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The Effects of Medical Malpractice Review Panels on Malpractice Awards

The Effects of Medical Malpractice Review Panels on Malpractice Awards. Karen Gutermuth, Ph.D. Virginia Military Institute. 2008 VAE Conference. States in Liability Crisis . U.S. DHHS 21 States Identified by the AMA

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The Effects of Medical Malpractice Review Panels on Malpractice Awards

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  1. The Effects of Medical Malpractice Review Panels on Malpractice Awards Karen Gutermuth, Ph.D. Virginia Military Institute 2008 VAE Conference

  2. States in Liability Crisis • U.S. DHHS • 21 States Identified by the AMA • Crisis states are those where “medical liability insurance rates force physicians to retire early, eliminate high-risk procedures or leave the state.”* • 3 of the 21 crisis states have established MMRPs. * Source: American Medical News available at http://www.ama-assn.org/amednews/2007/03/05/prca0305.htm 2008 VAE Conference

  3. 3 Periods of Crisis • 1970s: Private Insurers Leave the Market • Availability and Affordability Crisis • 1980s: Increased Claim Frequency & Severity • Affordability Crisis • Shortage of High-Risk Specialists • 2000s: Lack of Affordable Liability Coverage • Loss of Physicians • Reduced Emergency Departments 2008 VAE Conference

  4. Previous Research • Shmanke and Stevens (1986) • Effects of MMRPs on number of claims, and defendant’s costs in AZ • Yoon (2004) • MMRPs reduce damage awards in NV • O’Neill and Henesy (2005) • Tort reform effects on defensive medicine • MMRPs reduce hospital expenditures 2008 VAE Conference

  5. Liability Tort Reforms • Goals of Reform • Screen out frivolous suits. • Define standards of care and consent. • Reduce awards/Eliminate “mega-awards”. 2008 VAE Conference

  6. Types of Reform • Caps on Awards • Economic Damages • Noneconomic Damages • Punitive Damages • Caps on Attorneys’ Fees • Various forms • Sliding scales • Not to exceed a stated percentage • Could be determined by the court/judge 2008 VAE Conference

  7. Types of Reform • Patient Compensation Funds • State-sponsored liability insurance • Medical Malpractice Review Panels • 19 states with MMRPs • Prelitigation Panels • Identify frivolous suits & Encourage early resolution of claims 2008 VAE Conference

  8. MMRPs • Composition of Panel • 1-3 physicians, 1-2 attorneys, a judge • Costs of Convening a Panel • DE: “Losing” party pays • IN and NM: PCF pays • MA and UT: State pays • MT: Individual health care provider pays • Ruling is nonbinding 2008 VAE Conference

  9. Are MMRPs Effective? 2008 VAE Conference

  10. Model and Data • Panel data 1991 through 2004 (annual) • Fixed Effect Model Total Annual Awards = f(Physician Population, Per Cap Income, Damage Cap, Attorney Cap, PCF, MMRP) 2008 VAE Conference

  11. 2008 VAE Conference

  12. Conclusions • MMRPs are NOT effective. • Damage Caps ARE effective. • Patient Compensation Funds??? Reform must be Binding and Unavoidable! 2008 VAE Conference

  13. Fixed Effects Model = difference from the mean 2008 VAE Conference

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