Did Medical Litigation Against Physicians Increase Hospital Inpatient Costs

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1 Did Medical Litigation Against Physicians Increase Hospital Inpatient Costs Zeynal Karaca, Ph.D. Social & Scientific Systems, Inc. Herbert S. Wong, Ph.D. Agency for Healthcare Research and Quality

2 Motivation?

3 Background A report in 1994 by the Office of Technology Assessment on medical malpractice and the practice of defensive medicine highlights that, For more than two decades many physicians, researchers, and government officials have claimed that the most damaging and costly result of the medical malpractice system as it has evolved in the United States is the practice of defensive medicine: the ordering of tests, procedures, and visits, or avoidance of certain procedures for patients because of concern about malpractice liability risk.

and costly result of the medical malpractice system as it has evolved in the United States is the practice of defensive medicine: the

4 Background (continued) Fear of liability may generate inefficiencies much larger than the costs of compensating malpractice claimants Physicians may administer treatments that do not have meaningful medical benefits About 28 states have laws that limit payments in malpractice cases, and several studies indicate that these laws reduce the frequency and severity of malpractice claims and lower premiums

medical benefits About 28 states have laws that limit payments in malpractice cases, and several

5 Research Objectives We aim to empirically investigate medical litigations against physicians to estimate its impact on cost of inpatient hospital visits to estimate its spillover affects on other colleagues

6 Data 2008 HCUP Florida State Inpatient Databases (SID). Comprehensive hospital data for 2.5 million inpatient visits. Florida Department of Health Physician Licensure Database. Physician characteristic (e.g., medical litigation, specialty, year of graduation, the name of the medical school ) 2008 American Hospital Association (AHA) Area Resource Files (ARF). We successfully linked about 2.1 million of hospital visits to physician licensure databases and AHA hospital survey data. Physicians license numbers

, medical litigation, specialty, year of graduation, the name of the medical school ) 2008 American Hospital Association (AHA).

7 Analytic Approach We employed several multilevel models that allow us to cluster hospital inpatient visits by physician, and therefore reduce statistical uncertainty due to sampling and systematic variation by clustering patients across physicians to incorporate both patientlevel and physician-level characteristics. Our key covariate of interest was the litigation dummy variable with the value of one for the physicians involved with at least one medical litigation, zero for physicians with no medical litigation history. We estimated the spillover effects of medical litigation on hospital inpatient costs per visits registered to other physicians of the same specialties practicing within the same hospitals using the generalized linear models and multilevel models.

Our key covariate of interest was the litigation dummy variable with the value of one for the physicians involved with at least one medical litigation, zero for physicians with no medical

8 Descriptive Results $10,000 Average cost of hospital inpatient stays by physicians' litigation history and gender $9,000 $8,000 $7,000 $6,000 Litigation history Female Male No litigation history

9 Descriptive Results 11,000 Average cost of hospital inpatient stays by physicians' litigation history and medical school training 10,000 9,000 8,000 7,000 6,000 Litigation history Foreign-trained No litigation history U.S.-trained

medical school training 10,000 9,000 8,000 7,000 6,000

10 Risk-Adjusted Results Estimated effects of physician characteristics on log costs of hospital inpatient stays Generalized Linear Multilevel Regression Model Regression Model Medical litigation (0/1) 0.036*** 0.032*** Selected Physician characteristics Experience (in years) *** *** Female *** *** Foreign-trained *** *** Board certified specialties Family medicine / *** *** General practitioners Cardiology 0.473*** 0.449*** Pediatrics *** *** Surgery 0.743*** 0.802***

032*** Selected Physician characteristics Experience (in years) -0.001*** -0.001*** Female -0.059*** -0.121*** Foreign-trained -0.

11 Risk-Adjusted Results Spillover effects of medical litigation on log costs of hospital inpatient stays registered to physicians with no medical litigation history Dependant variable: Medical litigation (0/1) Generalized Linear Regression Model Multilevel Regression Model Family medicine / General practitioners 0.061** 0.051*** Cardiology 0.140*** 0.116*** Obstetrics and Gynecology ** ** Pediatrics 0.331*** 0.012* Surgery 0.191** 0.027

Generalized Linear Regression Model Multilevel Regression Model Family medicine / General practitioners 0.

12 Summary The average costs of hospital inpatient stays registered to physicians with medical history is higher by at least 3% when compared to the average costs of hospital inpatient stays registered to physicians with no medical history. There is substantial variation in spillover effect of medical litigation on costs of hospital inpatient stays registered physicians with no medical litigation history across board certified specialties where, family medicine / general practitioners, cardiologists, pediatricians and surgeons are generally associated with higher costs of hospital inpatient stays; and, obstetrics and gynecologists are generally associated with lower costs of hospital inpatient stays.

There is substantial variation in spillover effect of medical litigation on costs of hospital inpatient stays registered physicians with no medical litigation history across

1 SB402 2 167259-1. 3 By Senator Dial. 4 RFD: Finance and Taxation Education. 5 First Read: 21-APR-15. Page 0

1 SB402 2 167259-1. 3 By Senator Dial. 4 RFD: Finance and Taxation Education. 5 First Read: 21-APR-15. Page 0 1 SB402 2 167259-1 3 By Senator Dial 4 RFD: Finance and Taxation Education 5 First Read: 21-APR-15 Page 0 1 167259-1:n:04/07/2015:PMG/mfc LRS2015-1475 2 3 4 5 6 7 8 SYNOPSIS: Under existing law, there