Tort Reform's Impact on Lowering Medical Malpractice Litigation Costs May Be Limited

The price tag of malpractice liability and defensive medicine comes to $55.6 billion a year, or 2.4% of healthcare spending, far lower than the HHS estimate of between $70 billion and $126 billion, a Harvard study says.

And while tort reform efforts to reduce malpractice lawsuit threats, such as those suggested in the Affordable Care Act, might reduce that cost, other efforts underway, such as the remodeling of the healthcare delivery system with "alterations to the fee-for-service system and the incentives it provides for overuse, probably provide greater opportunities for savings."

The report, by Harvard law and public health professor Michelle Mello, associate professor of surgery Atul Gawande, MD and others, is published in this month's journal Health Affairs, a themed issue containing several articles exploring controversial topics of medical mistakes, malpractice lawsuits, and their defense, and the patient-provider atmosphere that can provoke them.

The authors included the sums that malpractice defendants and their insurers pay to plaintiffs, administrative expenses, attorneys' fees, insurer overhead, and defensive medicine costs—defined as the price of providing medical services ordered primarily to minimize physician's liability risk.

They excluded malpractice insurance premiums, which they said "would be double counting," since settlement and jury verdict payouts come from those policy payments.

Defensive medicine made up the bulk of that cost, or $45.6 billion per year, they estimated.

On a positive note, they anticipate that universal coverage provisions in the ACA will reduce medical liability costs because if those harmed now have health coverage, they won't need to sue to recoup medical expenses required to treat or correct conditions caused by medical malpractice. They suggest that the concept of "collateral-source offsets"—the policy in some states that precludes plaintiffs from being awarded health costs if those costs have been covered by health insurance plans.

"A farther-reaching reform that merits discussion would be to impose a federal collateral source offset in connection with the move to universal coverage," they wrote. "In these respects, health reform and liability reform may have unexpected synergies in bending our cost curve down."

Another article in the same issue suggests malpractice award caps and other tort reform laws in some states don't seem to translate to reduced concern among providers about the consequences of being sued.

"We found high levels of malpractice concern among both generalists and specialists in states where objective measures of malpractice risk were low," wrote the authors, Emily Carrier, a senior health researcher at the Center for Health System Change, and colleagues.

The authors wrote "Whether justified or not, physicians' concerns about liability risk are a policy problem because defensive practices raise healthcare costs and may subject patients to unnecessary tests and procedures."

"We also found relatively modest differences in physicians' concerns across states with and without common tort reforms.  These results suggest that many policies aimed at controlling malpractice costs may have a limited effect on physicians' malpractice concerns."

A third paper, by Robert Wachter, MD, associate chair of the Department of Medicine at the University of California San Francisco, says that far too much attention has been given to medication errors and poor sanitation that result in mistakes.

A much unrecognized problem that results in malpractice cases is that of diagnostic error, "which has been strangely absent from the flurry of patient safety activity over the past decade."

Nevertheless, he says, such errors are common. "Approximately one in ten autopsies uncovers some disease or condition that—had its existence been known when the patient was alive —would have altered his or her care or changed their prognosis."  He added that diagnostic error rates average 10% "across a wide range of clinical conditions."

He suggested five approaches to deal with the issue.

• Encourage research on diagnostic errors such as examine training models that may lead to fewer such mistakes.
• Promote actions that reduce errors by emphasizing training that is shown to be associated with better diagnostic performance.
• Use health information technology, such as decision-support systems, if and when they are shown to improve diagnostic accuracy.
• Improve medical teaching through changes to the Accreditation Council for Graduate Medical Education and the Liaison Committee on Medical Education. They "should ensure that residencies and medical schools teach diagnostic reasoning and make more creative use of model patients and simulations in that training."
• Emphasize board certification. Currently, board certification is not mandatory, "and physicians are reassessed quite infrequently during the process of recertification. Most boards require physicians to pass a certifying exam only once every 10 years and many older practitioners have been grandfathered out of this requirement."

He added that these boards need to ensure that their programs emphasize key diagnostic accuracy.

"As the quality and safety movements continue to accelerate, the need to elevate diagnostic errors to their rightful place among safety hazards grows ever more pressing."

In a fourth report in the journal, Marcus Semel, a general surgery resident at Brigham and Women's Hospital in Boston urged hospitals to use the World Health Organization's Surgical Safety Checklist to make significant reductions in postoperative complications.

"Using the checklist generates cost savings once it presents at least five major complications...(and) would both save money and improve the quality of care in hospitals."

A fifth article describes the nation's uneven laws governing medical mistake disclosure and apology. However, Anna C. Mastroianni, an associate professor at the University of Washington School of Law in Seattle and colleagues, says the laws vary greatly in 34 states and the District of Columbia, have major shortcomings.

"These may actually discourage comprehensive disclosures and apologies and weaken the laws' impact on malpractice suits," she wrote.

"Legislation can be ineffective or been counterproductive if it is drafted too narrowly, if healthcare providers overestimate the protection it offers, or if the resulting disclosures or apologies are interpreted by patients as insincere," she wrote.