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Health care has grown over the past 40 years. Both the number of professional negligence lawsuits per doctor and the compensation paid per claim increased rapidly between the 1960s and 1980s (Danzon, 2000). After 1990, the frequency of requests stabilized at around 15 applications per 100 physicians per year, but awards per application continued to increase and doubled in real terms between 1990 and 2001 (Thorpe, 200). However, by the late 2000s, there was some evidence that the frequency of complaints had begun to decline (Weiss, 200).
At the same time, the system can encourage the excessive use of preventive or defensive medications. While doctors are largely insured against the financial costs of negligence lawsuits, uninsured non-financial costs, such as wasted time, stress, and reputational damage, may be much more important. And as Craswell and Calfee (198) show, uncertainty in the legal level of diligence can also lead to excessive caution, due to the all-or-nothing nature of the liability decision. On the contrary, “indirect reforms have had a less consistent impact on liability and, therefore, on pressure for malpractice.”.
One of the most important reforms of this kind is the limits to joint and several liability. By default, the doctrine of joint and several liability allows the plaintiff to collect all of his damages from any defendant, regardless of the extent of the defendant's fault. The limits of joint and several liability either abolish the doctrine of joint and several liability, exclude damages for pain and suffering caused by it, or prohibit its application if the defendants did not act in a concerted manner. Other important indirect reforms impose mandatory periodic payments, which require that, in certain cases, damages be disbursed in the form of an annuity that is paid over time and limits on the contingent fees that can be charged by plaintiffs' lawyers.
Some examples of studies that have estimated the effects of reforms on malpractice pressure are Danzon (1982, 1998); Sloan, Mergenhagen and Bovbjerg (198); Thorpe (200); Avraham (200; 2) and Born, Viscusi and Baker (200). However, if taken alone, the estimates of these studies are only the first step in answering the political question of interest. They show how liability reforms affect physicians' incentives; they don't show how liability reforms affect doctors' behavior. To assess the efficiency of precautionary behavior induced by the liability system, we must compare the way in which the costs of precaution and losses due to adverse events respond to changes in the legal environment.
However, concerns about unobserved differences between suppliers and between small geographical areas influence these results. The studies mentioned above use information on claims or premiums at the level of doctors, hospitals, or individual areas of a single state for a limited period of time to measure the pressure for malpractice, but negligence laws within a state at any given time are consistent. Therefore, the variation in your pressure measures due to negligence may be due to unobserved factors that are correlated with the cost and outcomes of care. For example, the frequency of insurance claims or premiums for a particular provider or area may be relatively high because the provider is of relatively low quality, because patients are particularly ill (and are therefore likely to suffer adverse outcomes), because patients had more “taste” for medical interventions (and were therefore more likely to disagree with their provider regarding management decisions) or by many other factors.
Since these factors are extremely difficult to fully capture in observational datasets, the estimates from these studies represent a combination of the true effect of negligent pressure on treatment decisions or outcomes and unobserved differences in providers, patients and areas. One way to address these concerns is to identify the effects of malpractice pressure with variations in state liability law reforms and over time. This technique provides unbiased assessments of the impact of negligence pressure, based on the assumption that the adoption of reforms due to negligence is not correlated with unobserved differences between states in the determinants of treatment decisions and health outcomes. This assumption can be criticized; for example, see Danzon (2000) and the Congressional Budget Office (200).
Two studies identify the mechanism through which civil liability reforms affect the behavior of doctors, helping to predict the effects of existing reforms under different market conditions and of new untested reforms. In Kessler and McClellan (2002b), we compared longitudinal Medicare data with legislative reforms and data on health insurance markets to explore the ways in which managed care and liability reform interact to affect treatment intensity and health outcomes. We report that direct reforms, such as damage limits, reduce defensive practices in areas with low and high levels of enrollment in managed care. At least for patients with less serious heart diseases, managed care and direct reforms replace efforts to reduce defensive practices, so the reduction in defensive practices that can be achieved with direct reforms is lower in areas with a high enrollment of managed care.
In Kessler and McClellan (2002a), we integrate four unique data sources to illustrate how reforms affect the pressure of negligence and how reform-induced changes in incentives offered by the liability system affect treatment decisions, medical costs, and health outcomes. This document coincides, by state and year, with the above-mentioned longitudinal Medicare data (updated to include all years between 1984 and 1999) with data on legislative reforms, medical-level data on the frequency of negligence claims from the American Medical Association, and data at the level of negligence claims from the American Medical Insurers Association. We demonstrate that direct reforms improve medical productivity, mainly by reducing the rates of negligence claims and compensation conditional on demand, suggesting that other policies that reduce time spent and the number of conflicts involved in defending against a lawsuit may also reduce defensive practices. A representative conclusion is that, at least in the case of elderly patients with heart disease, an untested reform that will reduce the legal defense burden on doctors and hospitals by a quarter, which is within the range of political possibilities, can be expected to reduce the intensity of medical treatment by approximately 6 percent, but will not increase the incidence of adverse health outcomes.
In the same population, a policy that would accelerate the resolution of claims within six months would generally reduce hospital treatment costs by 2.8 percent without major adverse outcomes. This finding is consistent with that of Kessler and McClellan (1999), where we reported wide differences in physicians' perceptions of the impact of negligence pressure in states with and without liability reforms. Several more recent studies update and refine these estimates of the effects of civil liability reform and generally find a small but significant impact on positive defensive medicine. Hellinger and Encinosa (200) find that states that adopt non-economic harm limits have 3 to 4 percent lower total health spending than states that do not adopt them.
Baicker, Fisher and Chandra (200) believe that the increase in compensation and premiums for negligence is associated with greater spending on Medicare, especially diagnostic imaging services, which are often believed to be due to doctors' fear of malpractice; Smith-Bindman, McCulloch, Ding, Quale and Chu (forthcoming) confirm this latest finding with an analysis showing a increased use of CT scans and emergency MRIs in states without reforms. Sloan and Shadle (200) consider that direct reforms have a negative, but statistically negligible, effect on Medicare spending, with no significant effect on health outcomes. Avraham and Schanzenbach (20) show that the effect of the reductions in health spending induced by the reform translates into increases in private health insurance coverage. Another study examines the incidence of defensive practice in obstetrics.
Using national birth certificate data, Dubay, Kaestner and Waidmann (199) show that the risk of negligence claims leads to increased rates of caesarean births, but not to better birth outcomes. Similarly, Yang, Mello, Subramanian and Studdert (200) find a negative effect on C-section rates, although Currie and MacLeod (200) (they are also analyzing caesarean sections) find a positive effect of maximum limits and a negative effect of limits on joint and joint liability. As evidence for positive defensive medicine has accumulated, its conclusions have become more widely accepted. For example, the Congressional Budget Office (200) found that the adoption of direct reforms leads to a significant reduction in Medicare hospital spending per beneficiary, but questioned whether its conclusions, and mine by Mark McClellan, are valid estimates of the causal effect of the reforms.
However, the Congressional Budget Office (Elmendorf, 200) reviewed this previous assessment of the effects of liability reform and concluded that “the weight of empirical evidence now demonstrates a relationship between liability reform and the use of health services. The evidence for negative defensive medicine is more mixed. In one of the few articles that measures how negligent liability leads to patient avoidance, Dubay, Kaestner and Waidmann (200) examine the effect of liability reforms on antenatal care, use and health of infants. They found that pressure due to negligence causes antenatal care to begin later in the pregnancy, although without significant harmful effects on the baby's health.
In Kessler, Sage and Becker (200), my co-authors and I applied the approach of Kessler and McClellan (199) to assess the impact of reforms on the supply of doctors. We compared data from the American Medical Association's Master File of Physicians on the number of practicing physicians in each state each year between 1985 and 2001 with legislative reforms and data on health markets. We found that, three years after their adoption, direct reforms increase the supply of doctors by 3.3 percent, controlling fixed differences between states and other state characteristics that vary over time; using similar methods, Encinosa and Hellinger (200) report even greater effects. On the contrary, Klick and Stratmann (200) and Matsa (200) do not find any effect of the reforms on the total supply of doctors, but they do find a significant positive effect on the supply of specialty doctors with a high risk of negligence and in rural areas, respectively.
A guidely-based negligence system would preserve most aspects of the current liability system, but it would change the method by which the medical malpractice element of a negligence claim is judged. Under common law, doctor negligence is a matter of fact for the jury, based on expert testimony. While the guidelines may seem like an obvious source of information about the negligence of a given treatment decision in a medical malpractice case, courts generally prohibit the guidelines from being admitted as evidence under the “rumors” rule, which prohibits the presentation of extrajudicial statements as evidence. In some cases, guidelines are allowed by virtue of the exception of “scholarly treatises” to the rumor rule.
However, even in those cases, under the common law of most states, no set of guidelines necessarily prevails over another, and the guidelines carry no more weight than any other form of expert testimony (EE). Office of Congressional Technology Assessment, 1999. Therefore, the adoption of a guidely-based system would generally require legislative action. Advocates of corporate responsibility argue that this would make the existing malpractice system more efficient (Sage, 199). They argue that health organizations, such as hospitals or health plans, have the capacity to supervise doctors at a comparatively low cost, so these organizations could act as efficient intermediaries between doctors and the civil liability system.
In addition, to the extent that medical errors are due to systemic errors and not to the negligence of individual physicians, assigning responsibility to institutions could lead to improved quality throughout the system. For the same reasons, the imposition of corporate liability could improve the functioning of the medical malpractice liability insurance market. Detractors insist that corporate responsibility can already be applied privately, but it is rare, suggesting that the benefits derived from corporate responsibility may be limited. Proponents have two answers to this criticism.
First, they argue that the benefits of corporate responsibility can only be achieved if a large number of suppliers adopt it. According to this reasoning, improvements in efficiency resulting from changes in medical practices due to private agreements “range from adoptive providers to non-adopters” (Baker, 199). Second, they argue that failed negotiations inhibit the ability of doctors and health institutions to reap the benefits of corporate responsibility. Hospitals' relationships with doctors are restricted by anti-bribery laws, which prevent hospitals from paying doctors for referrals.
In addition, doctors and hospitals cannot receive or divide the profits derived from corporate liability that would accrue for patients in the form of a (uncompensated) decrease in damages caused by medical errors. In both cases, proponents argue that statutory reform is necessary to facilitate the adoption of a system of corporate responsibility. No state has adopted legislative reforms to impose or facilitate corporate responsibility, so there is little systematic empirical evidence on their effects. However, current examples of voluntary corporate responsibility deserve greater empirical attention.
Along with the examples mentioned above, some managed care organizations, such as Kaiser Permanente, and government organizations such as the Veterans Administration (Sage, Hastings, & Berenson, 1997) expressly assume responsibility for the negligent actions of staff physicians. The effects of corporate responsibility could be identified by comparing its practices with the practices of suppliers of otherwise similar organizations that do not assume responsibility. Binding alternative dispute resolution refers to agreements between providers and patients to submit disputes about alleged malpractice to a third party other than a court. Advocates of this approach argue that it compensates victims more quickly, fairly and with lower transaction costs.
It is also alleged to improve the deterrent signal for suppliers, due to their more informed and coherent decision-making process (Rolph, Moller & Rolph, 199). Those who oppose binding alternative dispute resolution argue that their decisions are biased towards the defendants, because firms that provide arbitrators, and the arbitrators themselves, are more likely to develop links with supplier organizations than with individual plaintiffs. In addition, opponents criticize the fact that parties to a binding alternative dispute resolution generally have limited appeal rights and therefore a limited capacity to correct erroneous decisions (Polzer, 2000). As with corporate responsibility, a strong argument against binding alternative dispute resolution is that it can already be implemented privately, but it rarely is.
In a survey of California doctors and hospitals, Rolph et al. According to a related survey conducted by the California Health Plan Association, only Kaiser Permanente and six small plans used alternative dispute resolution to settle negligence claims; other plans used it only to resolve contractual disputes. Advocates for alternative dispute resolution respond that such agreements are technically enforceable under federal law, but state legislative and judicial hostility prevents their implementation (Metzloff, 199). Specifically, the Federal Arbitration Act of 1925 makes binding arbitration mandatory and takes precedence over inconsistent state laws; however, state legislatures and courts have imposed limitations on arbitration that have been upheld in federal courts (Polzer, 2000).
While no state has adopted any of these reforms, three types of studies can be used to assess their potential effects. First, in the 1970s, some states adopted no fault in motor vehicle injuries, and studies on their consequences highlight some strengths and weaknesses. According to Carroll, Kakalik, Pace, and Adams (199), the costs of litigation, settlements, and other forms of compensation administration in a typical motor tort liability system represented approximately one-third of the cost of injuries covered by insurance (although this excludes the substantial publicly funded costs of administering the civil justice system). Under a typical no-fault plan, they find that transaction costs would be reduced by 39 percent.
It also demonstrates that the absence of fault provides quicker compensation for car accidents and causes you to track economic losses more closely. Under a typical civil liability system, claimants receive initial compensation payments 181 days after the accident; under a typical no-fault system, claimants receive initial compensation payments 116 days after the accident. In addition, under a typical civil liability system, plaintiffs with less serious injuries tend to receive more than their economic losses (see also Carroll and Abrahamse, 1999, and the work cited in them, to demonstrate the extent of overcompensation due to fraud and abuse), since 62 percent of all injured people receive more than their financial loss; on the contrary, plaintiffs with more injuries serious people tend to receive less than their financial loss, and 27 percent of injured people who receive less than what they lose economically. Carroll and Kakalik (199) argue that a typical no-fault system, compared to a typical civil liability system, reduces both overcompensation for minor injuries and subcompensation for serious injuries.
Empirical work investigating the effects of lack of fault on the rate of motor vehicle accidents generally reveals that it leads to a greater number of fatal accidents, and some articles based on previous data find no effect; this evidence is reviewed in Kessler and Rubinfeld (200). The effect of the absence of medical fault on physicians' incentives could be greater than the effect of the absence of automatic fault on drivers' incentives; after all, in the context of cars, drivers still face strong incentives to avoid accidents, even without fault, the personal cost of injuries and criminal penalties, which are arguably weaker in the medical context. Second, little is known about how the liability system will interact with recently proposed payment reforms that seek to reduce incentives to provide cost-effective care. The conclusion of Kessler and McClellan (2002b) that the reduction in defensive practices achieved with civil liability reforms in the 1990s was lower in areas with a high enrollment of managed care suggests that payment reform and civil liability will replace an effort to reduce defensive medicine; future research could try to model these relationships more formally.
Third, the effect of the malpractice system and civil liability reform on the growth of health spending, unlike the level, also remains an important topic for future research. On the one hand, the fact that most high-income countries have recorded similar spending growth rates, despite having very different systems of responsibility, suggests the lack of a causal relationship (Smith, Newhouse & Freeland, 200). On the other hand, since the level of care required by the negligence rule changes with the availability of new treatments, higher-pressure negligence regimens have the potential to encourage a more rapid spread of technology and a faster growth in spending. While studies showing an effect of negligent pressure on the use of high-tech services, such as intensive heart care and imaging, suggest that the accountability system can influence technology adoption decisions, there is surprisingly little convincing evidence that they do.
I would like to thank Ashley Ensign for her excellent research assistance and the Manhattan Institute, the National Institute on Aging, through the National Office of Economic Research, and the Stanford Office of Undergraduate Counseling and Research for their financial support. Some parts of this essay are largely based on my previous work. Any point of view expressed is only mine. National Library of Medicine8600 Rockville Pike Bethesda, MD 20894 Web Policies: FOIAHHS Vulnerability Disclosure.
Because many cases of malpractice involve patients who were already sick or injured, there is often a question as to whether what the doctor did, negligent or not, actually caused the damage. For example, if a patient dies after treatment for lung cancer and the doctor did something negligent, it may be difficult to prove that the doctor's negligence caused the death and not the cancer. The patient must demonstrate that it is more likely that the doctor's incompetence directly caused the injury. Usually, the patient must have a medical expert testify that the doctor's negligence caused the injury.
Therefore, the state law governing medical malpractice may vary between different jurisdictions in the United States, although the principles are similar. Sweden, Finland, Denmark and Norway also use out-of-court and no-fault systems for medical malpractice cases, designed to compensate patients for injuries they suffer due to avoidable risks and complications related to health care. In the United States, lawyers for aggrieved patients are hired by the patient, usually in exchange for unforeseen fees, and the lawyer collects money only if monetary compensation is awarded. Many people find that the most practical and affordable way to file a negligence claim is to hire an attorney who specializes in medical malpractice.
. In Japan, almost half of doctors belong to the Japanese Medical Association and are covered by a group insurance network in case of negligence. Allergic reactions to anesthesia can also cause complications or death and are often associated with doctors not taking a complete medical history or reviewing allergies reported by a surgical patient to certain types of medications. Contact David Bryant Law today for a free consultation to discuss the details of your medical malpractice case and learn how it could help you after your preventable injuries.
Physicians employed by the NHS are not personally responsible for negligence claims and do not have to take out malpractice insurance coverage. The United States has a contradictory system of resolving medical malpractice lawsuits, similar to the method of resolving other civil disputes. Arbitration is an alternative form of dispute resolution that has been adopted by many states in the U.S. U.S., but not to settle medical malpractice lawsuits.
Medical malpractice law is highly regulated by a complex set of regulations, which vary considerably from state to state, so it is often essential to obtain the advice or representation of an attorney. One of the most common reasons for filing a medical malpractice lawsuit is diagnostic errors, such as misdiagnosis and delayed diagnosis. Earlier this decade, two large Australian insurers that financed the defense of medical malpractice lawsuits went bankrupt and needed a government bailout. Medical negligence occurs when a doctor, hospital, or other healthcare provider harms a patient by not following the recognized standard of care.
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