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Anyone interested in ignoring the propaganda and taking an objective look at medical liability reform should read "New Directions in Medical Liability Reform," an article co-written by an M.D. and a Ph.D. and published in the April 20, 2011 New England Journal of Medicine (NEJM).

In assessing the effectiveness of past attemtps at medical liability reforms, the NEJM authors identify the opposing interests as follows:

Discussions about malpractice reform often start with physicians’ and insurers’ complaints about the system, which include the high cost of malpractice insurance coverage, the number of nonmeritorious suits, the size and unpredictability of jury awards, and the inefficiency of litigation as a mechanism for resolving disputes. Each of these complaints finds an empirical basis in studies of malpractice claims11,12 and in the volatility seen in malpractice premiums over the past 10 years.13 Yet patients and attorneys also reasonably object that the current tort system is hard for many injured patients to access, takes an unreasonable amount of time and expense to deliver compensation, and often results in different litigation outcomes for patients with similar injuries.9 The best estimates are that only 2 to 3% of patients injured by negligence file claims, only about half of claimants recover money, and litigation is resolved discordantly with the merit of the claim (i.e., money is awarded in nonmeritorious cases or no money is awarded in meritorious cases) about a quarter of the time. 11,12 Thus, from the perspectives of these stakeholders, evaluations of system reforms should consider the frequency with which claims are brought, the amounts that plaintiffs receive, the amounts that are lost to overhead expenses in the litigation process, and the ways in which these factors translate into insurance premiums.

The authors then focus the discussion on measuring how the liability system affects clinical care, including patient safety and the cost, quality, and availability of health care. The authors acknowledge that "[a] key purpose of the liability system is to encourage health care providers to deliver care at a socially optimal level of safety, … to encourage iinstitutions to adopt safer systems, and…spur individual providers to use greater care in practice." Indeed, because of medical malpractice cases, most, if not all, private hospital OR teams have mandatory protocols for counting surgical sponges, towels, and instruments to help protect against sewing up the patient with foreign objects left inside his body. As a result, these cases have become relatively rare. On the other hand, military hospitals, which are often immune from tort liability under the Feres Doctrine, seem to have a much higher incidence of malpractice involving foreign objects left in the patient. It’s all about incentives.

I’ve always been a free-market proponent. That’s why I honestly believe that too much regulation of the liability system is a very bad idea. History tells us that the liability system weeds out the bad apples and helps the most meritourious, whether they be doctors or manufacturers of products. Talk to any medical device representative or surgical nurse and they will tell you who are the horrible surgeons and who are the great surgeons. If the public had this information, the great surgeons would benefit. But enough about economic theory, back the the NEJM article. Here’s some more from the authors:

The tort system can affect clinical care either by design or because of unintended consequences. A key purpose of the liability system is to encourage health care providers to deliver care at a socially optimal level of safety. A well-functioning liability system thus should encourage institutions to adopt safer systems and should spur individual providers to use greater care in practice. These investments, in turn, should result in fewer adverse events and higher-quality care. An oppressive liability environment, on the other hand, can have the unintended effect of “overdeterrence” — causing unwanted provider practices aimed primarily at avoiding liability.7,15 These practices include defensive medicine, in which providers avoid high-risk patients or services or order extra tests, referrals, and services primarily to reduce their liability risk.

A liability reform may perform very differently across liability-related and care-related criteria, and improvements in some measures may come at the expense of others. For example, caps on damages may be successful in lowering premiums and reducing defensive practices, but they may also weaken the incentive to practice safely, resulting in decreased quality of care. Assessments of the efficacy of reforms thus need to consider the entire picture to properly calculate the overall value of reforms for all stakeholders.

Under the heading, "The Evidence on Traditional Tort Reforms," here’s what the authors conclude:

Our review yielded two main conclusions. First, evaluations of traditional tort reforms have remained heavily focused on metrics related to liability costs, with most care-related measures receiving relatively short shrift. Second, the evidence reveals that, with few exceptions, traditional tort reforms have not proved to provide many improvements in these liability metrics (Table 3).

The authors also point out the obvious conclusion that caps on noneconomic damages, which limit the amounts that juries may award for pain and suffering, reduce the size of indemnity payments. But, studies cited by the authors fail to prove conclusively that caps effect insurance premiums or increase the supply of physicians in a state. In Virginia, we have an absolute cap on the amount of the jury verdict. In other words, it is not a cap on noneconomic damages, but a cap on damages. The problem with such a cap is best illustrated by the case of obstetrical malpractice that results in the birth of a brain damaged baby who is faced with a full life expectancy requiring institutional care estimated to cost over $10 million. If the award is capped at $2 million, the cost of the physician’s negligence is shifted from the physician and his insurer to the parents and, if they are not extremely wealthy, the taxpayers.

Finally, for those who call themselves conservative but advocate legislation allowing the federal government to interfere with a private citizen’s contract with her lawyer, the NEJM article concludes that there is little or no evidence to show that limits on attorneys’ fees (or the elimination of joint–and-several liability) are effective. Maybe I should add that non-conservatives who feel the need to pander to the right (read, the Obama administration) should also read this article.


  1. Gravatar for Jim O'Hare RPLU AIC IAS
    Jim O'Hare RPLU AIC IAS

    A good article that weaves in and out of many different issues.

    I've been handling med mal claims since 1985. This is true = Fatigue and communication probably accounts for most of the medical incidents. Get more nurses and dispatch with the archaic resident hazing via 72 hour shifts. Start there. Why is the obvious never obvious?

    Make PL insurance mandatory with a minimum limit of $500k. I need it to drive, so do you.

    A cap for non economics is a necessity. It is an upper limit, not a starting point. Pain is subjective, no other cause of action is. Cant be weighed, counted nor measured. How would you go about arguing that $150k worth of pain is actually worth $275k. Cant do it.

    More money needs to get in the injured patients wallet. Give each case a one year limit from discovery to trial. THats the rule, make your case fit into it. Arbitration ! Use structures!

    A jury of college grads for med mal cases to shrink the peer gap. It is an insult to have a HS dropout decide whether a Doctor with a dozen years of post HS education and training is at the mercy of Joe the plumber If Doc Smith robbed a bank, Joe would be fine.

    Good cases get settled. Carriers only try those cases that are slam dunk winners and they still lose 20% of the time.

    What would happen if every new lawsuit was served with all of the records, expert opinion and thoeries of negligence, causation link and assessment of damages. Maybe loser pays.

    Reasonable fixes? terrorist or freedom fighter?


    Jim O'Hare Director of Claims Medicus ins Austin Tx

  2. Gravatar for Michael Phelan


    Thank you for your thougthful comments. What are your thoughts on the current use of hospitalists? My mother just had hip surgery, and it took forever to get to get a doctor to see her post-surgery because the doctor had several hospitals to cover. Some other food for thought. The Constitution guarantees one a right in a civil case to trial by a jury of his peers. How do you tell the HS dropout that the Seventh Amendment does not apply to him in cases where physicians are defendnants? Perhaps the lawyers need to do a better job making the case understandable to 10th graders. In Virginia, we have a global cap (not just for non-economic damages) and a requirement that the case be certified by experts before it is filed. Yet, medical malpractice cases do not settle at anywhere close to the rate of other civil cases. From the plaintiff lawyer's perspective, it makes no economic sense to file a weak case.

    Best regards,

    Mike Phelan

  3. Gravatar for Jim O'Hare RPLU AIC IAS
    Jim O'Hare RPLU AIC IAS

    I believe hospitalists are a product of what we are calling healthcare, it is really just catastrophe coverage. A hospitalist is a traffic cop. I think that there is a place for them , but not sure what it is.

    Sorry to hear about mom. Where the heck is the orthopedist ? Doctors need to treat the whole patient. Hospitalist is ill defined in my opinion.

    They should be stiring the pot for the patient, a concierge. The overseer.

    The right to a jury of peers is exclusively for the defendant. Who cares about what the HS dropout thinks, versus the physicians contributions to society !

    Look at the definition of peer in any book- try Blacks. Like rank and station in the community. The disparity in education between defendant and juror, in med mal cases, is a silver bullet for the plaintiff. The focus needs to be on the defendant not the juror. What does the juror have to lose?

    Asking Joe the plumber to determine whether Dr Smith performed the choleducojejunostomy within the standard, and was it causative of the pancreatitis, and subsequent failed Whipple procedure, is a little much. I would suggest a college degree to sit as a juror. Teachers, accountants, lawyers, chiropractors etc. Do you want smart jurors? They probably wont help you, and what does that say about the system?

    You state,"It makes no economic sense to file a weak case."??

    Really? Isnt that the point. Would you file a weak case but for the economics? Good cases should get filed and they should settle. I think that the rate of settlement is much higher than you think.

    Virginia has a requirement for a $2 mil limit. The highest nationwide. If you get a $2mil verdict, you can actually collect it. THe same case in Florida, that has a $250k limit, hurts your client's chances of actually getting paid.

    Let us dispense with the notion that any of this has anything to do with justice, it is about money. A jury coming back in your favor and awarding 20 bucks is justice, congratulations, you won. Feels like you lost and that is part of my point.

    Argue for mandatory coverage and higher limits, loser pays, and sanctions for frivolity, with a touch of peer pools, equals a great start for all.

    Regards Jim O'Hare

    Dir of Claims

    Medicus ins co

    Austin Tx

  4. Gravatar for Jeffrey Ziegler

    Each time I see Feres, then I have a gag reflex. Be aware that it also protects the US military from legal malpractice.

    While I was on active duty with the US Army, I was threatened by a US Army lawyer named Captain Matthew Fitzgerald to do something which was contrary to the US Army legal regulations (which I did not know at the time but he did). Fitzgerald’s motive was to tout this as his first accomplishment on his annual performance report of which I later got a copy. This threat resulted in my losing over $50,000 of my personal funds.

    When I asked the top lawyer (now Lieutenant General Dana Chipman) for assistance, the first thing they did was appoint Fitzgerald’s previous boss and a very obvious friend to “investigate.” Since there was no wrongdoing found as a result of this faux investigation but specifics were protected by the Privacy Act , I filed the same complaint with Fitzgerald’s Oregon State Bar which is NOT PROTECTED under privacy laws. Evidence showed that Fitzgerald lied no less than 10 times to his Oregon State Bar.

    It was all thrown out of federal court due to Feres although I had a slam-dunk case with all evidence in my favor. In fact, I was never even able to get into court and present my case. The judge simply had his law clerks cut-and-paste a previous reply to a previous case. Just to add insult to my financial injury, Fitzgerald got promoted to Major. Feres was NEVER designed 50 years ago to protect against corruption, misdeeds, and cover-ups by US Army lawyers. Today it protects against everything.

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