Democrats
– Evidence admission of:
• Doctor’s Apologies
• Collateral Source
– Arbitration
– Mandatory Mediation
– Emergency Liability*
• ER (Good Samaritan)
• Volunteer Liability
– Peer Review*
– Loss of License after X guilty
verdicts*
– Revision of Statue of
Limitations
Republican Trends
• Limits to attorney fees
– Lawyers can only collect X%
– Limited to first $X thousand or some % thereof
• Capping awards given to defendants
– Punitive Awards
• Punishment for wrongdoing
– Non-economic (Compensatory) damages
• Pain and Suffering
• Certificates of Merit
– Expert reviews case prior to claimant’s submission
Republican Trends
• Malpractice Insurance
– Assistance funds
• Insurance subsidized by state
– Reporting
• Required to be transparent
• Expert witness standards
– Define the appropriate qualifications of expert
testimony
Republican Trends
• Information disclosure
– Patient information
• Release of information without violating Pt/MD privilege
– Doctor information
• Public access to all doctor’s information
– Amendment 7 “Patients Right to Know about Adverse Medical
Incidents”
• Periodic Payments
– Dispersed via a payment plan
– Stops when Defendant dies or is well
Does Florida List MD Information?
Democratic Trends
• Allowing more evidence
– MD Apologies
– Collateral Source
• MDs insurance coverage admissible
– Coverage
– Limits
Democratic Trends
• Arbitration
– Binding
– Requires 3rd party (judge-like person)
• Mediation
– Voluntary
– Overseen by an independent 3rd party
Democratic Trends
• Waiving Unintentional Liability
– Emergency Situations
– Volunteer Setting
• Peer Review
– Panel Review
• Determines if action should be taken
Democratic Trends
• Loss of license
– Lose privilege to practice after so many guilty
verdicts
• Florida’s Three Strikes
– Amendment 8 Revision of Statues of Limitation
• Statue of Limitations
– Lengthen
– Remove
Envelopes Please!
•
•
•
•
•
Open envelope
Look for your outcome
DO NOT SHOW OTHERS
If “Good Outcome” then do nothing
If your facility messed up, then you
have two options
– Disclose your mistake and pay the money
to the patient (me)
– Cover it up and keep the money
How do we fix it?
Our Proposed Legislation
• Amend the Florida constitution to
remove Amendment 8
– This will be voted on in 2008 as
“Keep neurologists and OB/GYNs
practicing medicine in Florida”
• Propose legislation that includes:
– Removal of Volunteer Liability
– Peer Review prior to trial
Proposed Legislation:
Rationale
1. To ensure the state of Florida is
considered as a place to practice,
by frequently sued specialties.
2. Remove the fear of litigations
from MDs who desire to
volunteer their time.
3. Identify frivolous lawsuits before
they enter the court system.
Proposed Legislation:
Target Groups
•
•
•
•
•
Health care consumers/users
Health care providers
Hospital risk management
Insurance companies
Legal field (lawyers)
Proposed Legislation:
Mechanism
• These Amendment and new
legislation will:
– Remove the barrier for prospective &
existing specialists to practice in
Florida
– Improve access to care for uninsured
– Enable defensible lawsuits to enter
the court system
Proposed Legislation: Outcomes
• Physician will put patients first
instead of fear of lawsuits
– Stewards of healthcare resources
• More throughput through free
clinics
• Drop in amount of frivolous
lawsuits
Smile we are done!
Useful Websites & References
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•
•
•
•
•
•
Medical Malpractice: Implications of Rising Premiums on Access to Health Care, Report
GAO-03-836. Washington, DC: Government Accountability Office, August 2003. (no author
given) Also see: http://www.gao.gov/new.items/d03836.pdf.
Mello, M.M. “Medical Malpractice: Impact of the Crisis and Effect of State Tort Reforms,”
Robert Wood Johnson Foundation, Research Synthesis Report No. 10, May 2006. Also see:
http://www.rwjf.org/publications/synthesis/reports_and_briefs/pdf/no10_researchreport.pdf
CBO (Congressional Budget Office). 2004. “The Effects of Tort Reform: Evidence from the
States.” June. http://www.cbo.gov/ftpdocs/55xx/doc5549/Report.pdf.
Bovbjerg, R.R. and R.A. Berenson. “Surmounting Myths and Mindsets in Medical
Malpractice,” The Urban Institute, October 2005. Also see:
http://www.urban.org/UploadedPDF/411227_medical_malpractice.pdf
AHRQ (Agency for Healthcare Research and Quality). 2005.“Medical Errors & Patient
Safety” (AHRQ online resources, periodically updated.)
http://www.ahrq.gov/qual/errorsix.htm
American Medical Association. 2005. Medical Liability Reform (Web page with links,
continuously updated.) http://www.amaassn.org/ama/pub/category/7861.html
http://www.ncsl.org/standcomm/sclaw/medmalataglance.htm
– 2005 State of the State’s Malpractice Reform
•
http://ww2.doh.state.fl.us/mqaservices/PublicServices.asp
– Florida’s Practitioner Lookup
Useful Websites & References
•
•
•
•
•
•
•
•
•
•
“Florida Three-Strikes Law Targets Doctors”, Nov. 2004,
http://www.foxnews.com/story/0,2933,139533,00.html
“Florida courts take up two tort reform ballot measures”, Jan. 2005,
http://www.ama-assn.org/amednews/2005/01/17/gvsd0117.htm
“Medical Malpractice Crisis Florida’s Recent Experience”, June 2004,
http://www.circ.ahajournals.org/cgi/content/full/109/24/2936
“Florida bills limit scope of liability amendments”, Aug. 2005,
http://www.ama-assn.org/amednews/2005/08/08/gvsb0808.htm
“Last insurance 'fix' hasn't slashed rates”, Mar. 2007, St. Petersburg Times
“Confronting the New Health Care Crisis: Improving Health Care Quality and
Lowering Costs By Fixing Our Medical Liability System”, July 2002, U.S.
Dept. of Health and Human Services
“Medical Malpractice”, Feb. 2007, Insurance Information Institute
“Medical Malpractice Tort Reform”, Feb. 2007,
http://www.ncsl.org/standcomm/sclaw/medmaloverview.htm
“U.S. medical liability trend showing strong signs of improvement”, Dec. 2005,
Healthcare Financial Management
“Medical Liability Reform”, Jan. 2006, http://www.amaassn.org/ama/pub/category/7861.html
Useful Websites & References
•
•
•
•
•
•
Posner KL, Domino KB, Polissar NJ, Conrad DA, Cheney FW: Trends in
Anesthesia Malpractice Lawsuit Payments. Anesthesiology, 101: A-1405,
2004.http://depts.washington.edu/asaccp/ASA/ASAAbstracts/2004_101_A140
5.shtml
Medical Malpractice statistics by U.S states:
http://www.cureresearch.com/medicalmalpractice/medical_malpractice_statisti
cs_by_us_state.htm
National compensatory Jury award median medical-malpractice cases:
http://www.juryverdictresearch.com/Press_Room/Press_releases/Verdict_study
/verdict_study8.html
Trends in Premiums for Physicians’ Medical Malpractice Insurance, by Type
of Physician, 1993-2002.
http://www.cbo.gov/showdoc.cfm?index=4968&sequence=0
Manhatan Institute for Policy Research.,Medical Malpractice Awards,
Insurance and Negligence. http://www.manhattan-institute.org/html/cjr_10.htm
Mayeda et al. BMC Medical Ethics 2005 6:8 doi:10.1186/1472-6939-6-8
Law cases of medical malpractice and results of principle component
analysis of disclosure of medical records.
http://www.biomedcentral.com/1472-6939/6/8/figure/F2