Medical Malpractice, Liability Landscape, and Tort Reform

Educational Objectives

The goal of this program is to improve patient satisfaction through greater understanding of medical malpractice and the liability landscape. After hearing and assimilating this program, the clinician will be better able to:

1. List the costs associated with tort.
2. Compare the status of liability in anesthesia with other specialties.

Summary

Tort: legally defined as a legal wrong committed upon a person or property independent of contract; in nonlegal language, a person has been harmed and is suing for money or an injunction; all 4 components of tort must be present for a successful lawsuit; duty usually implies a physician-patient relationship; duty must be breached; causation means the breach of duty must have caused damages; damages may involve actual damages (ie, monetary) or noneconomic damages (eg, pain and suffering, reduced life enjoyment, and punitive damages); noneconomic damages are commonly capped in medical malpractice; torts are always civil actions and not criminal actions

Costs associated with tort: Institute of Medicine suggests that ≈100,000 patients are harmed during hospital stays each year; some assert that medical error is the third leading cause of death (debatable); a remedy is required when patients are harmed, but tort is an expensive solution to this issue; tort accounts for ≈2% of health care spending ($35-$55 billion/yr in 2015); according to Domino (2013), the cost of tort in anesthesiology is ≈$5 billion/yr, of which $3.5 billion is payouts; 93% of payouts are settlements; ≈1 in 14 physicians are sued each year; Studdert et al (2006) examined whether malpractice claims are legitimate and concluded that most probably are, but 3% of claims had no verifiable injury; most claims involved medical error, and most of these ended with compensation; 37% of claims did not describe medical error, and most of those did not result in compensation; there were errors in both directions (parties injured with error not receiving compensation, and parties injured without error receiving compensation); 54% of money spent was for administrative expenses; most cases settled, and when physician defendants went to trial, they won ≈80% of cases; data from 2013 showed the median defense cost of settlement was ≈$56,000; it is also expensive when suits are dropped

Tort reform: shortcomings of the tort system include opportunism, unfair rules, wrong decisions, high damage awards, defensive medical practice (performing actions that are not the standard of care in order to defend oneself), physician dissatisfaction, physicians leaving states with high liability environments, and injured parties not receiving much of the financial compensation; one solution is tort reform, which involves changing the laws; caps can be introduced for economic or noneconomic damage; "I am sorry" laws or provider apology rules stipulate that an apology is not admissible as evidence of guilt; payment trusts and state funds set aside money from hospitals (eg, birth injury funds) for injured parties to avoid lawsuits; statute of limitations restrictions set time limits on lawsuits; joint and several liability vs fair share rules involve multiple liable defendants; contingency fee limitations set restrictions on how much of the award attorneys are entitled to; communication and resolution systems can be facilitated by the law; the American Medical Association has advocated for safe harbors for evidence-based medicine (lawsuits are dismissed if the physician was practicing evidence-based medicine)

The Medical Injury Compensation Reform Act (MICRA) Modernization Act of 2022 in California: changes the previous version of MICRA, which capped noneconomic damages; it also improves apology laws to allow clinicians to offer a sincere apology to the patient, with full disclosure of events, without being this admissible as financial liability

Effects of tort reform: there is a time lag between enacting tort reform and evaluating its effects; researchers suggest that states that have enacted tort reform have more physicians than states that have not; insurance premiums are typically lower with tort reform, and defensive lawsuits are less expensive

The University of Michigan Health System Communication and Resolution of Differences system: involves internal examination of the event that comes to their attention by the potential plaintiff or by an internal incident report; they decide if a medical error occurred and, if so, they apologize, acknowledge fault, and offer compensation (usually accepted); if there is no error, then they inform the potential plaintiff and defend the lawsuit, if filed; the settled cases are in the name of the university rather than the involved individual; incidents are not reported to national databases or medical boards; results — the number of claims and the dollars spent per claim decreased

Other systems: studies of other health care systems found that disclosure claims might not decrease; the University of Pittsburgh Medical Center reported that hospital-acquired infections required reporting to patients after introducing a tort reform system; total claims did not increase, but payouts did

Impact of apology: studies suggest that payment size is reduced, especially for severe injuries; patients and their families appreciate honesty and transparency in communication; apology laws differ by state; several are generic (ie, no different from automobile accident apology laws); some laws have medical-specific apologies, but these may be incomplete; the language of apology law is important; apologies set the stage for an atmosphere of honesty instead of confusion and defensiveness

Status of liability in anesthesia: anesthesia was previously a high-liability profession but is now at lower risk than the average; the American Society of Anesthesiologists Closed Claims Project analyzed claims to develop safety recommendations; closed claims data are also assessed by, eg, the Harvard Controlled Risk Insurance Company (CRICO) database, insurance consortiums, and states; the median payment was ≈$330,000 in 2013; premiums and costs vary highly by state and the litigation environment

Anesthesia Patient Safety Foundation (APSF): the death rate used to be 1 in 6000 and is now <1 in 200,000; monitoring has improved, eg, end-tidal carbon dioxide measurement and pulse oximetry; anesthesia accounted for ≈8% of claims in 1972 and ≈3.8% of claims in 2015; policy premiums in aggregate have also decreased (in 2019 dollars), although they have increased slightly the last 2 to 3 yr; pain medicine is a higher liability specialty because clinicians are performing higher-risk procedures, eg, spinal cord stimulators and cervical injections

Arguments against tort reform: tort reform is opposed by, eg, plaintiff attorneys and other groups who want more money; the arguments include that reducing the statute of limitations encourages more lawsuits, that malpractice litigation has made anesthesia safer, that there has been no significant reduction in costs to the health care system, that caps are not adjusted for inflation and should be unlimited, that attorney fees take so much from the damage amount that the latter should be increased, that minor and moderate injuries are not well compensated, and that “defensive medicine” does not exist (ie, that medical malpractice does not change physician behavior)

Reform regression: typically involves widening the encashment area; a Minnesota case defined the duty element of tort to involve foreseeable harm and not necessarily an established physician-patient relationship; in Florida, a new law states that anything in a patient's record (including, eg, peer review information) is discoverable; in Illinois, noneconomic damage caps are unconstitutional; ASPF released a statement about a case that garnered national attention (reckless homicide and felony abuse of an impaired adult) that criminalization of medical error is contrary to patient safety and medical progress

Readings

Agarwal R, Gupta A, Gupta S. The impact of tort reform on defensive medicine, quality of care, and physician supply: A systematic review. Health Serv Res. 2019;54(4):851-859. doi:10.1111/1475-6773.13157; Domino KB. Medical liability insurance: the calm before the storm? ASA Newsl. 2013:77(10):54-56; Institute of Medicine (US) Committee on the Roles of Academic Health Centers in the 21st Century; Kohn LT, editor. Academic Health Centers: Leading Change in the 21st Century. Washington (DC): National Academies Press (US); 2004. EXECUTIVE SUMMARY. Available from: http://www.ncbi.nlm.nih.gov/books/NBK221671/; Jimenez N, Posner KL, Cheney FW, et al. An update on pediatric anesthesia liability: A closed claims analysis. Anesth Analg. 2007;104(1):147-153. doi:10.1213/01.ane.0000246813.04771.03; Nelson L, Swanson A, Buckley M. Lebron v. Gottlieb Memorial Hospital: capping medical practice reform in Illinois. Ann Health Law. 2011;20(1):1; Ronquillo Y, Pesce MB, Varacallo M. Tort. In: StatPearls. Treasure Island (FL): StatPearls Publishing; July 4, 2022; Ross NE, Newman WJ. The role of apology laws in medical malpractice. J Am Acad Psychiatry Law. 2021;49(3):406-414. doi:10.29158/JAAPL.200107-20; Studdert DM, Mello MM, Brennan TA. Defensive medicine and tort reform: a wide view. J Gen Intern Med. 2010;25(5):380-381. doi:10.1007/s11606-010-1319-8; Studdert DM, Mello MM, Gawande AA, et al. Claims, errors, and compensation payments in medical malpractice litigation. N Engl J Med. 2006;354(19):2024-2033. doi:10.1056/NEJMsa054479; Thomas JW, Ziller EC, Thayer DA. Low costs of defensive medicine, small savings from tort reform. Health Aff (Millwood). 2010 Sep;29(9):1578-1584; Van Pelt M, Meyer T, Garcia R, Thomas BJ, Litman RS. Drug Diversion in the Anesthesia Profession: How Can Anesthesia Patient Safety Foundation Help Everyone Be Safe? Report of a Meeting Sponsored by the Anesthesia Patient Safety Foundation. AANA J. 2019;87(1):1-4.

Disclosures

For this program, members of the faculty and planning committee reported nothing relevant to disclose.

Acknowledgements

Dr. Smith was recorded at the 70th Annual Convention and Conclave of the American Osteopathic College of Anesthesiologists, held September 17-20, 2022, in Phoenix, AZ, and presented by the American Osteopathic College of Anesthesiologists. For information on future CME activities from this presenter, please visit https://www.aocaonline.org/. Audio Digest thanks the speakers and the American Osteopathic College of Anesthesiologists for their cooperation in the production of this program.

CME/CE INFO

Accreditation:

The Audio- Digest Foundation is accredited by the Accreditation Council for Continuing Medical Education to provide continuing medical education for physicians.

The Audio- Digest Foundation designates this enduring material for a maximum of 1.00 AMA PRA Category 1 Credits™. Physicians should claim only the credit commensurate with the extent of their participation in the activity.

Audio Digest Foundation is accredited as a provider of continuing nursing education by the American Nurses Credentialing Center's (ANCC's) Commission on Accreditation. Audio Digest Foundation designates this activity for 1.00 CE contact hours.

Lecture ID:

AN650702

Expiration:

This CME course qualifies for AMA PRA Category 1 Credits™ for 3 years from the date of publication.

Instructions:

To earn CME/CE credit for this course, you must complete all the following components in the order recommended: (1) Review introductory course content, including Educational Objectives and Faculty/Planner Disclosures; (2) Listen to the audio program and review accompanying learning materials; (3) Complete posttest (only after completing Step 2) and earn a passing score of at least 80%. Taking the course Pretest and completing the Evaluation Survey are strongly recommended (but not mandatory) components of completing this CME/CE course.

Estimated time to complete this CME/CE course:

Approximately 2x the length of the recorded lecture to account for time spent studying accompanying learning materials and completing tests.