Medical Malpractice Tort Reforms

1
Medical Malpractice Tort Reforms

• Group A
• Mirna P Amaya
• Louis Daniel Velasco
• Gail Young
• Jingbo Yu
• William Walders

2
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

3
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?

4
Historic Legislation Policy efforts

• 1768Sir 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. 20002831731-1737.

5
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 nations 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.

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History Establishment

• 1850Medical 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

8
History continue to expand?(Two explanations)

• Development in US medicine
• Medical innovations fracture, X-ray tech
• Benefit to patients
• Medical mistakessource of malpractice actions
• 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
• 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

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History continue to expand?

• Development in US law
• Contingent fee arrangement
• Plaintiffs risked nothing in bringing charges
• Lawyers gravitated toward cases
• Ordinary juries
• Gave every case a chance
• 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

11
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

12
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.)
• Todays medical malpractice insurance market is a
  mix of
• traditional insurers
• provider owned
• groups (physicians and hospitals) and
• alternative risk transfer entities.

13
Insurers Losses Expenses Paid vs. Premiums
Earned
Over the period from 1996 through 2001, premium
earned rose 16.8 while losses and expenses rose
68.9
Source Computed from A.M. Best data by the
Insurance Information Institute
14
Increasing malpractice tort cost

• 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!
• 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!

Sources Tillinghast-Towers Perrin, US Bureau of
Labor Statistics, Insurance Information Institute
15
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

16
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

17
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

18
National malpractice reform

• Since 1970s
• 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

19
Listing of bills for Medical malpractice

• 1 . Medical Malpractice Insurance Corporation Act
  (Introduced in House)H.R.3865.IH2 . Medical
  Malpractice and Insurance Reform Act of 2005
  (Introduced in House)H.R.3359.IH3 . Medical
  Malpractice Relief Act of 2005 (Introduced in
  House)H.R.2291.IH4 . Emergency Malpractice
  Liability Insurance Commission (EMLIC) Act
  (Introduced in House)H.R.2400.IH5 .
  Comprehensive Medical Malpractice Reform Act of
  2005 (Introduced in House)H.R.2657.IH6 .
  Improved Medical Malpractice Information
  Reporting and Competition Act of 2005 (Introduced
  in House)H.R.2399.IH7 . Comprehensive Medical
  Malpractice Reform Act of 2005 (Introduced in
  House)H.R.3378.IH8 . Medical Malpractice
  Insurance Antitrust Act of 2005 (Introduced in
  Senate)S.1525.IS9 . Freedom From Unnecessary
  Litigation Act of 2005 (Introduced in
  House)H.R.3076.IH13 . Informed Choice Act
  (Introduced in Senate)S.755.IS14 . National
  MEDiC Act (Introduced in Senate)S.1784.IS15 .
  Medical Malpractice Reform Act of 2006
  (Introduced in House)H.R.4838.IH16 . Medicare
  Physician Payment Reform and Quality Improvement
  Act of 2006 (Introduced in House)H.R.5866.IH17
  . National Health Insurance Act (Introduced in
  House)H.R.15.IH34 . National Insurance Act of
  2006 (Introduced in Senate)S.2509.IS35 .
  National Insurance Act of 2006 (Introduced in
  House)H.R.6225.IH

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Arguments for/against Reform

• Against
• 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)

• 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)

22
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

23
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

24
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

25
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

26
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

27
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

28
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 high-risk specialties
• Effects on patients
• losing access to care
• safety is jeopardized
• high costs

29
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?"

30
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 Hospitals three facilities in Philly
  had all 12 orthopedic surgeons leave after their
  malpractice rates almost doubled to 106,000 in
  2001

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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

33
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

34
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

35
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

36
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

37
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

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Medical Malpractice statistics by U.S states

• http//www.cureresearch.com/medicalmalpractice/med
  ical_malpractice_statistics_by_us_state.htm

40

• http//www.juryverdictresearch.com/Press_Room/Pres
  s_releases/Verdict_study/verdict_study8.html

41
Trends in Premiums for Physicians Medical
Malpractice Insurance, by Type of Physician,
1993-2002.
http//www.cbo.gov/showdoc.cfm?index4968sequence
0
42
http//depts.washington.edu
43
http//www.manhattan-institute.org/html/cjr_10.htm
44
http//www.manhattan-institute.org/html/cjr_10.htm
45
http//www.manhattan-institute.org/html/cjr_10.htm
46
http//www.manhattan-institute.org/html/cjr_10.htm
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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

• Democrats
• Evidence admission of
• Doctors 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

Used or considered by Florida
49
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 claimants
  submission

50
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

51
Republican Trends

• Information disclosure
• Patient information
• Release of information without violating Pt/MD
  privilege
• Doctor information
• Public access to all doctors 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

52
Does Florida List MD Information?
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Democratic Trends

• Allowing more evidence
• MD Apologies
• Collateral Source
• MDs insurance coverage admissible
• Coverage
• Limits

55
Democratic Trends

• Arbitration
• Binding
• Requires 3rd party (judge-like person)
• Mediation
• Voluntary
• Overseen by an independent 3rd party

56
Democratic Trends

• Waiving Unintentional Liability
• Emergency Situations
• Volunteer Setting
• Peer Review
• Panel Review
• Determines if action should be taken

57
Democratic Trends

• Loss of license
• Lose privilege to practice after so many guilty
  verdicts
• Floridas Three Strikes
• Amendment 8 Revision of Statues of Limitation
• Statue of Limitations
• Lengthen
• Remove

58
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

59
How do we fix it?
60
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

61
Proposed LegislationRationale

• To ensure the state of Florida is considered as a
  place to practice, by frequently sued
  specialties.
• Remove the fear of litigations from MDs who
  desire to volunteer their time.
• Identify frivolous lawsuits before they enter the
  court system.

62
Proposed LegislationTarget Groups

• Health care consumers/users
• Health care providers
• Hospital risk management
• Insurance companies
• Legal field (lawyers)

63
Proposed LegislationMechanism

• 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

64
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

65
Smile we are done!
66
Useful Websites References

• 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/d038
  36.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/doc
  5549/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_ma
  lpractice.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/medmalataglanc
  e.htm
• 2005 State of the States Malpractice Reform
• http//ww2.doh.state.fl.us/mqaservices/PublicServi
  ces.asp
• Floridas Practitioner Lookup

67
Useful Websites References

• Florida Three-Strikes Law Targets Doctors, Nov.
  2004, http//www.foxnews.com/story/0,2933,139533,0
  0.html
• Florida courts take up two tort reform ballot
  measures, Jan. 2005, http//www.ama-assn.org/amed
  news/2005/01/17/gvsd0117.htm
• Medical Malpractice Crisis Floridas Recent
  Experience, June 2004, http//www.circ.ahajournal
  s.org/cgi/content/full/109/24/2936
• Florida bills limit scope of liability
  amendments, Aug. 2005, http//www.ama-assn.org/am
  ednews/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.ama-assn.org/ama/pub/category/7861.html
  

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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/ASAAbs
  tracts/2004_101_A1405.shtml
• Medical Malpractice statistics by U.S states
  http//www.cureresearch.com/medicalmalpractice/med
  ical_malpractice_statistics_by_us_state.htm
• National compensatory Jury award median
  medical-malpractice cases http//www.juryverdictr
  esearch.com/Press_Room/Press_releases/Verdict_stud
  y/verdict_study8.html
• Trends in Premiums for Physicians Medical
  Malpractice Insurance, by Type of Physician,
  1993-2002. http//www.cbo.gov/showdoc.cfm?index49
  68sequence0
• 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 68  
  doi10.1186/1472-6939-6-8 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