Pushing ahead with malpractice reform - with or without Congress

Philip K. Howard, founder and chairman of Common Good, writes about establishing special health courts as a way to reform the medical liability system.

 

Health care reform gives the sense of a ship tossed about in stormy seas, with political decisions to steer here or there in reaction to the uncertain winds of public opinion and a gale of special interests.  The fact of a partisan mutiny makes the destination very uncertain.  Will reform capsize altogether, will it wash us onto the shoals of unaffordability, or will it lead us towards a new social contract?  

 

The area in which I’ve been most involved is trying to improve our system of medical justice.  The basic goal is to create a reliable system of justice that will provide the transparency and openness needed to improve patient safety, the trust in justice needed to reduce defensive medicine, and a reduction in adversarial process needed for quick and fair compensation for injured patients. 

 

It’s hard to find anyone in health care who doesn’t support some version of this change—patient safety experts, consumer groups, providers, as well as editorial boards and the public at large, all overwhelmingly support trying to create a reliable foundation of justice.  (See here, here, and here.) 

 

Yet even our efforts to authorize pilot projects for special health courts—seemingly the easiest and

most impactful of all reforms—are buffeted by all of these forces.  The health courts project, led by Common Good and the Harvard School of Public Health,  with funding from the Pioneer Portfolio at the Robert Wood Johnson Foundation, is a win-win for all constituents.  But it has a powerful opponent in America’s trial lawyers, who prefer the status quo.  And they happen to be very well organized politically and major contributors on Capitol Hill.

 

The House devotes only a few pages of its 1990-page health reform bill to liability reform, encouraging “early offer” programs, which are designed to induce quick settlements by limiting attorneys’ fees, But the same provision then forbids any limitation on attorneys’ fees.  It’s hard to characterize a proposal like this—it’s not a Trojan horse, because the deception is transparent.  Maybe a Trojan stick pony.

 

The Senate bill contains a general “sense of the Senate” that “Congress should consider establishing a State demonstration program to evaluate alternatives to the existing civil litigation system with respect to the resolution of medical malpractice claims.”  In effect, this is a placeholder for some deal to be worked out on the floor. 

 

What are the chances of a constructive liability reform by Congress?  Former Sen. Bill Bradley has suggested that special health courts are a perfect inducement for Republican support for health care reform.  But Republicans seem broadly in the mode of “Just Say No,” perhaps hopeful that the reforms will pass and be so unaffordable that the electorate will desert the Democrats.  Democrats could pre-empt this strategy by including health courts and other mechanisms for containing costs. 

 

The good news is that, whatever happens in Congress with health courts, the Obama Administration has signaled that it wants to fund pilot projects for liability innovations.  A broad cross-section of health care experts and providers came together this past week, under the auspices of Common Good and with support from the Robert Wood Johnson Foundation, to discuss how to organize and implement pilot projects for reliable justice in healthcare.  (You can access a webcast of the forum, “Fulfilling the Promise,” here.)

 

The support for change was overwhelming.  As Marty Hatlie, President of the Partnership for Patient Safety, put it: the question is not whether healthcare justice will change, but when.  A reliable foundation of justice is an essential part of the broader effort to improve the delivery of health care,  including as a foundation for containing costs.

Comments

[Michael Reeh, MD, FAASFP, FAAGM]

Tort Reform in America
Introduction: How we got here
Tort reform has become a larger issue over the last several years because juries have awarded outrageously high damages against physicians; this has increased the costs of medical professional liability insurance which increases the cost of overhead expenses an ultimately the cost of health care. Physicians have had to spend thousands of dollars to defend against frivolous lawsuits. Unfortunately there has been substantial amount of money made by trial lawyers who have been seeking to cash in on the “jackpot”. In malpractice cases lawyers receive a percentage of the total, and this causes plaintiffs to over inflate economic damages and seek non-economic damages to recover for the 33% to 40% that the lawyer receives if the suit is successful.
The U.S. Congress Joint Economic Committee Study Improving the American Legal System: The Economic Benefits of Tort Reform mention a 1985 reform bill by Moore – Gephardt “…The premise of the contingency fee and Moore-Gephardt reforms is that it is costly, indefensibly wrong, and perhaps even unethical, for lawyers to enjoy unearned, windfall profits by virtue of their monopoly control of access to the tort system…” In the bill if a defendant agrees to pay all economic damages defined by state law within 60 days, the case would be settled. Lawyer fees would be capped and be on an hourly basis rather than contingency and added to the economic damages. If a plaintiff decides not to accept full payment of all economic damages an decides to bring a case to court in an attempt to obtain non-economic damages, the plaintiff would then need to prove by clear and convincing evidence wanton or intentional defendant misconduct to receive non-economic damages. These changes in the legal system were never enacted. (Miller, Dan, 1996). States have enacted the majority of tort reforms mostly caps on non economic damages.
Federal Tort Reforms:
Torts are usually state issues. Congress has been advised for many years that tort reform could only succeed if laws were made concerning interstate commerce. There would be constitutional issues if there were attempts to change tort law at a federal level. The House of Representatives passed tort reform legislation, but the Senate did not pass the bill. There are continuing steps to try and pass legislation at the federal level. State governments have voiced opposition to any laws that would interfere with states rights to manage their own procedures.
From the National Conference of State Legislators website:
“…NCSL opposes federal efforts to preempt existing state laws or state constitutional provisions in the area of medical malpractice lawsuits, specifically federal legislation that would preempt state laws and/or constitutions in the following manner:
• Preempt state laws governing the applicable statute of limitations in such cases;
• Preempt state laws governing the awarding of damages by mandating a mandatory uniform amount of damages of any kind (compensatory, noneconomic or punitive) at the federal level;
• Preempting state laws governing the drafting of pleadings and introduction of evidence in such cases; and
• Preempting state laws and/or constitutions governing the awarding of attorney's fees.
August 2009…” (National Conference of State Legislators, 2009).
It is doubtful that there will be anything at the federal level in the near future that will address tort reform due to strong opposition from the trial lawyers and state governments. There has been work to change the lawyers’ fees away from a contingency basis:
“…Contingency fee is the traditional mechanism used to compensate attorneys in tort cases. Under a contingency fee arrangement, the lawyer receives a share of the damage award as payment. Typically, the lawyer's share is 33 to 40 percent of the damage award.
The problem with the contingency fee system is that in many instances, the fee paid to the lawyer is way out of proportion to the risk and effort put in on the case…’
‘…The reform, which allows contingency fee billing only when lawyers add value to settlements…” (U.S. Congress Joint Economic Committee, 1996).
Kansas and Tort Reforms:
The Kansas Medical Society has played the major role in all areas of interest to Kansas physicians, including tort reform. Kansas Medical Society formed KaMMCO, Kansas Medical Mutual Insurance Company in 1989 as a service to physicians, hospitals, nurses, and other health professionals to provide the lowest rates available in Kansas. These two organizations both work to improve medical practice in Kansas through advocacy and education. From the KMS website:
“The Kansas Medical Society is a member-service organization dedicated to improving the environment in which Kansas physicians practice medicine, and to protecting the health of Kansas’ citizens. As the only statewide association advocating for physicians in every specialty, KMS works hard to provide physicians a respected, effective voice at the Statehouse on issues such as:
• assuring the practice of medicine remains in physician hands
• protecting Kansas’ tort reforms
• improving Medicaid reimbursement
• protecting the physician/patient relationship from inappropriate third-party influence…” (Kansas Medical Society, 2009).
Kansas currently has a cap of $250,000 on non-economic damages. This is under threat all of the time. There are new bills introduced that KMS gives an analysis and opinion to the legislature. For example, there is a house bill to repeal the $250,000 wrongful death cap introduced in February of this year, and it has been opposed by KMS. There has also been a Senate bill that allows for the expression “I m sorry” without that being considered an admission of guilt. KMS supports the bill; the Kansans for Justice, previously known as Kansas Trial Lawyers Association, oppose it.
Conclusions:
There should be continuing public education and marketing to show the effect of the current tort system on the economic condition of this country. Trial lawyers have been lying to people to support the continuation of a broken tort legal system. In states that do not have tort reform, there are many examples of successful legislative solutions to this crisis.

References
Kansas Medical Society. (2009). Website. http://www.kmsonline.org/index.cfm
National Conference of State Legislators. (2009). Medical Malpractice Tort Reform. Website http://www.ncsl.org/statefed/LAWANDJ.HTM#MedicalMalpractice
United States Congress Joint Economic Committee. (1996). Improving the American legal system: The economic benefits of tort reform. Miller, Dan & Englehart, Joesph L. http://www.house.gov/jec/tort/tort/tort.htm