The cure for what ails: a realistic remedy for the medical malpractice 'crisis'.

• Author: Williams, Alan G.

INTRODUCTION

Doctors hate lawyers. (1) Whether previously subjected to a medical malpractice lawsuit or simply apprehensive that a claim may someday be filed, physicians blame lawyers for what they view as a medical liability system run amok. (2) Physicians believe they should be immune from medical malpractice lawsuits, that only specialized health courts should hear medical malpractice cases, that a no-fault compensation system should be established for all medical malpractice claims, that a higher standard of proof should be required in medical malpractice trials, or, at a minimum, that damages caps should severely restrict the amount plaintiffs may recover in medical malpractice cases that proceed to verdict. (3) Physicians complain of a medical malpractice "crisis" infecting America, causing physicians to retire early, relocate their practices, change practice specialties, accept fewer high-risk patients, or practice "defensive medicine" in an effort to fend off possible malpractice lawsuits. (4)

Physicians, along with healthcare industry representatives, proponents of tort reform, and conservative lawmakers, allege America's medical malpractice crisis fuels exorbitant malpractice insurance premiums, causes younger physicians to migrate away from high-risk specialties, and adds to the sharp escalation of healthcare costs, all resulting from medical malpractice lawsuits flooding the civil justice system. (5) These groups view the likelihood of being sued as simply a random event wholly unrelated to the quality of medical care rendered. (6) They rail against the tort system, pleading for an end to a perceived medical malpractice crisis they view as destroying both the healthcare profession and the delivery of quality medical care. (7)

Conversely, the plaintiffs' bar, patient advocacy groups, and liberal lawmakers claim the problem is not too much litigation, but rather, that America suffers from an unacceptable level of negligent medical care plaguing our healthcare system. They cite studies and statistics in arguing that medical negligence causes as many as 98,000 deaths each year, that hospitals are dens of infection, disease, and substandard medical care, and that all medical malpractice litigation costs combined only amount to 2% of total U.S. healthcare spending. (8) Plaintiffs' lawyers and patient advocacy groups complain that states are unconstitutionally restricting access to the courts by enacting legal hurdles to commencing medical malpractice claims and by capping damages, both economic and non-economic. The plaintiffs' bar loathes evidentiary rules that prohibit the use at trial of otherwise damning admissions offered by a physician subsequent to an adverse medical incident. Plaintiffs--patients--are being squeezed out of a system designed to offer them redress, say plaintiffs' lawyers, relying on studies estimating that each year three times as many Americans die from preventable medical errors as die in automobile accidents. (9)

Who is right? If there is a disease, what exactly is it, and what is the remedy? Countless academicians and policymakers have weighed in on the issue, opining fixes that simply have not gained enough traction for implementation or even testing. (10) State legislatures have applied band-aids, but nothing has come close to remedying the problem. (11) The answer resides in what the "problem" truly is. Identify that, and the solution becomes clear. This Article defines the actual problem afflicting the current medical liability system and explains why previously-suggested fixes have not and/or will not work. Then, this Article breaks new ground by proposing a realistic remedy for the real world of medical malpractice claims, as opposed to previous recommendations that have failed to consider either the political aspects of the issue or the necessity of physician "buy-in" regarding any proposed reform. As the Patient Protection and Affordable Care Act (12) (PPACA) currently awaits its ultimate fate--although upheld by the Supreme Court of the United States, many politicians still call for its repeal--now is the perfect time to propose a realistic federal remedy to standardize medical malpractice claims nationwide. (13)

Part I of this Article provides a brief history of the medical malpractice "crisis" and the current landscape of medical negligence from the various parties' perspectives. Part II explains the political aspects surrounding the problem. Part III reviews states' attempts to address medical malpractice through conventional tort reform and alternative legal systems. Part IV describes efforts by medical institutions to approach medical malpractice via a reduction of medical errors strategy. Part V summarizes non-traditional approaches to the issue of liability for medical errors. And, finally, Part VI proposes a comprehensive solution that, if implemented nationally, may fully address the competing challenges of medical malpractice liability.

1. MEDICAL MALPRACTICE, HISTORICALLY

   1. The "'Crisis"

      The concept of America facing a medical malpractice crisis is not new. (14) Between the 1950s and 1980s, medical malpractice filings increased by 1000%. (15) During that time, the dollar amounts awarded by juries to medical malpractice plaintiffs rose by more than 275%. (16) Medical malpractice insurance premiums rose in response to these increases, driving some physicians to retire, change practice areas to a less risky specialty, or refuse to accept high-risk patients. (17) In response, many states enacted tort reform legislation in an effort to curb the number of lawsuits and/or decrease the amounts awarded by juries, (18) and to reduce what were perceived to be exorbitant medical malpractice insurance premiums. (19) Medical malpractice reforms enacted from the mid-1970s to the mid-1980s, however, resulted in neither a decrease in claims filed nor a decrease in the rates charged for medical malpractice insurance premiums. In fact, malpractice premiums actually rose--the law of unintended consequences. (20) These legislative changes resulted in an extended time period between the adverse medical incident and resolution of the claim, approximately four and a half years. (21) Other analysts have concluded the insurance time lag in medical malpractice claims may be as much as nine years. (22) This time lag resulted in insurance companies being forced to utilize premiums paid in later years to pay claims incurred in earlier years because the insurance model was unable to account for such a time lag. (23) Therefore, insurance companies incurred losses they did not expect and consequently increased premiums, both to make up the difference and to show a profit to investors. (24)

      During the late 1980s and early 1990s, approximately 70% of medical malpractice claims resolved with no payment made, so new insurance companies entered the market and began competing for the now-lucrative business of medical malpractice insurance by offering low premiums. (25) The cycle then began-insurance companies faced greater competition and reduced premiums to gain more market share, resulting in their failure to collect sufficient premiums to cover losses and, in subsequent years, raising premiums to cover claims paid for negligent medical care occurring years earlier. (26) During this roller-coaster cycle of premium increases and decreases, insurance companies experienced a sharp decline in their investment returns, further compounding the problem. Physician advocacy groups claimed that individual physicians paid the price--through increased medical malpractice insurance premiums and excess judgments--for failures not entirely of their own creation. (27) Now, many reflect back to view the 1990s not as a medical malpractice crisis, but rather as an insurance company accounting and investment crisis resulting in damage to the healthcare profession. (28) Even today, medical malpractice insurance companies continue to price premiums based almost solely on a physician's specialty and geographic location, resulting in small yet volatile risk pools vulnerable to huge premium spikes subsequent to a handful of large payouts in a particular location or practice specialty. (29) Unlike automobile insurance premiums--which increase when drivers cause or are involved in an accident--medical malpractice insurance premiums are rarely based on a physician's professional medical record. (30)

      In the mid-2000s, with a Republican Congress and George W. Bush in the White House, there was a strong push to enact tort reform on a national level. Arguing that frivolous medical malpractice claims were contributing to the rise in healthcare costs, (31) President Bush himself proposed a $250,000 cap on non-economic damages in medical malpractice lawsuits, as well as to reduce the statute of limitations in such cases and to allow judges to review the contingency fee agreements of plaintiffs' lawyers. (32) Such recommendations were in response to a spike in medical malpractice insurance premiums beginning in 2001. The premium increases were due to a combination of factors unrelated to the number of medical malpractice claims filed or the amount of jury awards. (33) Subsequent to 2008, with a change in congressional composition and a different party controlling the White House, the din of the call for medical malpractice reform has quelled but not abated. (34) Physicians are still angry and conservative legislators are still aggressive in their trumpeting that America's healthcare costs could be contained by curbing frivolous medical malpractice lawsuits. But is America experiencing a crisis and, if so, of what type?

   2. Negligent Medical Care

      A medical error is "the failure of a planned action to be completed as intended (i.e., error of execution) or the use of a wrong plan to achieve an aim (i.e., error of planning)." (35) A much cited report conducted by the Institute of Medicine concluded that as many as...