Immunity for Doctors Yes. But Liability for Guidelines Promulgators.

1. Immunity for Doctors? Yes. But Liability for Guidelines Promulgators. Ronen Avraham University of Texas At Austin

2. Problems in the Healthcare system and Past Legal Solutions: Medical Errors: Malpractice Liability (stick not a carrot) Defensive Medicine: Tort Reform (caps) Offensive Medicine: Payment Reform (capitation, P4P) This type of “capitation” system, where physicians are paid based on the health outcomes of a patient with a given disorder, has been implemented in several areas. The largest trial has been in Medicare and Medicaid, where this system of capitation was recently mandated for both services in 2005. One problem with capitation is that disorders can overlap, making a given patient more expensive to treat than the average patient on which the payment rate is based. This type of “capitation” system, where physicians are paid based on the health outcomes of a patient with a given disorder, has been implemented in several areas. The largest trial has been in Medicare and Medicaid, where this system of capitation was recently mandated for both services in 2005. One problem with capitation is that disorders can overlap, making a given patient more expensive to treat than the average patient on which the payment rate is based.

3. Problems with Past Solutions: 1) Solutions do not achieve their intended goals. No recent evidence that medical liability reduces medical errors. Mix evidence whether tort reform reduces defensive medicine. No evidence that new payment schemes save much offensive medicine costs. Reasons why medical liability is not helpful: Focus on compensating patients instead of on patient safety. Lack of expertise to deal with Complex Environment. Lack of expertise to deal with probabilistic negligence and probabilistic causation Judging in hindsight Accidents are usually a consequence of systemic errors, (usually outside of the resolution courts can deal with). Reasons why medical liability is not helpful: Focus on compensating patients instead of on patient safety. Lack of expertise to deal with Complex Environment. Lack of expertise to deal with probabilistic negligence and probabilistic causation Judging in hindsight Accidents are usually a consequence of systemic errors, (usually outside of the resolution courts can deal with).

4. Problems with Past Solutions (cont’d): 2) Fixing one problem might exacerbate the other:

5. Is there a solution which is effective & can tackle all 3 costs drivers simultaneously ? Insight: If doctors perform Evidence-Based-Medicine (EBM), all three problems will be simultaneously handled:

6. Has anyone thought about it?  Senator Baucus (U.S. Committee on Finance ) has been facilitating discussions regarding the notion of a malpractice liability safe harbor for doctors who follow guidelines. Senator Ron Wyden had proposed legislation which would have created a rebuttable presumption that care was not negligent if the physician followed accepted clinical practice guidelines. Dr. James Rohack, the president of the American Medical Association, supports that. President Obama recently (Feb 2011) indicated his potential willingness to endorse this concept as part of his drive to overhaul the medical malpractice system (which includes health courts).

7. So what is wrong? not all panel members have to be free of conflict of interests, The IOM report, perhaps more than anything else, reflects the dissatisfaction of people in the field with the current state of clinical practice guidelines.not all panel members have to be free of conflict of interests, The IOM report, perhaps more than anything else, reflects the dissatisfaction of people in the field with the current state of clinical practice guidelines.

9. To sum up… The common law has always been a stick. Its marginal contributions to patient safety are diminishing. The government has not done much. CPGs are a good idea but entities that promulgate guidelines have no funding and do it under the wrong incentives. When all else fails, let’s try the market…

10. Imagine a world with Private Regulation

11. A world with Private Regulation- Causes of Action

12. Private Regulation- The Legal Infrastructure (Or, what can YOU do?)

13. Private Regulation- The Legal Infrastructure (Or, what can YOU do?) You have done it with gatekeepers, accountant firms, law firms, seal of approval, etc. You have done it with gatekeepers, accountant firms, law firms, seal of approval, etc.

14. Private Regulation- The Legal Infrastructure (Or, what can YOU do?)

15. Advantages of PR Medical procedures are developed by: experts repeated players, who keep up with literature, financially accountable, based on relevant information Liability is determined: From the ex-ante perspective No hindsight bias No identifiable other effect Takes into account costs and benefits. As a Result: Costs of errors, of defensive medicine and of offensive medicine are significantly reduced.

16. Think about it this way:

19. The End

20. If such a great idea...Why don’t we see it? We do see private firms promulgate guidelines. We even see them compete. UptoDate®, FirstConsult®, Dynamed®, and eMedicine® have all transformed guidelines written by various entities from a technical document into an accessible one.

21. The real question is:Why don’t we PR assume liability? Transactions costs: Contractually switching from the current liability regime to PRR is costly. How can parties agree on liability from the ex-ante perspective? Externalities: PRR eliminates an externality which harms patients (Arlen). the joint liability of doctors and MCOs under the current regime is smaller than under PRR where the joint liability is not capped. The joint liability is capped because plaintiffs’ lawyers tend to only go after doctors’ liability insurance coverage and not after their personal assets (some of which are protected under bankruptcy laws or otherwise hidden), doctors’ liability is effectively capped at their policy limit. The joint liability is capped because plaintiffs’ lawyers tend to only go after doctors’ liability insurance coverage and not after their personal assets (some of which are protected under bankruptcy laws or otherwise hidden), doctors’ liability is effectively capped at their policy limit.

22. Past Literature on the Impact of Liability Defensive Medicine 93% of Penn doctors reported practicing it (Studdert et al, 2005) Several studies found correlation between high liability risk and increased C-section rates. Mixed results for AMI patients. (Only 2 studies). Offensive Medicine Caps increase C-sections & rate of complications (Currie & McLeod, 2007). Interventional cardiologists are more likely to redirect patients, who would otherwise receive medical treatment or CABG, to PTCA (Afendulis & Kessler, 2007) Ronen: I’d mention the Gruber and Currie study that women with private insurance get c-sections even though lower risk group.Ronen: I’d mention the Gruber and Currie study that women with private insurance get c-sections even though lower risk group.

23. The health care system is sick. Any Healthcare Reform must tackle the system’s three cost-drivers: Medical Errors

24. Medical Errors The conventional wisdom is that up to 100,000 people die every year as a result of medical malpractice.

25. Defensive Medicine Patients get more intense treatments in order to shield doctor from risk of malpractice litigation.

26. Offensive Medicine

27. What is “offensive medicine” or “induced demand” ? Psychiatric Institutes of America (TX) Hired doctors that would “admit” patient with insurance. “Put heads on beds at any costs.” “Fill the beds at any cost. Hire sleazeballs.” 1993 FBI investigation. $379M in fines and settlements. Some docs went to jail. Redding Medical Center (CA) (''little house of horrors'' ) Performed 1000 bypasses a year (3 times the normal rate for its size). 2002 FBI investigation claimed up to 50% were not medically justified. $500M settlement with government and patients. Offensive medicine or “induced demand”- Patients get more intense treatments in order to increase doctor’s fees Offensive medicine or “induced demand”- Patients get more intense treatments in order to increase doctor’s fees

28. A world with Private Regulation-  The Legal Infrastructure

29. A world with Private Regulation- The Legal Infrastructure

30. A world with Private Regulation-  The Legal Infrastructure