Resident/Student Issues: Professional Liability Crisis

A Case for Medical Liability Reform

Derek Johnson
Arizona College of Osteopathic Medicine
Class of 2006

Before entering medical school I had no idea the severity of the liability crisis that exists in our country. I had underestimated the huge threat looming over my future profession. As I researched the subject, I found that most of my fellow students were just as uninformed as I was. My goal with this article is twofold: make medical liability reform easier to understand, and motivate readers to take necessary action to protect the practice of medicine and the patients who suffer.

Ambur Peterson, who lives in rural Cleveland, Mississippi, was three weeks away from her due date when her family physician stopped delivering babies. Her doctor's malpractice insurance premiums had increased so dramatically it forced him to cut the service of obstetrics from his practice - a service which had been vital to the community. As a result Ambur was forced to drive out of state, over a hundred miles, to Memphis, Tennessee, in order to get the care she needed.¹ Today, most of the cities with populations under 20,000 in Mississippi no longer have doctors who deliver babies.²

American health care has long been the envy of the world, but our heath care system is in crisis. Skyrocketing malpractice insurance premiums are requiring many doctors to narrow their scope of practice, leave states known for high malpractice rewards, or even retire altogether. Some emergency departments and trauma centers have been forced to close their doors. In addition, many patients can no longer afford the ever-increasing cost of health insurance, joining the growing pool of uninsured Americans. As a result, patients are losing access to local and affordable health care.

According to the U.S. Department of Health and Human Services, a critical element in helping Americans get access to better and more affordable health care is curbing excessive litigation.³ This can be accomplished with federal medical liability reform.

What is Medical Liability Reform?

Medical liability reform refers to legislation designed to control the cost of malpractice insurance for physicians and increase access to health care for the general public. Several strategies for taming the malpractice crisis have been addressed, such as limiting attorney fees, filtering out frivolous lawsuits, establishing statutes of limitations, and holding physicians accountable only for that portion of the lawsuit for which they are responsible. However the most widely discussed strategy is limiting the amount of money a plaintiff can collect for non-economic damages. A cap on non-economic awards would not prevent injured patients from recovering lost wages, future lost wages, health care costs, and support for services the injured patient can no longer perform such as child care.⁴ It would only place limits on the entirely subjective "pain and suffering" awards, which currently average over $1 million per settlement. Nationwide, 25% of today's non-economic awards exceed $3.5 million.⁵ Non-economic awards in states without caps have reached as high as $6 million (Nevada), $13 million (Kentucky), $23 million (North Carolina), and $100 million (Mississippi, Pennsylvania).⁶ Bear in mind that these awards are in addition to the millions awarded per case for economic loss -- hospital bills, lost wages, etc. Furthermore, in lawsuits where the physician was found not guilty, defense costs averaged $91,803. And in cases where the claim was dropped or dismissed, costs to defendants averaged $16,160.⁷

How does the malpractice crisis affect patients?

The outrageous numbers stated above cause physicians' malpractice premiums to increase dramatically, but doctors aren't the only ones suffering. The costs of these lofty awards are paid by all Americans through higher premiums for health insurance, higher out-of-pocket payments when they obtain care, and higher taxes to support government-funded health care programs. The system permits a few plaintiffs and their lawyers to impose what is in effect a tax on the rest of the country to reward a very small number of patients who happen to win the litigation lottery.⁸ As malpractice insurance premiums continue to rise, patients will continue to see their health insurance premiums increase. More and more Americans will join the ranks of the uninsured. Physicians and patients will continue to suffer until federal medical liability reform is implemented.

One of the most dramatic examples of how patients are affected by rising malpractice costs comes from Nevada, a state which lacks a firm cap on non-economic damages. Las Vegas is facing unprecedented problems in assuring quick access to urgently needed care. The University of Nevada trauma center, which treats over 11,000 patients annually, closed its doors for ten days in July 2002. Its surgeons had quit because they could no longer afford their malpractice premiums, some of which topped $200,000 annually.⁹ During the closure, Jim Lawson was critically injured in a traffic accident. Unable to seek care at the University trauma center, he was taken to a community hospital which lacked the resources necessary to save his life. Jim died while physicians tried to stabilize him for airlift to the next nearest trauma center in Salt Lake City.¹⁰

How are physicians handling the financial burden?

Narrowing their scope of practice. Similar to Ambur Peterson's story above, family physicians around the country are cutting obstetrics from their practices and referring simple procedures to costly specialists. They simply cannot make enough money to compensate for the added insurance costs of providing the extra care.

Leaving states which have not yet placed caps on non-economic damages. Dr. Frank Jordan, a vascular surgeon in Las Vegas, left his practice and fled the state of Nevada. "If I were to stay in business for three years, it would cost me $1.2 million for insurance. I obviously can't afford that. I'd be bankrupt after the first year, and I'd just be working for the insurance company. What's the point?"¹¹

Retiring earlier that anticipated. Dr. James Wilkerson, a urologist in Akron, Ohio, saw his malpractice premiums triple in 2001. He decided to retire. Had Dr. Wilkerson continued to practice, he would have spent seven months of his yearly income to cover the $84,000 premium. "I would have had to go back to working 90 hours a week and I didn't want to do that."¹²

Other physicians have experimented with creative ways to battle rising malpractice insurance costs, such as charging a voluntary annual insurance fee to patients. Clearly the situation is out of control.

How does the malpractice crisis affect emergency medicine?

There is an epidemic of emergency department closures across the country. In Los Angeles, the closure of six emergency departments over the last 18 months has increased the time required for paramedics to bring patients to hospitals. In addition, the remaining EDs are swamped with increased patient visits, and the medical units are overwhelmed with increased admits. Two more emergency centers are currently scheduled to close, leaving 75 EDs in Los Angeles County, down from 94 in 1994.¹³

The trauma unit at Martin Luther King Jr. / Drew Medical Center is also scheduled to close indefinitely in December 2004. It serves as a major center for treatment of car accident and gunshot wound victims in Los Angeles, handling 2,150 trauma cases in 2003. Dr. Mauricio Heilbron Jr., a trauma surgeon at nearby St. Mary Medical Center, states "if something like September 11 happens (in Los Angeles), we are now 50 percent less equipped than we were five years ago…The problem is now, we have less and less hospitals taking care of more and more patients and it's going to crack bad. It's going to be bedlam…It's sad, but somebody's just going to have to die before people put their hands up and say, 'how did it get so bad?'"¹⁴

Certainly the cause of these closures is multifactorial. However, the contribution of a broken liability system cannot be denied, especially in an environment where the costly practice of defensive medicine is so prevalent.

How does the malpractice crisis affect residents?

In a recent survey of medical residents 62% reported that liability issues were their top concern. These growing concerns about liability issues may cause residents to avoid choosing high-risk specialties or practicing in a crisis state.¹⁵

Some medical residents report the current medical liability system also works against physicians trying to practice evidence-based medicine (EBM). One recent example is from a resident who, despite utilizing the best practices of EBM, watched in horror as he was sued and the plaintiff's attorney portrayed EBM as nothing more than a "cost-saving method," and said "the few lives saved were not worth the money." Thus, despite the resident showing how he followed "conscientious, explicit, and judicious use of the current best evidence in making clinical decisions about the care of individual patients," the plaintiff's attorney used it against him. The resident was exonerated, but the residency program was found liable for $1 million.¹⁶

How does the malpractice crisis affect medical students?

A recent AMA survey exposed the concern medical students have about pursuing careers in high-risk specialties (emergency medicine, OB/GYN, general surgery, orthopedic surgery, neurosurgery, and thoracic surgery) which can require malpractice premiums in excess of $200,000 annually. Half of students in their third or fourth year of medical school indicated the liability situation was a factor in their specialty choice. 61% of students reported they are extremely concerned the current medical liability environment is decreasing physicians' ability to provide quality medical care.¹⁷

How does the malpractice crisis contribute to the practice of defensive medicine?

As the threat of litigation increases, many physicians admit to practicing an overly-conservative style of medicine - defensive medicine - to avoid being sued. One survey revealed that an overwhelming majority of doctors order more tests than are clinically indicated. More than half have recommended invasive procedures such as biopsies to confirm diagnoses more often than they believed was medically necessary. 41% of physicians said that they had prescribed more medications, such as antibiotics, than they would based only on their professional judgment, and 73% have noticed other doctors similarly prescribing excessive medications.¹⁸ The practice of defensive medicine not only increases the cost of health care, it also exposes patients to increased risk, as every test and treatment has possible complications.

How can I be sure that medical liability reform is the answer?

America's malpractice crisis is less acute in states that have imposed caps on non-economic awards. States with caps of $250,000 saw an average malpractice premium increase of 14% from 2000-2001, while states without caps saw a combined average premium increase of 44% over the same time period. Physicians in states with meaningful caps have significantly lower malpractice insurance rates than physicians in states without caps.¹⁹ Every dollar saved from malpractice premiums decreases the cost of health care to patients, and decreases the practice of defensive medicine. Lower malpractice premiums keep doctors where they want to practice, providing the services they wish to provide to patients that need it. Implementing a federal cap on non-economic awards is imperative in controlling the cost of malpractice insurance and, consequently, controlling the cost and quality of health care for all Americans.

How can I get involved?

In 2004 Washington came closer than ever before to passing meaningful federal medical liability reform. In May 2004, the U.S. House of Representatives passed H.R. 4280, the HEALTH Act of 2004 (Help Efficient Accessible, Low-Cost, Timely Health Care). Unfortunately the bill did not gain enough votes in the Senate to pass. Urge your senators to support medical liability reform! Your voice counts now more than ever before.

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How can I learn more?

American Medical Association: www.ama-assn.org/ama/pub/category/7861.html
D.O. Advocacy Action Center: http://capwiz.com/aoa-aoia/home
Every Patient Counts: www.everypatientcounts.org
Dept. of Health & Human Services report: http://aspe.hhs.gov/daltcp/reports/litrefm.htm
AAEM Washington Watch: http://www.aaem.org/washingtonwatch/

¹ Associated Press, "Exodus of doctors causing crisis for moms-to-be in Mississippi," July 11, 2002.
² Los Angeles Times, "Mississippi Doctors Give up Obstetrics," Nov. 19, 2001.
³ U.S. Dept. of Health and Human Services, "Confronting the New Health Care Crisis: Improving Health Care Quality and Lowering Costs By Fixing Our Medical Liability System" July 24, 2002.
⁴ American Medical Association, "Medical Liability Reform - NOW!" June 14, 2004
⁵ Jury Verdict Research, Current Award Trends in Personal Injury: 43rd ed. (2004), 18.
⁶ U.S. Dept. of Health and Human Services, "Confronting the New Health Care Crisis: Improving Health Care Quality and Lowering Costs By Fixing Our Medical Liability System" July 24, 2002.
⁷ Lori A. Bartholomew of PIAA, "Remarks to the Am. Coll. Of Radiology," May 13, 2003.
⁸ U.S. Dept. of Health and Human Services, "Confronting the New Health Care Crisis: Improving Health Care Quality and Lowering Costs By Fixing Our Medical Liability System" July 24, 2002.
⁹ Washington Post, July 4, 2002.
¹⁰ PR Newswire, April 21, 2003.
¹¹ Los Angeles Times, March 4, 2002.
¹² Akron Beacon Journal, January 2002.
¹³ California Healthline, Nov. 2, 2004. www.californiahealthline.org
¹⁴ Long Beach Press Telegram, Sept. 21, 2004.
¹⁵ Meritt, Hawkins & Assoc., Summary Report: 2003 Survey of Final Year Med. Residents 5 (2003).
¹⁶ Daniel Merinstein, "Winners and Losers," 291 JAMA 15, 15-6 (2004). As summarized by U.S. Dept. of Health and Human Services, "Confronting the New Health Care Crisis: Improving Health Care Quality and Lowering Costs By Fixing Our Medical Liability System" July 24, 2002.
¹⁷ Div. of Mkt. Research & Analysis, AMA Survey: "Med. Students' Opinions of the Current Med. Liability Env't" (2003).
¹⁸ "Fear of Litigation Study," conducted by Harris Interactive, Final Report, April 11, 2002.
¹⁹ Medical Liability Monitor, Vol. 26, No.10, October, 2001: Shook, Hardy, Bacon, L.L.P., October 9, 2001.