The lack of consistent and effective medical liability tort reform throughout the country ranks as the largest issue affecting the healthcare system. Physicians and patients could benefit from improved tort reform in the United States. Medical liability tort reform impacts malpractice premiums, access to medical care and the quality of care delivered.
Medical liability tort reform can be split into two key components, pre-trial and post-trial. The pre-trial reform component concerns matters such as who can file a lawsuit and the worthiness of the case, with respects to the medical care rendered. In some jurisdictions family members file suits on behalf of an injured party. This is in addition to the injured party filing a lawsuit. In some instances, “pro se” lawsuits are filed. “Pro se” means that the plaintiff is not represented by an attorney. These caveats only serve to increase the number of suits. Some jurisdictions require a certified medical expert to sign off on a case prior to it being filed. Without this provision and others like it, court dockets fill up with frivolous and duplicate lawsuits.
Post trial reform includes limits and restrictions on what can be paid as damages and the amount of those damages. Damages are usually separated into economic and non-economic categories. Non-economic damages include restitution for pain and suffering, loss of consortium and punitive damages. Economic damages include lost wages and the patient’s medical bills. In medical malpractice lawsuits, the plaintiff can request as damages the full amount billed by the provider, as opposed to the amounts paid to the provider by a third party payor. Obviously a cap placed on either of these types of damages is beneficial to physicians in regards to the malpractice premium.
The majority of medical professional liability policies provide coverage on a first dollar basis with defense costs outside the limits of liability. The premium has an administrative and claim factor built into the rate for every specialty. The more that factor increases, the higher the premium. The cost of damages is also a factor built into the rate for the premium. Uncapped damages make it difficult for insurers to accurately calculate the indemnity factor. Jury verdicts are often unpredictable and inconsistent even in similar demographic jurisdictions. Plaintiffs understand this and often try to inflate the true “value” of their cases. This increases the severity factor of malpractice claims. Frivolous lawsuits combined with uncertainty in the courts drive up the overall cost of malpractice insurance, including the premium.
Increased malpractice premiums for a physician, or group practice, bring heightened focus to the bottom line and operating more efficiently. Usually operating more efficiently is desirable in any business setting, but for physicians, this has become an increasingly difficult task. Overhead costs are rising as the cost of providing medical care increases. But it is not only the cost of providing medical care, but the cost of doing business. A few expenses that drive up the cost of doing business include employee salaries and benefits, leased office space and utility costs. On the other hand, reimbursements to physicians have been falling in recent years as health insurers and the government programs try to curb their costs. The net overall effect appears in the form of a shrinking income, forcing many physicians to close their doors. For those that struggle to stay open, they attempt to offset this decrease in profit margin, or increase in deficit, by seeing more patients during the already full workday.
As physicians begin to see more patients per day, the quality of care begins to diminish. The reduced time spent with each patient increases the chance of a medical error occurring. As the likelihood for error increases, so does the physician’s potential for liability, thus creating a circular problem. There is a business need to see more patients, but by doing so, the physician increases the chance of an error, increasing his overall liability, which could raise the premium if litigation eventually results. A decrease in the quality of patient care is another tangential effect of liability reform driving up malpractice costs.
While the quality of care to patients suffers, access to medical care also decreases for patients. With shrinking, and sometimes disappearing, profit margins, many physicians find themselves in the position to either close their doors, relocate or retire. This holds especially true in rural areas and poorer neighborhoods where there just doesn’t exist the large number of patients to support the practice. While all types of physicians experience this economic crunch, including specialists like obstetricians, primary care physicians are most affected. In order to maintain a level of profit, or just break even, these physicians are forced to move closer to metropolitan areas where there is a larger patient base. This forces patients in rural and poorer neighborhoods to travel further distances for medical care or choose to go without.
In addition to impacting malpractice premiums and access to medical care, the lack of liability reform gives rise to the concept of defensive medicine. During training, physicians are taught primarily evidence-based medicine. But in the world of private practice, with every patient a potential plaintiff, defensive medicine reigns supreme. This phenomenon results in an increased overall cost of healthcare per patient. Physicians order scores of potentially unnecessary tests and labs mainly to better defend themselves in a potential suit. With the ever-increasing cost of medical technology, defensive medicine in some ways keeps inflating the true cost of healthcare.
Defensive medicine can also have a subtle effect on a physician’s confidence and judgment. If a physician lives in constant worry that their decision, not only could be, but also will be second-guessed, their confidence level may be adversely affected. Typically physicians are well educated, well trained individuals who want to do nothing more than help patients. That confidence level is deflated when, in a courtroom, the physician is accused of “killing their patient.” These accusations can damage the psyche and some physicians find it difficult to recover from this painful experience.
With improved tort reform, the practice of defensive medicine would diminish, malpractice premiums would decrease and the quality of, and access to, medical care would increase. Other aspects of the healthcare system deserve discussion, such as the uninsured and underinsured population. The inefficiencies of Medicare and Medicaid need attention as well. However, reform and modifications to any of those areas will only increase the cost of medical care and potentially reduce the quality of care provided to patients. Consistent and effective tort reform will help to lower healthcare costs and increase the quality of care to all patients.
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