"Sorry" Is Never Enough: How State Apology Laws Fail to Reduce Medical Malpractice Liability Risk.

• Author: McMichael, Benjamin J.
• Position: Correction notice

Table of Contents Introduction I. Apology Laws: Justification, Form, and Function A. Why "Sorry"? Why Apology Laws? B. Apology Laws: Form, Function, and Location C. Just Another Tort Reform?: Competing Theories of Apology Laws II. Litigation Data A. Malpractice Insurer Data: The Gold Standard B. Suing Physicians III. Empirical Analysis A. Testing the Competing Theories B. Empirical Methodology C. Results and Discussion 1. The effect of apology laws on claim probabilities 2. The effect of apology laws on malpractice payments IV. Policy Implications A. The State of the Evidence on Apology Laws B. Why Are Apology Laws Not Enough? C. A Path Forward Conclusion Appendix A Appendix B Appendix C Introduction

"Sorry" is a ubiquitous part of everyday life. An apology may follow a bump in the hallway, a forgotten document, tardiness, or any of hundreds of other trivial transgressions. Despite the prevalence of apologies, however, they have historically been largely absent from disputes severe enough to necessitate involving the legal system. Defense attorneys, fearing that an apology may be used at trial as evidence of liability, often counsel their clients to avoid apologizing. (1) But according to psychological and legal research, this dearth of apologies has negative consequences for both plaintiffs and defendants. For plaintiffs, apologies have the power to restore dignity, assuage anger, and heal humiliations following a transgression by the defendant, and these benefits can be particularly important following an injury severe enough to generate a lawsuit. (2) Defendants, too, may benefit from apologies, as some evidence suggests that following an apology, injured parties may be more likely to accept lower settlement offers and to resolve disputes quickly. (3)

While plaintiffs clearly benefit from apologies, defendants face something of a paradox. On one hand, apologizing may place them at an increased risk of liability, (4) as the apology itself may be evidence of fault and bolster plaintiffs' resolve to pursue claims. On the other hand, apologizing may assuage the injured parties and either forestall any legal claim or, if a claim is filed, facilitate settlement. (5) Recognizing this conundrum, state lawmakers have taken action to facilitate more apologies by passing "apology laws." These laws reduce the risk of apologizing for defendants by making statements of apology, sympathy, and condolence inadmissible in any subsequent trial, (6) thereby encouraging defendants to apologize more often. Though apologies can generate benefits for both plaintiffs and defendants, state lawmakers have been very clear that in passing these laws, they seek "to reduce lawsuits and encourage settlements" (7) based on the "underlying theory ... that a settlement of a lawsuit is more likely if the defendant is free to express sympathy for the plaintiff's injuries without making a statement that would be admissible as an admission of a party opponent." (8)

Apology laws bear a striking resemblance to tort reforms. The status of apology laws as tort reforms has been the subject of some debate, but in function--if not in form (9)--these laws constitute a new generation of tort reform. Apology laws, like other, more familiar tort reforms, are designed to reduce litigation and decrease the pressure exerted on defendants by the threat of legal liability. Moreover, as in the case of other tort reforms, many apology laws are specifically limited to one area that has traditionally been the focus of efforts to reduce litigation--medical malpractice. (10) Indeed, Yonathan Arbel and Yotam Kaplan have recently concluded that "despite appearances, apology laws are de-facto tort reform." (11) Tracing the development of apology laws, Arbel and Kaplan explain that "tort reformers have ... co-opt[ed] the rhetoric and discourse on apologies and the law--independently developed by ethicists, dispute resolution specialists, and legal theorists," and have thereby "found a path into the hearts of legislators and the public." (12) Recent analyses of a variety of tort reforms have likewise included apology laws among the ranks of the more familiar reforms, such as caps on noneconomic damages. (13)

While apology laws represent a relatively recent revolution in the tort reform debate, they have gained acceptance in thirty-nine states to date (14)--outstripping many traditional reforms in popularity. (15) These laws have even received attention at the federal level: Then-Senators Barack Obama and Hillary Clinton introduced legislation that included a federal apology law. (16) As with the proposed federal law's state counterparts, the legislation was directed not at realizing the therapeutic benefits of apologies, but at reducing the perceived high levels of medical malpractice litigation. (17)

Despite the significant uptick of apology laws among states, the attention at the federal level, and the interest in apologies as a litigation reduction strategy, (18) relatively little evidence exists on whether apology laws actually accomplish their goal of reducing litigation. Indeed, in a recent report to the Medicare Payment Advisory Commission that detailed the state of the evidence on a variety of tort reforms, Michelle Mello and Allen Kachalia noted that "[v]ery limited evidence exists on the effect of apology laws on liability." (19) To date, we are aware of only two rigorous studies--both conducted by Benjamin Ho and Elaine Liu--that have examined the role of apology laws in litigation. (20) Because apology laws are overwhelmingly targeted at medical malpractice, these studies specifically examined medical malpractice litigation. (21) In general, they found somewhat mixed results for the effect of apology laws, with some evidence suggesting these laws work as intended by reducing the risk of medical malpractice liability, and other evidence suggesting that apology laws may actually increase this risk. (22) However, as Ho and Liu note, this evidence was derived from a publicly available dataset of malpractice claims that excludes relevant information on a number of claims, such as those with no payment. (23)

This Article provides new empirical evidence that substantially expands the current understanding of the impact of apology laws. This empirical evidence is derived from a dataset of physicians and malpractice claims obtained directly from a large national malpractice insurer, which includes information that publicly available datasets do not. Specifically, our dataset includes approximately 9096 of all physicians practicing within a particular specialty. (24) While we have the unprecedented ability to analyze nearly the universe of malpractice claims filed against an entire specialty over an eight-year period (2004 to 2011), due to confidentiality concerns we cannot identify either the specialty or the insurance company. (25) Focusing on a specific specialty enables us to hold constant the general range of medical conditions that are involved rather than using a sample of physicians with diverse specialties whose patients face quite different risks. (26)

Decomposing medical malpractice liability risk into the probability of claims and the magnitude of the loss associated with those claims, we find that apology laws do not achieve the goals laid out by state legislatures. In general, apology laws boost the probability that a physician who is not rated for surgery will be a party to a lawsuit to almost one and a half times the national average. Moreover, we find evidence that nonsurgeon physicians see their average malpractice payments increase as a result of apology laws. Because apology laws do not decrease the frequency of lawsuits or the average payment for surgeons, and increase both for nonsurgeons, they increase medical malpractice liability risk overall rather than reduce it.

At first glance, these results might seem surprising. In addition to being the opposite of the intended effect of these reforms, our findings are not consistent with case studies of physician apology and disclosure programs finding that these programs encourage physician-patient communication, reduce payments, and decrease the number of suits. (27) However, the success of particular programs may be influenced in part by where they are implemented--typically, academic medical centers--and by efforts that are undertaken in conjunction with apologies, so that the studies do not isolate the impact of apologies. (28) Our results are also not entirely consistent with the limited empirical evidence on apology laws. (29) But our results are derived from a dataset that provides substantially more detailed information on patients' claims and their outcomes than has been available in any previous study.

Based on our empirical analysis demonstrating that apology laws have not been successful in reducing medical malpractice liability, we make a series of recommendations to state legislatures and physicians who might contemplate using apologies. With respect to state legislatures, we argue that because apology laws fail to achieve their stated goals, legislatures should consider alternative means of reducing malpractice litigation (assuming they remain committed to this goal). As to physicians, we propose that individual providers should avoid apologizing unless an apology is undertaken as part of a specific apology and disclosure program.

The remainder of this Article proceeds as follows. Part I discusses states' justifications for passing apology laws and the mechanisms by which these laws are supposed to reduce malpractice litigation. Part II presents the unique dataset that we examine and provides an overview of the litigation context in which apology laws function. Part III provides an empirical investigation of the effect of apology laws on a variety of litigation outcomes, including the probability that physicians will face claims and the payments they must make to resolve...