Healthcare Business News

The fear factor

Malpractice reforms haven't done much to end defensive medicine and the costs it adds to the system

By Andis Robeznieks
Posted: September 13, 2010 - 12:01 am ET

Fear cannot be capped apparently. Specifically, physicians' fear of being sued is costing the healthcare system more than $45 billion each year, and state- level tort reforms seem to have little impact on reducing the practice of defensive medicine.

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Harvard researchers have estimated that the nation's “medical liability system” accounted for $55.6 billion—or 2.4% of total healthcare spending in 2008—with almost $45.6 billion of that figure being spent on the practice of “defensive of medicine,” which includes ordering tests and procedures or avoiding high-risk patients in an effort to avoid being sued. A study detailing the calculation of those figures appears in this month's edition of the journal Health Affairs, one of eight articles dealing with the related topics of medical malpractice, patient safety, tort reform and defensive medicine.

The research indicates that focusing on money alone may not do enough to curb the use of defensive medicine.

“It may be that, from a physician's perspective, being sued for $50,000 is the same as $500,000,” said Emily Carrier, a senior health researcher at the Washington-based consultancy Center for Studying Health System Change and lead author of one of the studies. “Their reputation, their own self-confidence, their belief that they can help their patients and have their trust, are all threatened,” Carrier said.

Because limits on noneconomic damages can affect patients whose malpractice claims have merit as well those whose claims do not, Carrier said caps—such as those in California, Texas and more than a dozen other states—may “not be best for patients” and not provide the solution many are looking for.

“Caps don't seem to change behavior,” Carrier said. Noting that Texas limits noneconomic damages against physicians to $250,000, “You couldn't tell a consistent story that having those big caps has helped a lot,” she said.

In an online survey of more than 3,000 physicians conducted last December by Jackson Healthcare, an Alpharetta, Ga.-based staffing and hospital management company, 92% of respondents said they practiced some form of defensive medicine. Pulling out the responses from Texas, Jackson reported that 80% of Lone Star State doctors said they still practice defensive medicine with 64% reporting no change in their behavior since caps went in effect in 2003, 31% reporting a decrease in defensive medicine practices and 5% reporting an increase.

In Carrier's study, physicians were not identified by individual states, but put in three groups consisting of the states with the highest and lowest risk of malpractice and those in the middle. When asked if they practice defensive medicine and are concerned or feel pressure by the threat of a malpractice suit, the study found that there was little difference in the level of concern among physicians practicing in the high-risk states and those in the lower-risk states.

The main difference could be found among specialties, with emergency physicians and obstetrician-gynecologists scoring 82 and 77.2 on a “malpractice concerns scale,” while general pediatricians and psychiatrists scored 57.4 and 51.4 respectively.

What frightens most physicians, Carrier said, is the arbitrary nature of malpractice lawsuits and how evidence suggests that the quality of care is not a good predictor of lawsuits. In fact, she said, “Many people actually injured by negligence don't go on to sue.”

“Physicians tend to view lawsuits as random events, unpredictable and uncontrollable, because they are not viewed as related to the quality of care provided,” the report concluded. “It is likely that physicians' assessment of their risk is driven less by the true risk of malpractice claims or the cost of malpractice insurance, and more by the perceived arbitrary, unfair and adversarial aspects of the malpractice tort process—which most traditional state reforms do not address.”

Todd Smith, president of the Illinois Trial Lawyers Association, downplayed the physicians' concerns detailed in the Health Affairs study. In February, caps were thrown out in Illinois by the state Supreme Court.

Smith said doctors, lawyers, accountants, journalists and other professionals are all concerned about lawsuits that could result from their own carelessness. Capping damages, said Smith, an attorney with Chicago-based Power Rogers & Smith, “wouldn't remove concerns doctors have about—like anyone else—being asked to address the wrongs they've done to people's health.”

“Nobody likes being sued, but we should all be responsible for our carelessness and doctors are not different from anyone else,” Smith added. “The focus ought to be on preventing medical errors—and not on taking away people's rights and capping their damages once they've been injured.”

Richard Donohue, a defense attorney and a founding partner of Donohue Brown Mathewson & Smyth, said ultrasounds are being done “at the drop of a hat” and agreed with the findings of the Harvard study.

“My real world experience is consistent with what the data is showing,” Donohue said. “At the same time, I have to say that, in my 35 years of doing this in Illinois, today there are very few frivolous cases filed—and I'm on the defense side.”

On Aug. 3, the American Medical Association released results of a survey of 5,825 physicians conducted in 2007 and 2008. Findings showed that 42.2% of the respondents said they've been sued at least once and more than 20% had been sued at least twice. Of respondents age 55 and older, 60.5% said they've been sued once and 39.2% had been sued at least twice.

The federal government is backing pilot projects to test approaches that would ease the problem.

HHS, through its Agency for Healthcare Research and Quality, awarded some $25 million in grants for several patient safety and medical liability demonstration projects, with $2 million awarded to JBA/Rand to evaluate the findings from these projects and develop evidence to guide long-term solutions to current liability problems.

“There will be a very strong focus on transparency, and disclosure to patients and families about harms,” said AHRQ Director Carolyn Clancy. “There will be a very strong focus on increasing the speed in which injured patients are compensated.”

The interconnection between the twin problems of medical errors and medical liability can be hard to assess and lead to some misconceptions. “One myth might be that it's an easy problem to fix,” she said. “This is a huge opportunity to make care safer, and that's going to be a home run for everyone.”

Similar demonstrations are authorized in the Patient Protection and Affordable Care Act, but AHRQ spokeswoman Karen Migdail said funds have yet to be appropriated to pay for them.

The AMA, which has been bashed for supporting the healthcare reform law without getting any tort reform relief in return, is hoping to see tangible results. “The latest Harvard estimate of unnecessary costs generated by the nation's flawed medical liability system affirms that real money can be saved with reforms,” stated an e-mail from the AMA attributed to its president, Cecil Wilson of Florida. “The American Medical Association is committed to proven medical liability reforms that are already working in states such as California and Texas. As a result of AMA advocacy on the health reform law, for the first time the government has directed $25 million to further test promising proposals like health courts and safe harbors.”

One of the AHRQ grant award winners is Eric Thomas, a professor of medicine at the University of Texas at Houston Medical School and director of the University of Texas at Houston-Memorial Hermann Center for Healthcare Quality and Safety. With his almost $1.8 million grant, Thomas will investigate UT's disclosure and compensation program and identify and disseminate best practices for using disclosure to improve patient safety. A focus will be on involving patients or their families in the process.

Thomas acknowledges that he and a colleague were sued during their residency by the family of a young woman who died from appendicitis complications several weeks after she came into the emergency room with abdominal pain and they diagnosed her with a urinary tract infection. He said a jury found their original diagnosis to be correct and that her appendicitis condition developed independently from the problems that prompted the original emergency visit.

The Harvard study published in Health Affairs concluded that the convergence of healthcare reform and tort reform “may have unexpected synergies in bending our cost curve down,” and Thomas noted how this may be happening in Texas.

Thomas said “outstanding reimbursement reform from Washington or state Medicaid offices” may not solve malpractice problems and damage caps won't stop doctors from practicing defensive medicine, but caps have saved money and the money is being put to good use.

In the last fiscal year, the University of Texas Health Science Center at Houston took $4 million it had budgeted for malpractice payments but didn't use and spent it on quality and safety initiatives and training staff on medical error disclosure communication skills.

“The money for this is there now because of tort reform,” he said. “Because of tort reform, we're not being sued as much and not paying out as much.”



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