Why Are Medical Malpractice Rates Falling?

Posted on | November 1, 2014 | 3 Comments

Mike Magee

The finding is in. Malpractice awards against physicians are falling dramatically. The only two questions are “Why?” and “What does this have to do with quality health care, if anything?”

First the numbers. The JAMA study this week found:

1. Physicians paid claims decreased from 18.6 to 9.9 paid claims per 1,000 physicians between 2002 and 2013.

2. That translates into an annual decrease of 6.3 percent for MD’s and a 5.3 percent decrease forDO’s.

3. From 2007 to 2013, median payment’s have declined to $195,000 from $218,400 or average annual decreases of 1.1 percent per year.

During the years of the Obama Presidency we have seen significant changes in physician human resources including major shifts toward organizational employment vs. private practice, increased use of team approaches to care delivery, expanded use of “intensivists” and in-house Nurse Practitioners and Physicians Assistants, widespread expansion of EMR’s, and continued focus on Quality Improvement, including financial incentive systems tied to performance.

Is that what’s going on here, and what will the future hold? Study authors share there predictions.
1. Fights Over Status-Quo Will Continue and Be Non-Productive: “Debates and disagreement about traditional tort reforms, especially damages caps, will continue in the courts, in legislatures, and on ballot initiatives… They sap political energy and divert attention from alternatives…”
2. Communication/Resolution Programs Will Grow: “AHRQ is planning to support a nationwide scale-up of the communication-and-resolution approach. To that end, the agency recently awarded a contract for the development of a communication-and-resolution program implementation toolkit and training modules.”
3. Private Settlements: “There will be greater emphasis on laws that facilitate rapid private resolutions of medical injury disputes. Presuit notification, apology, and state-facilitated mediation laws can be adopted without vitiating traditional remedies to patients, and may encourage rapid dispute resolution.”
4. Creation of Safe Harbors: “The potential for safe harbors to improve safety and reduce cost through greater standardization of care will likely also keep them in the mix of attractive policy options. In February 2014, safe harbor legislation was introduced in Congress as part of the Saving Lives, Saving Costs Act.”
5. Physician Employment + ACO’s = Better Claim Resolution: “Tighter relationships between physicians and organizations enhance organizations’ ability to affect physicians’ behavior in ways that promote safety, transparency, and early resolution of injuries. These relationships also make it sensible to unify liability insurance under a single policy offered through the organization…”
6. Watch Out For Cycles: “…the lack of volatility in liability insurance costs may not last; it is reasonable to expect another increase in insurance premiums within the next few years.”

Now to the second question – “What does this have to do with quality of care?” Well. to begin with, there’s been pretty good evidence for awhile that even though medical malpractice law was intended to address poor quality by compensating patients for injuries resulting from negligence, and making future malpractice occurrences less likely, it has never really delivered.

In theory, this law made sense. Courts provide oversight when professional oversight breaks down. Doctors and hospitals are insured and therefore assured that a claim will not lead to financial ruin. Patients show restraint. And lawyers pursue only claims that have merit. But in practice, reality does not come close to this theory.

Three well-known scholars noted in 2004, the medical malpractice system “has internal logic but falls far short of its social goals of promoting safer medicine and compensating wrongfully injured patients.”1

The biggest problem? The medical malpractice system is fundamentally adversarial and built on a culture of blame. Doctors, hospitals, insurers, and lawyers have until recently been locked in battle with each other. Patients were routinely caught in their crossfire.

As a result, the status-quo didn’t bring relief to those who deserved it. A famous study conducted in 1984, at Harvard, examined 30,000 medical records and 3,500 malpractice claims. Only two percent of the patients who had suffered from negligence filed claims. Only seventeen percent of the claims that were submitted were in any way tied to negligence.(1,3)

The second big problem was that the tort system used litigation as its lever for change, while the safety movement uses quality improvement analysis. Tort law focuses on the individual. Safety focuses on the process. The tort system’s punitive style drives information down, encouraging secrecy. The safety movement requires a collaborative approach. This encourages openness, transparency, and continuous improvement. With tort law, exposing oneself can end one’s career and harm one’s mental health. In the safety movement, contributing is career-enhancing and therapeutic.(2)

So one should not be surprised that malpractice numbers are declining. As we move to a more organized approach to care delivery – based on expanded insurance, rationale teamwork, constantly improving processes, more home-based vs. hospital-based care, greater patient and family education/empowerment, and employed vs. independent physicians – we will continue to see these numbers improve.

That is what we should expect to happen. Why? Because the weaknesses in our health delivery system were never really based on fears of malpractice – that was a cop out. They were structural. And we’re finally doing what we should have done all along.

For Health Commentary, I’m Mike Magee

References:
1.Studdert DM, Mello MM, Brennan TA. Medical malpractice. NEJM. 2004; 350: 283-292.
2.Leape LL, et al. Promoting patient safety by preventing medical error. JAMA. 1998; 280:1444-1447.
3.Robinson GO. The malpractice crisis of the 1970’s: a retrospective. Law Contempt. Probl 1986; 49:5-35.

Comments

3 Responses to “Why Are Medical Malpractice Rates Falling?”

Don M.
December 21st, 2014 @ 10:12 am

I agree with OP, Transparency in this day and age is imperitive
Multispeciality hospital in kondapur
January 6th, 2015 @ 6:26 am

good post nice content well done
Mike Magee
January 12th, 2015 @ 8:33 am

Thank you!