Tort Debate Must Broaden to Address Health Safety

Patients have heard a great deal about doctors being driven out of practice because of skyrocketing malpractice premiums.

Leaders in the insurance and health care fields say – in tones that sound at times like a threat – that one day we will all wake up to find doctors no longer exist.

It is undeniable that premiums have been escalating – the January 8, 2004, figures from the Congressional Budget Office revealed an average 15 percent hike between 2000 and 2002 – but the reasons for those hikes are in dispute.

Whether you blame the management and poor investment return by insurance companies, cycles in the insurance market that include increases tied to catastrophic events like hurricanes and terrorist attacks, or jury verdicts paid to victims of medical malpractice, one thing is certain: Improving the health care system itself often is ignored in the din.

A thoughtful article appeared in the January 6 issue of the Annals f Internal Medicine, Written by Dr. Stephen C. Schoenbaum and Randall R. Bovbjerg, a lawyer, the opinion column offered a rare insight into what really is needed in the health care system in this country, along with some realistic solutions that require a second look.

Unlike the screaming headlines of news magazines and editorials, this article, "Malpractice Reform Must Include Steps to Prevent Medical Injury," offers a compromise in an area that often appears to be black-and-white.

Capping damages and other "tort deform" measures don’t get to the real heart of the issue: improving the delivery of health care to millions of Americans. The time has come to broaden the debate to address all of the factors that come into pay.

Doctors see that no matter how careful they are, their premiums still escalate. Schoenbaum and Bovbjerg recognize that these are the physicians who must find, develop and implement safety improvements.

The authors point out how it worked for anesthesiologists, who collectively reduced patient harm in the mid-1980's by adopting practice guidelines. Not only did patient deaths significantly drop, so did their malpractice premiums: These doctors pay about $18,000 annually, about the same rate as in 1985.

The authors astutely point out that if safety is improved, patients will adopt a new mindset that all medical errors do not necessarily mean negligence occurred.

Judicial efforts to make this happen are already in place in many states including Illinois, which requires a doctor to certify that malpractice or a deviation from the standard of care occurred before a lawsuit can be filed.

Of course, that does not address the issue of improving a massive organizational structure involving hospitals, doctors, nurses, pharmaceutical companies and countless others providing health care.

Schoenbaum and Bovbjerg suggest the carrot-and-stick approach: seminars to improve office practices, patient communications and tracking test results and procedures. If these efforts are made, the "carrot" could be discounts on insurance premiums.

I, for one, have never understood why insurers cannot operate the medical malpractice field like the auto insurance industry. Good doctors, like good drivers, should receive credit for their appropriate behavior.

Such changes could be far more effective in lowering premium costs than legislative reform of the civil justice system. The CBO notes that "malpractice costs account for less than 2 percent of [health care] spending." CBO researchers found that about 15 malpractice claims are filed each year for every 100 physicians, and about 30 percent of those claims result in an insurance payment.

The CBO report goes on to say that restricting malpractice liability does not affect economic efficiency; instead, it may "modify the distribution of gains and losses to individuals and groups but do[es] not create benefits or costs for society as a whole."

The CBO found that a ban on punitive damages in medical malpractice cases – something already in effect in Illinois – and a cap on damages would translate into lowering health care costs only about one half of one percent.

It has been demonstrated over and over again that capping damages does not reduce malpractice premiums. Take Colorado, for example. Despite its unusually strict damages cap of $750,000 for economic damages and $250,000 for pain and suffering, that state’s largest insurer reportedly raised premiums 14 percent in 2003, the largest jump in 15 years.

As the authors of the Annal of Internal Medicine piece wrote, "Simply capping awards applies a Band-Aid to the increases in premiums now bleeding many physicians, while leaving patient wounds unattended."

What has largely gone unnoticed is payment practice reform by insurance companies. With their investment yields lower in the past few years, company executives look to premiums to make up the difference.

We also must re-examine the insurance industry’s exemption from antitrust status, making it the only business to enjoy this privilege other than baseball franchises.

This look at insurance practices – coupled with tighter regulation of doctors, particularly those who are repeatedly negligent – should be the policymakers’ focus.

If patients see that the delivery of health care is becoming safer, it will defuse the anger of those hurt and achieve what all Americans desperately want: the best and the brightest working efficiently in a complex field, where no less than a person’s life is often at stake.