Malpractice Reform: In Search of an Approach that is Rational, Fair, and Promotes Quality Improvement

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1 Malpractice Reform: In Search of an Approach that is Rational, Fair, and Promotes Quality Improvement Joshua B. Murphy, JD Mayo Clinic Legal Department Rochester, MN

2 Presenter Disclosures Joshua B. Murphy, JD Malpractice Reform: In Search of an Approach that is Rational, Fair, and Promotes Quality Improvement Financial Disclosures: None Unlabeled/Unapproved Uses Disclosures: None

3 Unpopular in a Room Full of Doctors Disclosures I don t think there is an epidemic of frivolous malpractice lawsuits I don t think damages caps are fair I don t think the direct cost of malpractice litigation is a significant problem for the health care industry Although defensive medicine is a problem I do think physicians fears of malpractice litigation are out of proportion to reality

4 I Sort of Live in Bubble Disclosures Where I work, our medical liability costs are less than 50% of our industry benchmark We win over 90% of our malpractice trials Minnesota (along with Wisconsin and South Dakota) has the lowest malpractice premiums in the country $13,500 per year for a general surgeon in 2009

5

6 And yet... I firmly believe the medical liability system has major flaws that Create significant barriers to quality improvement, and Fan the flames of litigation

7 Why do patients sue? They believe in some cases correctly that a medical error caused harm A lapse in the quality of medical care They believe in some cases incorrectly that a medical error caused harm A potential lapse in provider-patient communication For additional reasons why patients sue, see Vincent et al., 343 Lancet 1609 (1994) Hickson et al., 267 JAMA 1359 (1992)

8 Solutions Improve the quality of care reduce actual medical errors that trigger meritorious claims Improve communication reduce the frequency of non-meritorious claims by avoiding the incorrect perception of error, and facilitate the prompt resolution of meritorious claims

9 Solutions To improve quality of care, essential to-- admit mistakes fix underlying problems to prevent recurrence accept responsibility by offering fair compensation Disclosure and offer approach yields a full appreciation of consequences of error and creates powerful incentives to improve care For discussion of U. of Mich. approach, see Kachalia et al., 153 Annals of Int. Med. 213

10 Solutions Improved communication requires more transparency and honesty more information more empathy After an adverse event without error, support and talk with patient, answer questions, and yes, apologize After medical error causes harm, disclose, apologize, and offer compensation Better communication before adverse event occurs

11 Fear Barriers to Admitting Mistake Legal fear of surrendering self to liability system viewed as punitive, cut-throat, and potentially humiliating Cultural fear of loss of stature, credibility, and respect among peers Personal fear of discipline, loss of license or job Money Many insurers would rather not pay; those who recognize moral obligation fear extortion by attorney who demands unreasonable compensation

12 Barriers to Sharing Information Even in context of adverse event without error, fear prevails Fear that detailed description of underlying events will be twisted and used as evidence in court Fear that expression of sympathy will be used in court as admission of fault (thus, so-called Apology Laws ) Over-riding fear of doing or saying anything that could increase risk of immersion in unpredictable and irrational liability system where outcomes are unrelated to quality of care

13 Sources of Fear Second-hand information Runaway verdicts rare but shocking events that gather much attention and undermine confidence in juries Horror stories of colleagues If colleague lost at trial, invariably this was an unjust verdict caused by jury s sympathy for plaintiff If colleague prevailed, the journey to vindication was personally devastating One bad outcome goes a long way -- overshadows multiple defense verdicts

14 Sources of Fear First-hand experience Unjustly sued, case eventually dismissed, but nonetheless a painful experience Case proceeded to trial, and regardless of outcome, trial perceived as a mercenary game in which the quality of care took a back seat to trial tactics and emotions For excellent discussion of malpractice litigation as dread risk, see Carrier et al., 29 Health Affairs 1585 (2010)

15 Malpractice Trials Fear and skepticism is justified Trial tactics focus on winning, not ensuring an objective assessment of quality of care Jury focus groups seek to identify themes and messages that will resonate with jury Jury selection process intended to identify jurors with preexisting biases that favor one side Neither side is interested in balanced presentation of evidence Loss of control is terrifying Substantial portion of trial focused on injury, hardship, and financial loss to plaintiff

16 Audience Response This was about an American family overcoming an injustice to come out on top. 1. Critic s review of made for TV movie 2. Juror interviewed after delivering $74 million verdict in malpractice case

17 Audience Response If you were sued for malpractice, would you rather have your case decided by: 1. Jury 2. Judge

18 Judge or Jury Percent of malpractice trials decided in favor of defendant By jury: 74% By judge: 50% Tort Trials and Verdicts in Large Counties, 2001, Bur. of Justice Statistics

19 Audience Response If you were sued for malpractice, would you rather have your case decided by: 1. Jury 2. Judge

20 Solutions Reduce fear and promote confidence in liability system by Reducing frequency of runaway verdicts Remove emotion and sympathy from assessment of quality of care Promote earlier resolution of claims Reduce frequency of trials

21 Schedule of Non-Economic Damages Compensation for pain and suffering, disability, loss of family member Currently determined case-by-case without any guidance or framework Similar injuries receive widely discrepant awards, some too low and some runaway Awards dependent on make-up of jury, skill of attorneys, or likeability of parties Runaway verdict not problem in case itself remittitur negative impact from reverberation symptom of flawed system

22 Schedule of Non-Economic Damages Fixed but flexible schedule with multiple tiers based on severity of injury Each tier to include a range of compensation Jury determines which tier and chooses dollar amount within that tier Difficult to create and will not be perfect, but precedent exists in other settings such as worker s compensation

23 Schedule of Non-Economic Damages Benefits Reduction of runaway verdicts Similar injuries will receive similar compensation Narrower range of potential outcomes will facilitate settlements Predictability and decreased fear will promote greater transparency by providers

24 Bifurcation of Liability and Damages Standard approach: trial includes evidence of quality of care and plaintiff s injuries and expenses Inefficient approach as damages are relevant only if jury determines defendant is liable Jury finds liability in ~25% of medical malpractice trials. Civil Bench and Jury Trials, 2005, Bur. Justice Statistics In 75% of cases, damages evidence presented unnecessarily Contributes to perception of unfairness, and is unfair in fact, since impossible for jury to avoid influence of sympathy

25 Bifurcation of Liability and Damages Benefits More efficient will shorten 75% of trials More objective threshold determination of quality of care decided with minimal influence of sympathy More difficult to dismiss/marginalize plaintiff verdicts as driven by sympathy

26 Mandatory Mediation Over 50% of claims are resolved by settlement Settlement amounts generally correlate with merits of case. See Studdert et al., 354 NEJM 2024 (2006). Problem: settlements occur late in game, after parties have paid high financial and personal costs Implement mandatory early mediation Two stages: (1) after preliminary disclosure of expert reports, (2) if unresolved, after limited discovery Similar model successful in New York (specially trained judge as mediator)

27 Offer of Judgment Rule Deters brinksmanship in settlement negotiations After each mediation, each side required to make best offer/demand If reasonable defense offer declined and plaintiff fails to do 25% better at trial, plaintiff responsible for defendant s reasonable attorney s fees If defense declines reasonable demand and loses at trial, responsible for plaintiff s reasonable attorney s fees Trial judge determines reasonableness of offer/demand

28 State-Wide Closed-Claims Database For all settlements and verdicts for plaintiffs, require insurers to complete detailed, standardized forms for submission to centralized closed-claims database Information is confidential and de-identified, accessible to State-designated health care officials State may request underlying records and provide access to approved quality researchers.

29 In Summary Reduce fear and enhance provider confidence in liability system in order to promote quality improvement efforts increase accountability for medical errors, and reduce frequency of non-meritorious claims Preserve option of jury trial but reduce need for same by encouraging more and earlier settlements Reduce influence of sympathy at trial and equalize noneconomic damages awards Create large centralized database for quality research

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