Medical Malpractice

Background

Preventable injuries caused by medical errors are widespread and costly. They result from flaws in the complex interactions among health care professionals, sophisticated technologies, medical products, and organizational systems. They also can arise from individual negligence, impairment, and incompetence. The 1999 IOM report To Err Is Human: Building a Safer Health System attributes most preventable medical injuries to system failures, not to an individual practitioner’s negligence or incompetence.

Preventable medical injuries may be subject to redress under medical professional liability, also known as medical malpractice. Medical malpractice is a subset of tort law that deals with professional negligence. Other areas of tort liability that may pertain to users of health and long-term services and supports (LTSS), but are distinct from medical malpractice, include product liability (e.g., for defective drugs or devices) and liability for injury resulting from neglect or abuse, such as in a nursing home or other LTSS setting.

A systems-oriented approach to preventing medical injury focuses on learning how and why errors occur and on developing and implementing systems to avoid them. Yet most discussions concerning preventable medical error and injury have so far focused on the medical malpractice system instead of on the error or injury itself. Tort liability continues to be attacked as a source of problems in America’s health care system. Although medical malpractice premiums make up less than 1 percent of total health care expenditures, the cost of the medical liability system, including defensive medicine, has been estimated at 2.4 percent of total health care spending.

The estimated number of medical injuries nationally may be as high as one million per year, but only about 85,000 malpractice suits are filed annually. Since the early 1990s the number of settlements and judgments of malpractice claims reported to the National Practitioner Data Bank (NPDB) has remained at fewer than 15,000 per year. Physician-advocacy groups say that 60 percent of liability claims against physicians are dropped, withdrawn, or dismissed without payment. Most malpractice claims that are settled (73 percent) involve medical error. Only about 3 percent of claims are not associated with injuries. According to the NPDB, just 5 percent of physicians account for 54 percent of malpractice payouts.

From a patient’s perspective, the most important purposes of the medical malpractice system are to compensate negligently injured patients and to deter unsafe health care practices that lead to injury. A variety of solutions to the current problems in the medical malpractice system have been proposed and in some cases implemented. Perhaps the most controversial is a limit or cap on nonfinancial damage awards. Because nonfinancial damages are likely to constitute a larger share of awards to older, retired, or low-income people, such caps would exclude a larger portion of their legitimate potential claims and therefore would disadvantage these groups the most. Caps of varying levels on nonfinancial damages have been imposed in more than half the states, but several have been struck down as unconstitutional or have been repealed.

To be effective in the long run, approaches to address problems in the current medical malpractice system must both reduce the number of preventable medical injuries and offer appropriate compensation for those who are injured despite improved safety efforts. One approach to do this is the patient-centered, safety-focused, nonjudicial injury compensation system described by the IOM in its 2002 report Fostering Rapid Advances in Health Care: Learning from System Demonstrations. Under this system, patients would be compensated for avoidable injuries based on a predetermined award schedule and providers would be required to report and analyze medical errors, implement programs to reduce medical injury, and involve patients in safety improvement efforts.

Another approach to malpractice reform has been to encourage providers to openly acknowledge their errors, apologize to patients, and quickly offer compensation. This approach, often referred to as “sorry works,” helps patients find answers to what went wrong in their care and how the problem has been addressed. In one example of this approach, the University of Michigan Health System adopted new policies on medical errors in 2002. Since then, the health system has cut its litigation costs in half, while the number of new claims and the time required to resolve claims have both plummeted. The “sorry works” approach has been facilitated in several states that have adopted laws that prevent a doctor’s apology or expression of remorse from being used against him or her in court.

The ACA authorized grants to states to establish demonstrations to evaluate alternatives to the current tort litigation approach to medical malpractice. HHS has allocated $25 million for three-year grants allowing states to test models that emphasize patient safety, disclosure of medical errors, and alternative dispute resolution. Patients will be allowed to opt out of these alternatives at any time.

Medical Malpractice: Policy

Malpractice reform

In this policy: FederalState

All medical providers and hospitals should be required either to carry adequate levels of medical malpractice insurance or to demonstrate an ability to pay potential malpractice claims. If malpractice exclusions or waivers are established for providers, states should not single out Medicaid beneficiaries or recipients of uncompensated care for reduced protection.

Pre-dispute mandatory arbitration should be unenforceable (for related policy, see Chapter 8, Long-Term Services and Supports—Quality and Consumer Rights Across Settings and Chapter 12, Personal and Legal Rights—Private Enforcement of Legal Rights).

States should initiate demonstration projects to explore and evaluate promising methods of patient compensation, such as mediation and “accelerated-compensation events” systems. In so doing states should be careful to avoid restricting patient access to fair and just compensation.

Statutes of limitation should be no shorter than two years and should not begin until the injury is discovered or should reasonably have been discovered.

Insurance mechanisms that make liability insurance coverage available should be supported. States should require that malpractice insurance premium increases are approved by state regulators and that proposed rates are justified by claims-loss ratios. States should also require that insurance companies report filed claims to the state insurance commissioner on an annual basis. Insurance regulators should identify and collect additional, mutually beneficial data necessary to further the understanding of conditions in current and future medical malpractice markets.

AARP believes that any efforts to address medical malpractice concerns should begin with a patient-centered focus on reducing errors and promoting fair compensation. AARP does not support malpractice reform proposals that do not reduce errors or that would impair the right of injured patients to full and just compensation for injuries resulting from inappropriate medical care.

AARP endorses the IOM’s recommendations for exploring alternatives to the tort system, and specifically supports:

  • reforms that would promote access to the courts for all legitimate claims, including smaller malpractice claims, and accelerate the resolution of cases;
  • further exploration of alternative dispute resolution systems for medical malpractice cases that could serve injured patients better than the current system does, such as “sorry works” approaches;
  • the development and evaluation of demonstration projects for other promising systems of compensation for preventable medical injuries, such as the comprehensive, patient-centered, safety-focused, nonjudicial injury compensation system proposed by the institute—such projects should be conducted under government auspices, with strong oversight, adequate funding and staffing, and rigorous evaluation, and should apply schedules of damages that do not result in disproportionately low or otherwise unfair awards to older, nonworking patients; and
  • malpractice insurance rates that fairly and accurately reflect claims experience.