Is Medical Liability Reform Good for the Patient?

Healthcare reform is seemingly one of the hottest topics of discussion in the United States today.  This incredibly complex and confusing issue is full of various multifaceted components that affect nearly everyone.  One component that must be considered is whether or not medical liability reform is good for the patient.  In the end, it is all about the patient anyway, isn't it?

Health policy comprises three major priorities: reducing costs, improving quality, and expanding access.  The medical malpractice tort system is one of the largest factors influencing reform.  Addressing the issues of current medical malpractice tort system, and medical liability in general, can significantly influence the current health care system.

Medical malpractice is an act or omission by a health care provider which deviates from accepted standards of practice in the medical community and which causes injury to the patient. Simply put, medical malpractice is professional negligence (by a healthcare provider) that causes an injury or harm to the patient.  A plaintiff must establish all four elements of the tort of negligence for a successful medical malpractice claim. [1]

1. A duty was owed - a legal duty exists whenever a hospital or health care provider undertakes care or treatment of a patient.
2. A duty was breached - the provider failed to conform to the relevant standard of care. The standard of care is proved by expert testimony or by obvious errors.
3. The breach caused an injury - The breach of duty was a proximate cause of the injury.
4. Damages - Without damages (losses which may be pecuniary or emotional), there is no basis for a claim, regardless of whether the medical provider was negligent.

The plaintiff's damages may include compensatory and punitive damages. Compensatory damages are both economic and non-economic. Economic damages include financial losses such as lost wages (sometimes called lost earning capacity), medical expenses and life care expenses. These damages may be assessed for past and future losses. Non-economic damages are assessed for the injury itself: physical and psychological harm, such as loss of vision, loss of a limb or organ, the reduced enjoyment of life due to a disability or loss of a loved one, severe pain and emotional distress. Punitive damages are only awarded in the event of wanton and reckless conduct.

In 1999, the Institute of Medicine reported that there were between 44,000 and 98,000 medical error injuries per year.[2]  Recently, the Institute for Healthcare Improvement reported that an astounding 40,000 "incidents of harm" happen to patients every day in American hospitals.[3]  The 1.5 million medication errors that occur every year add $3.5 billion in medical costs to the medical system, and between $17 billion and $29 billion per year in total costs to society, including medical expenses, lost income, lost household productivity, and physical disability.[4]  This is too costly to the economy, to Americans' health and well-being, and to the public's confidence in our health care system. 

Proponents of tort reform widely hold that as medical malpractice premiums rise, the operating costs for physicians increase.  If physicians cannot raise their prices, they are forced to close their practices because they cannot pay the overhead associated with running a practice, and access to health care is reduced for a segment of the population.  Medical liability reform is meant to reduce the cost of health care while preserving access.[5] 

In 2003, Weiss Ratings, Inc. released a study that examined physician malpractice premiums, claims payout levels, the availability of coverage.[6]  The study compared payouts in the states with caps to those without caps.  The study found that payouts were reduced in the states with caps and the growth of the payouts also slowed.  Thus, the caps on damages seem to do what the caps were intended to do:  they restricted recovery.  On the other hand, the study found that malpractice premiums continued to rise.  On this matter, tort reform did not have its intended effect.  It would seem that as payouts decrease, insurance carriers would reduce premiums to reflect lower payouts to plaintiffs.  The study found that states with caps had sharper increases in median annual premiums for doctors in three high-risk specialties: internal medicine, general surgery, and obstetrics/gynecology.  In the states with caps, the annual premiums increased by 48.2 percent as opposed to 35.9 percent in states without caps.  In addition, in the states with caps, premiums were more likely to exceed the national median.

So, if medical malpractice claims are substantially related to medical errors and malpractice premiums are not related to malpractice payouts, then what can be done?   Clearly such a complex problem will require a multi-factorial solution.  To improve both patient safety and the medical liability climate, the tort system must achieve four goals: reduce the rates of preventable patient injuries, promote open communication between physicians and patients, ensure patients access to fair compensation for legitimate medical injuries, and reduce liability insurance premiums for health care providers. [7]  We must overcome the intimidating liability environment so that our common goal of fewer medical errors can be achieved. 

Overall, the remedy of this "crisis" will take a great amount of effort from the government, the insurance carriers, the healthcare industry, and the patients themselves.   We need to create a system which is fair to everyone and does not leave the providers with unlimited risk and increasingly limited reward, and still provides the adequate care for patients.

Article written by:  
Kian Modanlou, M.D.
Associate Professor
University of Tennessee, Transplant Surgery
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