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Medical Malpractice Tort Reforms

Medical Malpractice Tort Reforms. Group A: Mirna P Amaya Louis Daniel Velasco Gail Young Jingbo Yu William Walders . Agenda. Definitions Review of Medical Malpractice and Tort Reform Historic Legislation and Policy efforts

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Medical Malpractice Tort Reforms

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  1. Medical Malpractice Tort Reforms Group A: Mirna P Amaya Louis Daniel Velasco Gail Young Jingbo Yu William Walders

  2. Agenda • Definitions • Review of Medical Malpractice and Tort Reform • Historic Legislation and Policy efforts • National, State malpractice reform • Republican & Democrat Perspective • Policy and Fiscal Implications of various approaches • Proposed Legislation • Rationale, Target Groups, Mechanism, Financing, Outcomes

  3. Basic Concepts • Medical malpractice: A physician's deviation from the applicable standard of care that a similar physician would exercise under the same circumstances. • Tort: A wrong or injury committed against a person or property. • How do they fit together?

  4. Historic Legislation & Policy efforts • 1768—Sir William Blackstone • Commentaries on the Laws of England included under mala praxis (from which we derive the modern word malpractice) • "Injuries . . . by the neglect or unskillful management of physician, surgeon, or apothecary . . . because it breaks the trust which the party had placed in his physician, and tends to the patient's destruction." Mohr, James C. American Medical Malpractice Litigation in Historical Perspective.JAMA. 2000;283:1731-1737.

  5. History: Context of Establishment • 1830s-1840s: • Marketplace professionalism • Physician: competition, few quality control • Lawyer: hustling for business of their own • Malpractice emerged as a tempting new growth area for aggressive lawyers. • Other factors • Sharp decline of religious fatalism • The nation’s first widespread efforts to improve physical fitness and its first great food reforms • Patients were no longer willing to dismiss unfavorable medical outcomes as either inevitable or normal.

  6. History: Establishment • 1850—Medical malpractice litigation was an established phenomenon. • Explosion of medical malpractice suits • 1840 -1860, the number of malpractice cases increased 950%. • Effect: • Did it drive charlatans and amateur hacks from the field? • No accepted standards • Physicians became victims of their own medical advance (orthopedic cases) • Cut deep chasm between physicians and lawyers

  7. History: continue to expand?(Two explanations) • Development in US medicine • Medical innovations: fracture, X-ray tech • Benefit to patients • Medical mistakes—source of malpractice actions • Standards: • AMA(1847): tried to bring order to the medical marketplace (education, standard, licensing) • Drove unqualified healers from the field; • Rendered physicians more vulnerable to malpractice suits • Liability insurance for physicians • Physicians not had to face the prospect of personal bankruptcy • Guaranteed the perpetuation of the existing system into the 20th century

  8. History: continue to expand? • Development in US law • Contingent fee arrangement • Plaintiffs: risked nothing in bringing charges • Lawyers : gravitated toward cases… • Ordinary juries • Gave every case a chance • The unique nature of tort pleading in the U.S. • Tort: private civil wrongs that violate understood duties or social responsibilities • Malpractice: a tort action or a contract action? • Physicians: No contract relation between physician/patient • Malpractice remained a tort: vague, flexible, easily manipulated

  9. History: tort adjustment • 1900-1940s • states began to apply the res ipsa loquitur rule • the number of actions for medical malpractice increased sharply • 1960s • legitimated a quantum leap in the amount of money awarded in tort actions • 1975-1985: The average award in malpractice actions more than tripled • Today • physicians have joined insurers and businesses in an effort to curtail tort actions and to cap or reduce tort awards

  10. Malpractice Liability Insurance • Physicians make up 7 out of 10 malpractice payments (NPDB Annual Report, 2005) • Physicians accounted for 52% of estimated medical malpractice premiums in 1999, followed by hospitals at 32 percent (source: Conning& Co. Allied health care, nursing homes and managed care organizations make up the remainder.) • Today’s medical malpractice insurance market is a mix of: • traditional insurers • provider owned • groups (physicians and hospitals) and • alternative risk transfer entities.

  11. Insurers: Losses & Expenses Paid vs. Premiums Earned Over the period from 1996 through 2001, premium earned rose 16.8% while losses and expenses rose 68.9% Source: Computed from A.M. Best data by the Insurance Information Institute

  12. Increasing malpractice tort cost • Over the period from 1990 through 2000, medical malpractice tort costs rose 140%, more than double the 60% increase in medical costs generally over the same period! • Over the period from 1975 through 2000, medical malpractice tort costs skyrocketed by 1,642% while medical costs generally rose 449%, nearly 4 times as fast! Sources: Tillinghast-Towers Perrin, US Bureau of Labor Statistics, Insurance Information Institute

  13. Why do we need tort reform? • The cost of malpractice insurance rates has been skyrocketed in the past few years. • Medical Malpractice is a contributor to overall healthcare cost inflation • Doctors refusing to take on new patients, having to quit their practices, or relocating to other states. • If this trend continues, more and more doctors will be unable to practice, and as a result, more patients will have difficulty finding proper care. • Other concerns: patient safety, quality control

  14. Tort Reform • Since 2000, the issues of medical liability insurance costs and medical malpractice lawsuits have been prominent on both state and federal legislative calendars. • Medical malpractice liability is governed by state law, but Congress has the power, under the Commerce Clause of the U.S. Constitution (Art. I, § 8, cl. 3), to regulate it. • In the 108th Congress, the House passed virtually identical bills (H.R. 5and H.R. 4280) that would have preempted state law with respect to certain aspects of medical malpractice lawsuits

  15. National malpractice reform • Key issue in 2004 Presidential election and other congressional races (due to keen lobbying) • In 2005 Proposed Federal Legislation regarding medical Malpractice • In 2006 President Bush reiterated a call for Congressional action on medical liability reform • Reform has been maintained at the State level

  16. National malpractice reform • Since 1970’s • After WWII Nixon ordered a study • Findings: increase in claims led insurers to increase premiums charges to unaffordable level or to refusals to write malpractice insurance (Luce et.al, 2994) • Every state except West Virginia passed some Reforms. • California's Medical Injury Compensation Reform Act (MICRA) enacted 1975 considered model law Source: Insurance information Institute: Insurance issues series: http://server.iii.org/yy_obj_data/binary/729103_1_0/Medmal.pdf

  17. Listing of bills for Medical malpractice 1 . Medical Malpractice Insurance Corporation Act (Introduced in House)[H.R.3865.IH]2 . Medical Malpractice and Insurance Reform Act of 2005 (Introduced in House)[H.R.3359.IH]3 . Medical Malpractice Relief Act of 2005 (Introduced in House)[H.R.2291.IH]4 . Emergency Malpractice Liability Insurance Commission (EMLIC) Act (Introduced in House)[H.R.2400.IH]5 . Comprehensive Medical Malpractice Reform Act of 2005 (Introduced in House)[H.R.2657.IH]6 . Improved Medical Malpractice Information Reporting and Competition Act of 2005 (Introduced in House)[H.R.2399.IH]7 . Comprehensive Medical Malpractice Reform Act of 2005 (Introduced in House)[H.R.3378.IH]8 . Medical Malpractice Insurance Antitrust Act of 2005 (Introduced in Senate)[S.1525.IS]9 . Freedom From Unnecessary Litigation Act of 2005 (Introduced in House)[H.R.3076.IH]13 . Informed Choice Act (Introduced in Senate)[S.755.IS]14 . National MEDiC Act (Introduced in Senate)[S.1784.IS]15 . Medical Malpractice Reform Act of 2006 (Introduced in House)[H.R.4838.IH]16 . Medicare Physician Payment Reform and Quality Improvement Act of 2006 (Introduced in House)[H.R.5866.IH]17 . National Health Insurance Act (Introduced in House)[H.R.15.IH]34 . National Insurance Act of 2006 (Introduced in Senate)[S.2509.IS]35 . National Insurance Act of 2006 (Introduced in House)[H.R.6225.IH]

  18. Against Financial problems in the medical malpractice line are caused by poor investment returns and a cyclical insurance market, rather than by rising costs. Source: Insurance information Institute: Insurance issues series: http://server.iii.org/yy_obj_data/binary/729103_1_0/Medmal.pdf Reform would dismantle state judicial authority and preempt all existing state laws governing medical malpractice lawsuits (National conference fo state legislatures, 2007) For Effects of the medical liability systems foster defensive medicine--medical practice based on fear of legal liability rather than on patients' best interests (Kessler, 2006) Medical associations claim that rapidly increasing premiums & the declining number of insurers often lead physicians to stop practicing medicine or to relocate= shortage of physicians, especially high-risk specialties eg. neurology. (McKinley, 2005) Arguments for/against Reform

  19. State Reform: 2005 • 48 state legislatures introduced over 400 bills to address medical malpractice reform • 32 states enacted over 60 bills • 2 states had Supreme Court rulings on medical liability lawsuit statutes

  20. State Reform: 2006 • 36 state legislatures considering some type of medical malpractice legislation (as of May 1) • 9 states enacted malpractice bills (as of May 1) • 13 states are carrying over or reintroducing legislation from 2005

  21. 2005 & 2006: Reform Issues • Limits to non-economic damage awards • Allocation of plaintiff attorney fees as percentage of damage awards • Expert witness standards • Inadmissibility of apology statements by healthcare practitioners

  22. State Reform: 2007 • Addressing and facing same issues as 2005 and 2006 • Greater focus in 2007 on: • More accountability for insurance companies by requiring reports from medical liability insurance providers • Proposing various state controls on premium rates • Exploring litigation alternatives

  23. California Liability Reform • Medical Injury Compensation Reform Act (MICRA) in 1975 often cited as the model for legislative reform at the state level • $250,000 cap on non-economic damages while keeping economic compensation as unlimited • Shortened time lawsuit could be brought to 3 years • Periodic payment of damages to ensure money is available to patient in future • Positive consequences • Physicians not leaving, actually coming to CA • Premiums rising much slower

  24. California Positives • 2004 study on MICRA • 30% reduction in damages paid by physicians • 15% reduction in compensation to injured patients • 60% reduction in attorney fees paid by plaintiff • Premium increases 1976-2000: • California = 167% • US average = 505% • Florida = over 2000%

  25. Consequences in Critical States • Effects on physicians: • retiring early • relocating to states with better conditions • refusing to administer high-risk medical procedures • Most affected: OB/GYN, rural family physicians, neurosurgeons, other high-risk specialties • Effects on patients: • losing access to care • safety is jeopardized • high costs

  26. Stories from Critical States • Nevada • UNLV Medical Center closed trauma center for 10 days in 2002 as a result of surgeons quitting for not being able to afford premiums increased from $40,000 to $200,000 • Dr. Cheryl Edwards closed her 10 yr. old OB/GYN practice in Las Vegas after her insurance premium jumped from $37,000 to $150,000; she now practices in west LA • Dr. Frank Jordan: "I did the math. If I were to stay in business for three years, it would cost me $1.2 million for insurance. I obviously can't afford that. I'd be bankrupt after the first year, and I'd just be working for the insurance company. What's the point?"

  27. Stories from Critical States • Pennsylvania • 44 physicians in Delaware County outside of Philly left the state or stopped practicing in 2001 because of high insurance costs • 65% of physicians in Chester County said they were considering moving their practices to another state • Frankford Hospital’s three facilities in Philly had all 12 orthopedic surgeons leave after their malpractice rates almost doubled to $106,000 in 2001

  28. Florida Malpractice Situation • Florida Dept. of Insurance reported an increase in total indemnity payments of 3074% from 1975 to 2001 • 2002 malpractice insurance premium comparisons: • Miami → $106,497 avg. for specialists and $212,994 avg. for cardio surgeons • Los Angeles → $16,148 avg. for specialists and $42,292 vg. for cardio surgeons • Between 2000 and 2002, more than 30 malpractice insurance companies left Florida, leaving fewer than 10, thus reducing competition

  29. Early Florida Malpractice Attempts • In 1986, Florida legislature passed a reform bill including a $450,000 cap on non-economic damages • In 1987, the Florida Supreme Court declared the cap unconstitutional • 2003 – rates and claim numbers at all time highs had driven all but 4 insurers out

  30. Current Florida Malpractice Legislation • Original House bill during regular session included a $250,000 cap on non- economic damages, but failed to move through Senate • Three special sessions called by Jeb Bush in summer 2003 where final bill passed • $500,000 cap on non-economic damages which could be increased to $1,000,000 • $150,000 cap on ER cases which could increase to $300,000

  31. Florida Current Legislation • Three-strikes law • Voters approve trial lawyer backed three-strikes amendment on physicians in Nov. 2004 election • Judge rules for temporary injunction of three-strikes rule late in 2004 giving lawmakers more time to decide how law would work • Gov. Jeb Bush signed final bill on three-strikes law in June 2005 • Final form: • Single incident counts as only one strike • Florida Board of Medicine has final say on what is or is not a strike • Out-of state and civil case settlements do not count as strikes

  32. Florida Current Legislation • Adverse incidents law • Voters approve trial lawyer backed adverse incidents amendment on physicians in Nov. 2004 election • Amendment was also challenged and changed • Final form signed by Gov. in June 2005 • Only records created within four years of request • Only patient can request record of pertaining incident • Hospital or physician decide which records to turn over • Patient pays cost of providing the records

  33. Florida Current Legislation • Attorney fee limitations law • 3rd amendment approved by voters in Nov. 2004 was physician backed • Signed into effect June 2005 without any changes • Limits attorney contingency fees • Patients get 70% of the first $250,000 awarded • 90% of any money awarded above $250,000

  34. Medical Malpractice statistics by U.S states • http://www.cureresearch.com/medicalmalpractice/medical_malpractice_statistics_by_us_state.htm

  35. http://www.juryverdictresearch.com/Press_Room/Press_releases/Verdict_study/verdict_study8.htmlhttp://www.juryverdictresearch.com/Press_Room/Press_releases/Verdict_study/verdict_study8.html

  36. Trends in Premiums for Physicians’ Medical Malpractice Insurance, by Type of Physician, 1993-2002. http://www.cbo.gov/showdoc.cfm?index=4968&sequence=0

  37. http://depts.washington.edu

  38. http://www.manhattan-institute.org/html/cjr_10.htm

  39. http://www.manhattan-institute.org/html/cjr_10.htm

  40. http://www.manhattan-institute.org/html/cjr_10.htm

  41. http://www.manhattan-institute.org/html/cjr_10.htm

  42. Republican Caps on attorney fees* Caps on awards Punitive Pain & Suffering Certificates of Merit Insurance Assistance Funds State Provided Tax Credits Reform* Reporting Expert Witness Standards* Patient Information* Periodic Payments Democrats Evidence admission of: Doctor’s Apologies Collateral Source Arbitration Mandatory Mediation Emergency Liability* ER (Good Samaritan) Volunteer Liability Peer Review* Loss of License after X guilty verdicts* Revision of Statue of Limitations Parties Perspectives *Used or considered by Florida

  43. Republican Trends • Limits to attorney fees • Lawyers can only collect X% • Limited to first $X thousand or some % thereof • Capping awards given to defendants • Punitive Awards • Punishment for wrongdoing • Non-economic (Compensatory) damages • Pain and Suffering • Certificates of Merit • Expert reviews case prior to claimant’s submission

  44. Republican Trends • Malpractice Insurance • Assistance funds • Insurance subsidized by state • Reporting • Required to be transparent • Expert witness standards • Define the appropriate qualifications of expert testimony

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