Search

Law and ethics are both essential attributes of a high-functioning health care system and powerful explainers of why the existing system is so difficult to improve. U.S. health law is not seamless; rather, it derives from multiple sources and is based on various theories that may be in tension with one another. There are state laws and federal laws, laws setting standards and laws providing funding, laws reinforcing professional prerogatives, laws furthering social goals, and laws promoting market competition. Complying with law is important, but health professionals also should understand that the legal and ethical constraints under which health systems operate must themselves adapt if health systems science is to advance.

In this issue of JAMA, Mello and colleagues report findings from a review of 37 studies and conclude that increased liability exposure (such as numbers of malpractice claims, dollar amounts of liability insurance premiums, or changes to state malpractice laws) was not associated with improvement in the quality of patient care. Their review draws effectively from databases of peer-reviewed medical literature, economics scholarship, and legal publications, and presents a thorough, necessary, and rigorous analysis of recent research. The review also highlights limitations of prior work. Apart from obstetrical care, studies relating malpractice liability to the quality of medical care have provided few insights about specific practice areas, and there is scant research involving outpatient settings or no-liability control groups. Exposure types, controls, and outcomes were variable, which limited the inferences that could be drawn. Given heterogeneity among the studies, the authors appropriately refrained from conducting a meta-analysis.

Good patient care includes not only avoiding error and injury but also acting honestly and constructively should it occur. Communication and Resolution Programs (CRPs) commit the sponsoring institution to vigilant detection of error, full disclosure to patients and families, and timely redress. CRPs also seek to incorporate the perspectives of patients and family members into safety improvement activities. This chapter explains the principles underlying CRPs, traces their history, and describes current best practices for physicians, provider organizations, and the legal and regulatory environment. Transparency about error and proactive response to injury lagged other professional commitments to patient self-determination because of the emotion and politics surrounding medical malpractice. However, recent generations of physicians, patients, and policymakers have engineered a “quiet” revolution. Silence and secrecy are no longer ethically acceptable responses to medical error. Although additional research is needed on how CRPs affect safety, patient and provider satisfaction, and cost, the American College of Surgeons in 2014 declared CRPs to be, on balance, the most promising approach to medical liability reform.

Objective To describe the litigation experience in a state with strict tort reform of a large public university health system that has committed to transparency with patients and families in resolving medical errors. Data Sources/Study Setting Secondary data collected from The University of Texas System, which self-insures approximately 6,000 physicians at six health campuses across the state. We obtained internal case management data for all medical malpractice claims closed during 1 year before and 6 recent years following the enactment of state tort reform legislation. Study Design We retrospectively reviewed information about malpractice claimants, malpractice claims, and the process and outcome of dispute resolution. Data Collection/Extraction Methods We accessed an internal case management database, supplemented by both electronic and paper records compiled by the university's Office of General Counsel. Principal Findings Closed claims dropped from 244 in 2001–2002 to an annual mean of 96 in 2009–2015, closures following lawsuits from 136 in 2001–2002 to an annual mean of 28 in 2009–2015, and paid claims from 60 in 2001 to an annual mean of 20 in 2009–2015. Patterns of resolution suggest efforts by the university to provide some compensation to injured patients in cases that were no longer economically viable for plaintiffs’ lawyers to litigate. The percentage of payments relating to cases in which lawsuits had been filed decreased from 82 percent in 2001–2002 to 47 percent in 2009–2012 and again to 29 percent in 2012–2015, although most paid claimants were represented by attorneys. Unrepresented patients received payment in 13 cases closed in 2009–2012 (22 percent of payments; mean amount $60,566) and in 24 cases closed in 2012–2015 (41 percent of payments; mean amount $109,410). Even after tort reform, however, claims that resulted in payment remained slow to resolve, which was worsened for claimants subject to Medicare secondary payer rules. Strict confidentiality became a more common condition of settlement, although restrictions were subsequently relaxed in order to further transparency and improve patient safety. Conclusions Malpractice litigation risk diminished substantially for a public university health system in Texas following legal changes that reduced rights to sue and available damages. Health systems operating in a low-tort environment should work with policy makers, plaintiffs’ attorneys, and patient groups to assist unrepresented patients, facilitate early mediation, limit nondisclosure obligations following settlement, and expedite the resolution of Medicare liens.

Importance Honesty and transparency are essential aspects of health care, including in physicians’ and hospitals’ responses to medical error. Biases and habits associated with medical malpractice litigation, however, may work at cross-purposes with compassion in clinical care and with efforts to improve patient safety. Objective To determine the frequency of nondisclosure agreements in medical malpractice settlements and the extent to which the restrictions in these agreements seem incompatible with good patient care. Design, Setting, and Participants We performed a retrospective review of medical malpractice claim files, including settlement agreements, for claims closed before (fiscal year 2001-2002), during (fiscal year 2006-2007), and after (fiscal years 2009-2012) the implementation of tort reform in Texas. We studied The University of Texas System, which self-insures malpractice claims that involve 6000 physicians at 6 medical campuses in 5 cities. Main Outcomes and Measures Nondisclosure provisions in medical malpractice settlements. Results During the 5 study years, The University of Texas System closed 715 malpractice claims and made 150 settlement payments. For the 124 cases that met our selection criteria, the median compensation paid by the university was $100 000 (range, $500-$1.25 million), and the mean compensation was $185 372. A total of 110 settlement agreements (88.7%) included nondisclosure provisions. All the nondisclosure clauses prohibited disclosure of the settlement terms and amount, 61 (55.5%) prohibited disclosure that the settlement had been reached, 51 (46.4%) prohibited disclosure of the facts of the claim, 29 (26.4%) prohibited reporting to regulatory agencies, and 10 (9.1%) prohibited disclosure by the settling physicians and hospitals, not only by the claimant. Three agreements (2.7%) included specific language that prohibited the claimant from disparaging the physicians or hospitals. The 50 settlement agreements signed after tort reform took full effect in Texas (2009-2012) had stricter nondisclosure provisions than the 60 signed in earlier years: settlements after tort reform were more likely to prohibit disclosure of the event of settlement (36 [72.0%] vs 25 [41.7%]; P P = .003), and to prohibit reporting to regulatory bodies (25 [50.0%] vs 4 [6.7%]; P  Conclusions and Relevance An academic health system with a declared commitment to patient safety and transparency used nondisclosure clauses in most malpractice settlement agreements but with little standardization or consistency. The scope of nondisclosure was often broader than seemed needed to protect physicians and hospitals from disparagement by the plaintiff or to avoid publicizing settlement amounts that might attract other claimants. Some agreements prohibited reporting to regulatory agencies, a practice that the health system changed in response to our findings.

Crisis, it is said, means both danger and opportunity. In medical liability reform, however, greater opportunity may lie in noncrisis. In this issue of JAMA, Mello and colleagues offer data suggesting that no crisis of the conventional sort currently exists in the medical malpractice system.

Physician leadership is required to improve the efficiency and reliability of the US health care system, but many physicians remain lukewarm about the changes needed to attain these goals. Malpractice liability—a sore spot for decades—may exacerbate physician resistance. The politics of malpractice have become so lawyer-centric that recognizing the availability of broader gains from trade in tort reform is an important insight for health policy makers. To obtain relief from malpractice liability, physicians may be willing to accept other policy changes that more directly improve access to care and reduce costs. For example, the American Medical Association might broker an agreement between health reform proponents and physicians to enact federal legislation that limits malpractice liability and simultaneously restructures fee-for-service payment, heightens transparency regarding the quality and cost of health care services, and expands practice privileges for other health professionals. There are also reasons to believe that tort reform can make ongoing health care delivery reforms work better, in addition to buttressing health reform efforts that might otherwise fail politically.

Communication-and-resolution programs (CRPs) in health care organizations seek to identify medical injuries promptly; ensure that they are disclosed to patients compassionately; pursue timely resolution through patient engagement, explanation, and, where appropriate, apology and compensation; and use lessons learned to improve patient safety. CRPs have existed for years, but they are being tested in new settings and primed for broad implementation through grants from the Agency for Healthcare Research and Quality. These projects do not require changing laws. However, grantees’ experiences suggest that the path to successful dissemination of CRPs would be smoother if the legal environment supported them. State and federal policy makers should try to allay potential defendants’ fears of litigation (for example, by protecting apologies from use in court), facilitate patient participation (for example, by ensuring access to legal representation), and address the reputational and economic concerns of health care providers (for example, by clarifying practices governing National Practitioner Data Bank reporting and payers’ financial recourse following medical error).

Tort reformers blame the high cost of American health care on defensive responses to rampant medical malpractice litigation. Defenders of the tort system counter that holding health care providers liable for negligence improves safety and ensures compensation for injury. The relationship between medical malpractice and health care expenditures is more complex than either of these positions reflects. The existing medical malpractice system increases medical spending mainly because it has evolved in tandem with other inflationary features of the health care system and may make those features even more difficult to change. In other words, medical malpractice is both a symptom of a costly health care system and a costly disease in its own right.

We are currently coming to the end of what I have described as the first malpractice crisis of the 21st century. Malpractice crises, which are defined by shrinking liability coverage and/or rising premiums, occur periodically. The insurance crisis that now seems to be ebbing was different in certain ways from its 20th century predecessors, but will almost certainly not be the last such period to arise. As interest in "solving" this crisis wanes for various reasons, we have to ask what we have learned from the last five years. In my opinion, this crisis has produced strong arguments for testing comprehensive approaches to medical liability that connect to quality, that connect to health insurance benefits, that connect to provider payment, that connect to the big professional and social issues in health care. Only in this way can we break through the conventional doctors-versus-lawyers battle lines that have defined malpractice reform for generations of physicians and politicians. Why do we have trouble taking this next step? Alice Gosfield hit the nail on the head when she commented that the trick is to change the system for the people who want and deserve change rather than for everyone at once. As Alice observed, why should the worst performing doctors get the benefit of an improved system of resolving disputes and compensating injured patients? Why not start with the best performing doctors? Why not start with people who want to change the rules and who can prove that they are likely to perform well in terms of quality, safety, and honesty under different rules? Proposals to "demonstrate" comprehensive malpractice reform follow from this insight. Funded demonstration projects are familiar in connection with complex, publicly financed care under Medicare and Medicaid, where the entity paying the bill sponsors and monitors experimental changes to existing rules. In malpractice policy, however, demonstration projects are far more controversial than one would expect. To understand why, let us explore liability reform during the most recent crisis period.

The political battle over trial lawyers and "tort reform" centers on whether or not to reduce incentives to sue for medical malpractice by capping damages in malpractice suits and limiting legal fees. But the current struggle mis-states the case for innovation in medical malpractice policy. Rather than focus exclusively on the financial consequences of legal claims, malpractice reform should move closer to the bedside, emphasizing error prevention, open communication, rapid compensation, and efficient insurance of the costs of injury. Academic health centers are well positioned to lead this effort in each of their three recognized missions: patient care, teaching, and research. Academic health centers enjoy greater institutional cohesiveness and research capacity than most other medical practice settings. Perhaps most important, their high visibility ensures that patients who suffer avoidable harm within their walls become salient to the public as individuals, not merely as dollar entries in a litigation ledger.

There is increasing interest among policy makers in an integrated approach to patient safety and medical liability. This chapter proposes and develops a breakthrough medical malpractice reform: a system of medical error identification, patient notification, rapid compensation, and safety improvement within the Medicare program. The reform would provide Medicare beneficiaries with better safety, improved communication in event of error, preservation of therapeutic relationships, timely settlement, and fair compensation at lower administrative cost. Disputes in the reformed system would be adjudicated by Medicare's existing administrative appeals system, which would work together with Medicare's quality improvement regulation and payment policy to reduce errors and compensate injured patients. Testing reform within Medicare would also make it possible to extend future reforms to the Medicaid population, which is also less likely than younger, nonindigent patients to bring malpractice claims.

When experts discuss health policy, they typically mean the factors that affect access to medical care, its quality, and its cost. The first medical malpractice crisis of the twenty-first century began in 2001 and continues into 2006. Previous malpractice crises occurred in the 1970s and 1980s. Until the current crisis, few connections have been drawn between the medical malpractice reform movement and overall health policy. Malpractice crises are defined by rapidly rising liability insurance premiums for physicians, sometimes accompanied by difficulty obtaining insurance coverage at any price. Because lawsuits are upsetting as well as financially costly to physicians, and because armies of white-coated demonstrators make good political theater, hand-wringing over physicians leaving practice and hospitals closing their doors is standard fare for “tort reformers” in crisis years. During the longer intervals between crises, when insurance premiums are stable, malpractice reformers sustain momentum for their cause by suggesting that physicians' fear of litigation leads them to waste health care resources on “defensive medicine” and contributes significantly to overall medical inflation. For the most part, however, these issues have been voiced as political rhetoric and not incorporated seriously into policy making.

Medical malpractice lawsuits are common and controversial in the United States. Since early 2002, doctors' insurance premiums for malpractice coverage have soared. As Congress and state governments debate laws intended to stabilize the cost of insurance, doctors continue to blame lawyers and lawyers continue to blame doctors and insurance companies. This book, which is the capstone of three years' comprehensive research funded by The Pew Charitable Trusts, goes well beyond the conventional debate over tort reform and connects medical liability to broader trends and goals in American health policy. Contributions from leading figures in health law and policy marshal the best available information, present new empirical evidence, and offer cutting-edge analysis of potential reforms involving patient safety, liability insurance and tort litigation.

The Article distinguishes and explores three categories of information use: Helping patients understand and participate in their care; Improving patient safety, including analyzing medical errors and identifying unsafe health care providers and practices; and Assessing the performance of the medical liability system in its many dimensions including deterrence, compensation, justice, administrative efficiency, and stability. For each category, the Article comments on existing laws or programs for information reporting or disclosure, points out major tensions or ambiguities, and suggests pragmatic improvements.

The medical malpractice crisis we think we are in is not the medical malpractice crisis we actually are in. Today's malpractice crisis is not an epidemic of lawsuits, impressionable juries, or even excessive insurance premiums. The real medical malpractice crisis is that the law has formed little connection between the malpractice system and the health care system.

Calling malpractice reform a "health policy problem" means that we should analyze it in terms of the quality of health care, access to health care, and the cost of health care-the basic health policy triad with which we all are familiar. We immediately recognize patient safety as a health policy problem because it is obviously about quality. We may believe there is so much slack in the health care system that we can make major improvements in patient safety without excessive cost. But ultimately, there are going to be cost-safety tradeoffs, which are also health policy concerns. We tend not to think about patient safety as an access problem because we assume that health services have been received; but I suspect at some point we will start talking about the access-related causes of medical errors. On the other hand, beyond the sweeping assertion that physicians will quit practice if lawsuits are not restricted, medical malpractice reform is not typically dealt with as a health policy problem. Is this not odd? Here we have two things, patient safety and medical liability, that are logically connected, but one is debated in health policy terms and the other is not. When they do appear together in the same sentence, or more likely in the same piece of legislation, one gets a strong sense that the juxtaposition is more for rhetorical effect than for substance.

Tom Baker and Mark Geistfeld's contributions to this Symposium offer detailed and persuasive analyses of medical malpractice insurance. Their principal contribution to the malpractice reform debate, however, is simple: confirming that liability insurers should not be left to their own devices between malpractice crises or appeased during crisis periods. Instead, liability insurance must be consciously designed to help the health care system work toward its core goals of high quality, broad access, and affordable cost. In 2000, the IOM issued a follow-up report to its earlier indictment of medical error, calling upon the health care system to become safe, effective, patient-centered, timely, efficient, and equitable. The medical malpractice system possesses none of these qualities, in large part because of the incentives created by third-party liability insurance. The inadequacy of the current insurance system should be readily apparent to both market participants and malpractice reformers. History and politics, however, have blinded them to the obvious. In the topsy-turvy world of medical malpractice policy, grassroots constituencies seem to have their heads in the clouds, while scholars peering out of the ivory tower somehow manage to see the lay of the land.

Medical malpractice is the “Rip van Winkle” issue in American health care. However, its periodic awakenings depart from those of its fictional counterpart in an important respect. Neither the participants in the medical malpractice system nor outside observers seem aware that the context for minimizing medical errors, improving legal dispute resolution, and keeping liability insurance available and affordable has changed. This chapter explains why the public policy of medical malpractice is so poorly connected to overall health policy. It examines three aspects of health system change since the 1970s—medical progress, industrialization, and cost containment—that have exposed serious weaknesses in the medical liability system. It suggests ways to convert liability into a general health policy issue, including having the federal government implement a system of error identification, fair compensation, and efficient dispute resolution that would apply to Medicare and Medicaid patients.

For over a century, opposition to malpractice litigation has been a litmus test for membership in the medical profession. Doctors hate malpractice suits. They hate them passionately and continuously. Being sued becomes a recurring nightmare for many physicians, and occasionally an obsession. Eliminating malpractice suits takes precedence over every other political objective—whether public-interested or self-serving—for the American Medical Association and state medical societies. No contradictory belief, however well-reasoned, empirically based, or sincerely held, succeeds in crowding out antipathy toward malpractice from physicians’ minds.

Although the most visible manifestations of medical malpractice involve patient safety and the legal process, the availability and affordability of liability insurance largely determine the direction of medical malpractice policy. Scientific and industrial developments since the first modern malpractice crisis in the 1970s reveal major problems with the structure and regulation of liability insurance. Comprehensive reforms that approach medical malpractice insurance as a health policy problem are needed, and the Medicare program may have a major role to play.

Political debate over medical malpractice reform seldom takes meaningful account of its policy context, including the emerging science of patient safety. Instead, stakeholders on both sides use the rhetoric of patient safety to support entrenched positions on hardened proposals such as capping damages and limiting access to information about errors. Despite its déjà vu quality, the current malpractice crisis can only be understood and addressed as the product of changes in the health care system since the last crisis nearly twenty years ago—changes that also informed the patient safety movement. Patient safety may therefore serve as a bridge between medical liability and health policy.

“Regulation by litigation” is a recently recognized trend in American legal governance that develops differently in each economic sector it affects. In health care, widespread litigation can be viewed as the product of three partial transformations: incomplete industrialization, incomplete consumerism, and incomplete social solidarity. One can argue that the public turns to the courts because other actors who might exercise judgment and authority to resolve problems appear unreliable. Because litigation has several features at odds with sound health policy—including its cost,its hindsight bias, and its adversarial character—it may be necessary to develop new discretionary institutions to address specific questions that regulators cannot or will not answer.

Health policy would be better off without certain terms. "Managed care" is one—no matter where one stands on consideration of cost in medical treatment. "Medical necessity" is another. But "malpractice liability" heads my list of semantic stowaways whose excess baggage imperils the vessel on which they travel. Much of the medical profession's resistance to regulatory accountability can be traced to the sense of betrayal and persecution most physicians feel when accused of malpractice.

Ask medical professionals to choose a statement from the list above regarding federal efforts to root out health care fraud and abuse, and it is more likely that they will select responses from the end of the list than from the beginning. The article by Kalb in this issue of THE JOURNAL reveals the scope of the government's antifraud enterprise, but the question remains: what exactly is government doing? The story of fraud and abuse law is a tale of path dependence. The enactment of Medicare and Medicaid legislation 35 years ago was hailed as a step toward completing the New Deal and creating the Great Society. Indeed, these programs have proved a tremendous boon to the nation's elderly and indigent; to health facilities, suppliers, and professionals; and to innovation in medical science. Yet any sizable government program inevitably creates incentives for overspending. In 1964, however, achieving political consensus required replicating within Medicare the unthreatening, familiar landscape of private indemnity insurance: separate hospital and professional components; private contractors as fiscal intermediaries and carriers; payment based on usual and customary fees; and a pledge of noninterference with physician decision making. These constituted the medical profession's price, which President Lyndon Johnson was happy to pay. "Five hundred million [dollars]," he reportedly exclaimed when told the supposed cost of these concessions, "Is that all? Do it. Move that damn bill out now before we lose it." Absent, unfortunately, was the private marketplace's sensitivity to premium increases.

[Assumptions about quality in health care and its defense] are rooted in the past, a past in which the doctor ruled. Strangely, those assumptions have survived the revolutions that now deny the doctor the sole authority to judge and guide care. The doctor no longer really controls health care, as in the days of solo practice, but, when it comes to quality, the doctor is still held accountable. When the researchers study quality, they focus on the behavior of the physician. When the Quality Assurance Committee meets, it reviews the performance of the physician. When the payers and the regulators turn on their searchlights, they want doctors in their glare. Control is shifting, structure is shifting, the pattern of care is shifting; but accountability is not. This passage prefaces a landmark report on the application to health care of quality improvement methods used successfully in other industries.

This note will use the principles of law and economics to examine the interaction of market structures and product liability rules in a world of imperfect information. The goals of the analysis are to create incentives for optimal care by producers and consumers, induce the socially appropriate amount of consumption of each product (often referred to as the "activity level"), and minimize the costs of bearing the risk of injury. The note will conclude that the existence of health maintenance organizations ("HMOs") and similar prepaid providers with superior information capacity and total patient care responsibility may create a context in which current standards of drug liability should be revised.

The purpose of this article is to help health care providers and insurers create such an approach by explaining the benefits and risks of voluntarily reassigning liability for medical injury along an enterprise liability model, and by outlining the legal and contractual elements that are required to do so successfully.