Defensive Medicine and the Role of Tort Reform

by Holly Hayes

Modern Physician recently reported about a study by Harvard researchers that says the nation’s “medical liability system” accounted for approximately “$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.” Purchase the full article here.

The study indicates that states including Texas, California and more than a dozen others who have placed limits on noneconomic damages may “not be best for patients” and may not provide the solution to curbing defensive medicine.

“Caps don’t seem to change behavior,” says Emily Carrier one of the lead authors of the study. She notes Texas limits noneconomic damages against physicians to $250,000.

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.

What frightens most physicians, Carrier says, 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 says, “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.”

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 $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,” AHRQ Director Carolyn Clancy says. “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 says. “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 says 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,” states 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 says that 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 notes how this may be happening in Texas.

Thomas says “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 says. “Because of tort reform, we’re not being sued as much and not paying out as much.”

Let us hear your thoughts about defensive medicine and tort reform.

Holly Hayes is a mediator at Karl Bayer, Dispute Resolution Expert where she focuses on mediation of health care disputes. Holly holds a B.A. from Southern Methodist University and a Masters in Health Administration from Duke University. She can be reached at holly@karlbayer.com.