If America put men on the moon in 1969, it would seem relatively simple to come up with a rational way by 1996 to reduce incidents of medical malpractice, eliminate defensive medicine, punish providers for their errors and fairly compensate victims.
But based on a review of more than a dozen reports on medical malpractice, we clearly have a better chance of landing a man, a woman, their children and the family dog on Mars than solving the medical malpractice issue.
In other words, the jury is still out on whether tort reforms have significantly reduced healthcare costs or actually increased malpractice incidents.
On one hand, reforms such as damage caps weed out frivolous lawsuits, cut down on wasteful defensive medicine and hold down the rising cost of insurance premiums, said Gaelynn McGavick, Washington counsel for the American Hospital Association.
On the other hand, tort reforms can increase malpractice by preventing some plaintiffs from reaching the judicial system and removing incentives for providers to improve quality by reducing the financial penalties for nonperformance, the American Trial Lawyers Association argues.
Following is a sample of sometimes illuminating, sometimes conflicting reports conducted in recent years by insurance companies, government agencies, private research groups and universities.
Hospitals and physicians. A 1995 Harvard University study found that patients are more likely to suffer from an error in treatment as a result of faulty hospital procedures than because of the performance of physicians, nurses or pharmacists.
The study, published in the July 5, 1995, issue of the Journal of the American Medical Association, suggests hospitals need to devote more resources to reduce errors.
While negligence in hospitals involves only about 1% of all patient admissions, only one in eight of those injured by medical malpractice ever files claims, and only one in 16 claims results in damage awards, according to a 1993 report by the Harvard Medical Practice Study Group.
Hospitals nationally lost 45% of malpractice cases in 1994, while physicians lost 35% of their cases. That's an improvement for both groups compared with 1988, according to Jury Verdict Research, a Horsham, Pa.-based legal research company. In 1988, hospitals lost 60% of their cases and physicians lost 39% of theirs. About 90% of all medical malpractice cases are settled before trial, the AMA said.
The median medical malpractice award against hospitals for brain damage-the most common injury in medical malpractice cases-was $3.5 million for hospitals and $2.3 million for physicians, Jury Verdict said.
However, the median medical award against hospitals for wrongful death was $470,320, compared with $579,000 for physicians, Jury Verdict said.
Overall, average medical malpractice awards declined in 1994 to $1.04 million from $2 million in 1993, according to Jury Verdict. And average claims against hospitals and physicians are similar in frequency and size to product liability lawsuits against industry, which is the most common tort case.
A May 1985 editorial in the New England Journal of Medicine estimated that 5% of the nation's physicians "ought not to be practicing medicine." In 1985, there were 552,716 physicians, according to the AMA, and less than 0.5% were disciplined.
Less than 1% of physicians were disciplined in 1995, according to the National Practitioner Data Bank. However, from 1991 to 1995 there was a 58% increase in disciplinary actions against physicians, based on data bank information. In 1995, 3,963 physicians, or 0.57%, had their licenses suspended or revoked. There were 684,414 physicians in 1995, the AMA said.
Meanwhile, a small percentage of physicians are responsible for the bulk of malpractice payments each year, according to Public Citizen Research Group, an organization founded by Ralph Nader.
For example, 3% of all physicians in Florida accounted for 45% of the money paid in malpractice claims in that state. And 7.5% of the doctors in Texas accounted for 65% of the malpractice claims filed in Texas, Public Citizen said.
The AMA said claims against physicians have declined to 8.2 per 100 physicians in 1992 from 10.2 in 1985. However, in 1993, the last year for which data is available, the AMA said claims against doctors increased to 9.8 per 100.
Defensive medicine. A 1993 study conducted by the Lewin Group, a Fairfax, Va.-based consulting firm, estimated spending on defensive medicine-the practice of overusing diagnostic tests and other medical procedures to guard against the potential for malpractice litigation-by physicians and hospitals reached $33.5 billion in 1996. That figure includes $7.8 billion spent on hospital services, a figure that has steadily increased from $6.1 billion in 1991. By 1998, hospitals' defensive medicine costs are projected to total $8.6 billion with total spending reaching $37.7 billion.
Lewin estimated a 25% reduction in defensive medicine costs if physicians could use practice guidelines as an immunity in malpractice cases, 60% savings if tort reform were coupled with immunity defenses, and 85% savings under a no-fault system with a medical review board adjudicating claims.
The Lewin study was conducted for MMI Cos., a Deerfield, Ill.-based risk-management and malpractice insurer that covers 600 hospitals.
A 1994 study by the U.S. Office of Technology Assessment said defensive medicine costs "are impossible to accurately measure," and the effects of tort reform to reduce that amount "are likely to be small."
The OTA concluded that less than 8% of all diagnostic procedures are "likely to be caused primarily by a conscious concern about malpractice liability risk."
The AMA estimates eight of 10 physicians practice defensive medicine. But the Insurance Information Institute said 65% of physicians in Indiana-a state with a wide range of medical malpractice tort reforms-continue to practice defensive medicine.
The most recent study on defensive medicine was conducted in 1995 by two Stanford University professors. They concluded that damage caps and other tort reforms that "directly reduce provider liability pressure lead to reductions of 5% to 9% in medical expenditures without substantial effects on mortality or medical complications."
The Stanford researchers evaluated treatment of Medicare patients with heart disease in 1984, 1987 and 1990. No specific dollar savings were estimated. The health expense reductions would take place three to five years after tort reform provisions were put into effect, said researchers Daniel Kessler and Mark McClellan.
Tort reform. Despite a $1 million cap on malpractice damages in Virginia, a patient won a $5 million verdict in 1992 after defense attorneys successfully argued the hospital violated the 1986 federal patient "dumping" law. Defense attorneys warn that caps can be skirted by crafty plaintiff lawyers.
Average physician medical liability premiums in California increased 7.9% since 1986 compared with an 11.1% increase nationally, the AMA said. In 1976, California enacted the Medical Injury Compensation Act, which is considered a model tort system. No data was available on hospital premiums.
On the other hand, California ranks third in the nation in average damages paid in 1994, according to Jury Verdict. California's average payment was $1.6 million, compared with $909,000 in Florida. Both states have damage caps.
Healthcare costs continue to rise in states with damage caps, such as California and Indiana, according to Citizen Action. Malpractice premiums dropped in several states that repealed caps, such as Minnesota.
Despite approval of a damage cap and other tort reforms in 1985, New York continues to have the nation's highest average damage award, $2.5 million per claim, Jury Verdict said. Over the past 10 years, malpractice premiums have continued to rise, increasing 8% in 1994 and 2% in 1995, according to the New York State Insurance Department.
The Congressional Budget Office in 1993 concluded that limiting the rights of malpractice victims will not reduce healthcare costs. The CBO estimated costs associated with malpractice, including premiums, legal fees and payments to injured patients, amount to only 1% of the nation's $1 trillion healthcare tab.