What's New with HCFO - 06/16/2006 (Plain Text Version)In this issue: The Current Malpractice Crisis Cycle?
Malpractice crises are not new to the healthcare system and in fact appear to resurface about every ten years. The most recent focus on the issue has prompted legislation designed to cap damages as a way to keep health care costs under control and malpractice insurance affordable. Unfortunately, the legislative effort has stalled and policymakers remain mired in the complex issues surrounding liability insurance and the attendant impact on cost, quality and access in the healthcare system. Using Evidence to inform Legislative Efforts What emerges from a review of the malpractice literature is a realization that few studies can provide the definitive evidence needed by policymakers to draw unequivocal conclusions about the nature of the malpractice crisis and solutions that hold the most promise. The malpractice policy debate was highlighted earlier this spring in the United States Senate, as legislators defeated two bills aimed at capping noneconomic awards in malpractice lawsuits. While a bill proposed by Senator Rick Santorum (R-Pa) would have capped such damages in suits brought against ob-gyns, a bill introduced by Senator John Ensign’s (R-Nev) would have instituted a cap for noneconomic damages in suits against all individual health care providers. However, neither bill garnered enough votes to allow the legislation to move to the Senate floor.1 Senators Hillary Rodham Clinton (D-N.Y.) and Barack Obama (D-Ill) have taken a patient-safety approach aimed at reducing the number of claims, lawsuits, and overall annual litigation costs. By authoring a new bill that would provide grant money to hospitals and providers to improve error disclosure programs, the senators hope to increase transparency between providers and patients and reduce the frequency of malpractice claims.2 Their bill, entitled, the “National Medical Error Disclosure and Compensation Act or the National MEDiC Act” was introduced in September 2005 and referred to the Committee on Health, Education, Labor, and Pensions pending further action.3 The exact nature of the current malpractice crisis is debated. Moreover, values and preferences often overshadow research and evidence in the policymaking process. Malpractice studies are complicated and open to varying “interpretations” depending on the point of view of the user. The challenge for policymakers is deciphering key findings from malpractice studies, often with disparate conclusions, to reach solutions that will resolve rather than recycle the malpractice crisis. Evidence on Premium Volatility and Physician Services Malpractice premiums are on the rise, with high risk specialists bearing the brunt of the increase.4 Clear evidence on the effect of premium increases on the availability and nature of physician services is limited. Baicker & Chandra (2005) reported that neither premiums nor claims payments significantly affected physician supply.5 Gius (2000) found that states with above-average medical malpractice insurance premiums had significantly fewer physicians per capita.6 Erus (2004) reported that none of the indicators of malpractice risk showed a significant association with physician supply.7 In a synthesis of malpractice literature supported by the Robert Wood Johnson Foundation, Michelle Mello analyzes the strengths and weaknesses of these and other studies and points out that while it is noteworthy that anecdotal assertions about the malpractice crisis are slowly being replaced by hard data, the significance of the findings can be mixed and the results must be examined in the context of the studies’ limitations.8 Evidence on the Effectiveness of Tort Reforms States have enacted a variety of tort reforms in response to the malpractice crisis and studies examining the effects of these purported solutions on physician supply, like the studies analyzing premium effects, have strengths and limitations.9 Kessler et al. (2005) found a 3% growth rate in physician supply in states with direct tort reform, with some variation by specialty.10 Matsa (2005) found little association between overall physician supply and damage caps.11 Encinosa and Hellinger (2005) reported that counties subject to any damages cap had 2% more physicians per capita than counties without caps.12 The findings which emerge from these and other studies are based on a variety of datasets and research methods. Whether a researcher elects to use physician surveys or administrative datasets or whether they elect to use a direct measure of liability costs rather then an indirect measure will influence the findings.13 Accordingly, policymaker who draw support from malpractice studies must do so with the understanding that there may be challenges to the evidence, which in turn may undercut the strength of reform proposals. Next Steps It is unclear whether Congress will take up the malpractice debate again this year, or how future proposals may be structured. Recommended proposals to change the medical liability system vary from tort reform to experimentation with alternative reform approaches such as damage schedules, patient safety initiatives, disclosure and early offer programs, and health courts.14 Avoidable classes of events (ACE), an add-on to administrative compensation systems, is another non-tort reform approach which would automatically compensate victims for injuries deemed “generally avoidable.”15 As the malpractice debate continues, HCFO-funded work may help to better inform policy solutions. Focusing on malpractice premiums, HCFO grantee Michael A. Morrisey, University of Alabama at Birmingham, examined how changes in tort law and economic conditions affect malpractice premiums. He concluded that caps on noneconomic damages can reduce the growth rate of malpractice premiums. He also demonstrated that the growth rate of malpractice premiums were reduced when investment returns were higher. Morrisey’s work could help inform policy-makers on the extent to which various interventions reduce malpractice premiums. In addition, HCFO grantee Randall Bovbjerg, JD and his colleagues at the Urban Institute have studied the extent to which greater transparency during the provider-patient interaction might reduce malpractice litigation. He found that although providers are reluctant to disclose errors due to the impact of the liability experience, the push by accreditation organizations for such disclosures was creating some movement toward greater transparency. Bovbjerg’s findings may provide for solutions designed to increase the number of error discloser programs. The crux to developing a workable solution to the malpractice crisis may be best summed up by Daniel Patrick Moynihan who said, “While all men are entitled to their own opinions, they are not entitled to their own facts.” Extracting the facts from complex malpractice research and using those facts to create policy solutions is the goal. To date, no one solution has resolved the crisis; it may be a host of solutions addressing the many complexities of this issue, which eventually curtail the continuing malpractice crisis cycle. HCFO Funded Research
1 “Senate Defeats Bills That Would Have Capped Noneconomic Damages in Medical Malpractice Cases”. Kaiser Daily Health Policy Report, Tuesday May 9, 2006. |