Tag Archives: Med Mal

SOTU: Medical Malpractice Reform

In his State of the Union address last night President Obama mentioned a key issue for property/casualty insurers: medical malpractice reform.

I’m willing to look at other ideas to bring down [healthcare] costs, including one that Republicans suggested last year – medical malpractice reform to rein in frivolous lawsuits.†

President Obama’s comments follow landmark healthcare reform that failed to consider malpractice reform.

So what are we to make of this latest call?

Fortunately a number of commentators and bloggers have done the analysis. Here’s their take on the matter:

Over at Forbes Health Dollars blog, David Whelan says the President’s endorsement of malpractice reform warrants skepticism and offers some circumstantial evidence to support his view. His conclusion is that we shouldn’t get too excited just yet.

The Fact Checker at the Washington Post makes the point that President Obama favors certain ways of trying to lower costs related to malpractice, such as state incentives aimed at curbing lawsuits – rather than federal damage caps that Republicans favor.

Meanwhile, The Hill’s Healthwatch blog reports that senior Senate Democrats are highly skeptical of the President’s call for medical malpractice reform. Senator Patrick Leahy (D-VT), chairman of the Senate Judiciary Committee, is quoted saying he would only support such reform if it was part of broader legislation that included other fixes such as a controversial proposal to repeal insurers’ exemption from federal antitrust rules.

We should mention that numerous studies have shown that tort reforms, particularly caps on non-economic damages, are a key contributor to lowering health care costs.

Check out the I.I.I. backgrounder on medical malpractice.

Disclosure of Medical Errors a Positive for Liability Costs

Studies have shown that tort reforms, particularly caps on noneconomic damages, are a key contributor to lowering medical liability claims and costs and ultimately healthcare costs.

Better risk management by hospitals – such as prompt disclosure of medical errors — is also being shown to help reduce these costs.

The Annals of Internal Medicine reports that during  the period in which a program was implemented at the University of Michigan Health System (UMHS) to fully disclose medical errors to patients and offer compensation, there was a reduction in the number of new claims filed and a decline in lawsuits.

After the program was implemented, the average monthly rate of new claims decreased from 7.03 to 4.52 per 100,000 patient encounters.

The average monthly rate of lawsuits decreased from 2.13 to 0.75 per 100,000 patient encounters, while the median time from claim reporting to resolution declined from 1.36 to 0.95 years.

There are a couple of caveats to the study findings. As noted by the Wall Street Journal health blog, whether the costs and number of claims declined as a result of the program is not clear, since there was no control group.

In addition, malpractice claims in general were on the decline in Michigan in the latter part of the study period.

Still, the fact that total liability claims and liability costs did not increase during the implementation of the UMHS program is a positive.

Medical errors are extremely costly. A study recently completed by consultants with Milliman and commissioned by the Society of Actuaries (SOA) estimated that measurable medical errors cost the U.S. economy $19.5 billion in 2008.

Experts said the study findings highlight the need to reduce medical errors and improve quality and efficiency in American healthcare.

Check out I.I.I. information on medical malpractice.

Hospital-Acquired Infections Need Urgent Attention

A government study has found that very little progress has been made on eliminating hospital-acquired infections and the problem needs urgent attention. According to the 2009 National Healthcare Quality Report from the Agency for Healthcare Research and Quality, rates of postoperative sepsis and postoperative catheter-associated infections are increasing. The study reported that rates of bloodstream infections increased by 8 percent and urinary tract infections increased by 3.6 percent on the previous year, while rates of selected infections due to medical care increased by 1.6 percent. On a more positive note, there was no change in the number of bloodstream infections associated with central venous catheter placements, and rates of postoperative pneumonia improved by 12 percent. Check out an April 13 New York Times article for more on this. A recent study by Aon found that hospital professional liability claims are on the increase, in part due to claims arising from hospital acquired conditions, also known as “never events.† One out of every four claims and 24 percent of hospital professional liability costs are associated with hospital acquired conditions, such as infections and injuries, medication errors, objects left in surgery and pressure ulcers. Aon’s 2009 Hospital Professional Liability and Physician Benchmark Analysis also noted that the frequency of hospital professional liability claims is increasing after years of declines and is expected to continue increasing at a one percent annual rate. Check out I.I.I. information on medical malpractice.

Challenging Times for Tort Reform

In a decision that legal experts see as part of a national trend by the plaintiffs’ bar to overturn damage caps, the Illinois Supreme Court last Thursday struck down a state law capping noneconomic damages in medical malpractice cases. Similar to laws in other states, the 2005 law had capped pain-and-suffering damages in medical malpractice cases at $500,000 against doctors and $1 million against hospitals. The Wall Street Journal Law Blog notes that many state supreme courts have upheld the constitutionality of damage limits, but the issue is currently being weighed by high courts in Georgia, Kansas, and Missouri. It quotes Mark Behrens, a lawyer with Shook, Hardy & Bacon, saying that the other courts opposed to caps may cite the decision as support, but “I doubt it will change many minds.† A February 8 op-ed in the Chicago Tribune by blogger, writer and consultant Dennis Byrne observes that the Illinois Supreme Court decision sets bad public policy. Byrne says the law was effective, helping reduce medical costs and stemming the departure of Illinois health care providers because of excessively high malpractice insurance costs. A recent study by the American Tort Reform Association (ATRA) reported on the coordinated efforts of personal injury lawyers to increase litigation and repeal or chip away at existing tort reform statutes.  Evidence suggests that over the course of decades tort reform has had a beneficial impact on the U.S. economy, spurring growth. According to the Pacific Research Institute (PRI), states with a fair, predictable tort system have stronger revenue outlooks, better job growth and more favorable prospects for economic growth. Check out I.I.I. information on medical malpractice. Check out a recent I.I.I. paper on The Tort Threat.

Medical Malpractice Litigation: Tort Threat

Medical malpractice litigation and fallout from the financial crisis could fuel future growth in U.S. tort costs, according to the latest update from Towers Perrin. The warning came as Towers Perrin reported that U.S. tort costs are expected to increase by 3 percent in 2009, and a further 4 percent in 2010 and 6 percent in 2011. Looking beyond 2009 and probably 2010, Towers Perrin said medical malpractice is very susceptible to a quick change given its costs. “This area of tort costs could see a return to the growth rates seen in the mid-1970s, mid-1980s and for a brief time, earlier in this decade,† it observed. That said, despite the chaos in the financial markets in 2008, U.S. tort costs remained relatively benign, rising by $2.7 billion (1.1 percent) in 2008. This was due to several factors, including a decrease in miles driven, which kept personal auto and commercial auto costs in check. Medical malpractice costs also decreased slightly in 2008, according to Towers Perrin. Check out a recent I.I.I. paper on the Tort Threat and information on medical malpractice.