Medical Malpractice Insurance Cap

One of the chief reasons for the perpetual increase in healthcare costs is the excess administration of unnecessary tests on a patient that has a condition where diagnosis should relatively straightforward. A point of argument has been made that the reason behind the number of unnecessary tests is that physicians are concerned about a misdiagnosis, which will later result in a malpractice suit against them. In response to this perceived concern, the Republican leadership and many of its disciples continue to propose the idea of limiting the monetary redress that an individual can receive as a result of a malpractice suit. By their reasoning such a malpractice award cap will significantly limit the zeal with which trial lawyers will pursue unnecessary malpractice lawsuits, thereby lowering both the probability that malpractice insurance will be adversely affected and physicians would have to pay higher rates based on improper diagnostic expectations, thus finally resulting in fewer tests being conducted lowering overall medical costs.

Lost in the sound bites of healthcare reform and tort reform is the question of how many medical malpractice suits are actually filed in a given year and what is the average financial weight of those suits? Approximately 85,000 malpractice suits are filed annually with financial redress ranging from 500,000 to 1,000,000 dollars.1 There is uncertainty about whether or not medical malpractice lawsuits have increased medical costs due to the size of the redress awarded.2,3 Finally in reference to the main point of ‘defensive’ medicine made by those supporting malpractice redress caps approximately 1/3 of all malpractice suits involve mistaken diagnosis leading to approximately 5-10% of the total costs of healthcare being attributable to ‘defensive’ medicine.4,5

The initial portion of the above premise makes sense; a portion of the escalating healthcare costs can be correlated to the administration of unnecessary tests to eliminate the feasibility that a certain patient may have contracted a very rare disease. Unfortunately the proposed solution is rather shortsighted, irresponsible and does nothing to neutralize the real cause of these excessive tests, but more on that later. The problem with placing a cap on monetary redress due to medical malpractice is that the legislation proposing the cap is universal, thus it would apply to all medical malpractice lawsuits even if the physician was completely and utterly negligent. For example if the physician happened to sever an individual’s vocal cords during a procedure resulting in the permanent loss of speech, a malpractice cap would only limit the patient to a pre-set value of redress. It is impractical and unfair to penalize an individual that has genuinely been mistreated by a physician solely to ward against the fear that less scrupulous lawsuits would result in inflated and unjustified monetary awards.

Instead a more appropriate and malleable solution, if one were really interested in limiting needless medical malpractice lawsuits, would be to evaluate the credibility of a malpractice suit before it could proceed to trial. In essence create an independent state or federal board that would review the merits of a medical malpractice suit and could either find evidence supporting the argument of the patient or find that a unique set of circumstances, not neglect, was responsible for the event that is triggering the suit. Basically this board would act as a grand jury of sorts for the civil division with regards to medical malpractice suits; they would either allow the case to proceed to trial or ‘no true bill’ the case, which would preclude the case from proceeding to trial without new evidence. Unlike the cap proposal, this method treats each situation as unique and judges on a case-by-case basis instead of classifying everything under the same umbrella.

One concern with the above idea is whether or not using such a review board as a proverbial ‘gatekeeper’ would be in violation of an individual’s 5th or 14th amendment right to due process (federal/state). If none of the participating parties on the board have any conflicts of interest with either insurance companies, hospitals or either litigate and the process is transparent in its procedure and ruling then it can be reasoned that due process is not violated. Another attribute favoring this review board is that past groups have occasionally challenged the constitutionality of the grand jury system and have failed in all instances. With regards to the statute of limitations associated with filing a medical malpractice suit, filing with the review board would constitute proper filing. A plaintiff favorable ruling would eliminate the statute of limitations allowing the plaintiff the opportunity to proceed to trial or work towards a settlement for any length of time.

The makeup of the board is important due to issues of fairness and impartiality; therefore, for these boards vetting individuals will be important as well as identifying those that have qualified expertise to make judgments regarding case validity. The two best occupations for board participants seem to be physicians (preferably retired) and medical ethicists. The number of board members would either be 7 or 9 depending on the budgetary allotments and the availability of vetted participants. All transactions between the board and the reviewed cases would be entirely anonymous in that the board members would not have any information pertaining to either litigator, insurance company involvement or hospital involvement, just the factual information and depositions for the case. The litigators would have no information regarding the identities of the board members. Such steps are taken to reduce the probability of reprisal or conflict of interests. Any transparency issues should be neutralized due to the supervision of the state or federal government ensuring that the board members are qualified and impartial, thus even though their identities are unknown, there is no reason to suspect foul play.

There may be an initial concern that if all of the proceedings are kept anonymous the appropriate depositions will not provide enough information to the board to make a proper decision. However, this concern is unwarranted because the purpose of the board is not to generate a conclusion regarding guilt or innocence, but determine if enough information exists and circumstances warrant such a judgment; therefore, direct questioning of possible witnesses is unnecessary.

Overall the clamor surrounding medical malpractice reform, even using the proposed review board above, is rather unnecessary because it does not attack the root of the problem with defensive medicine. First, a significant factor in increasing healthcare costs ties directly to the continuing increase in average life expectancy, something that cannot be helped; live to a greater age and there is a higher probability of experiencing detrimental health afflictions. Second, general society seems to be focusing less on maintaining a high level of quality of overall health with increasing obesity rates and a more sedimentary lifestyle, especially in children, which increases the probability of health related problems. Third, the era of Webmd has given rise to self-diagnosing patients that lack the expertise to properly identifying correlations between symptoms and cause. Instead of realizing that there is a 99% chance that symptom x is caused by common condition y, these patients are instead treating common condition y and rare condition z with equal weight and thus demand expensive tests to better verify the correct condition.

This third condition harkens to an underlying problem in society of the ‘normal expert’; the stance that expertise is only valid when said expert agrees with the opinion of the individual questioning the expert. Basically the patient disregards the diagnostic expertise possessed by the physician, placing his/her own diagnostic ability on an equal level eliminating trust and leading to the demand for the expensive tests. Unfortunately there is little the physician can do because if he/she elects not to put the patient through these tests under the rational that it is a waste of money, the patient will more than likely leave and visit another physician until he/she finds a physician that will perform the tests. Therefore, because performing the tests for patients of such psychological make-up is a foregone conclusion the initial physician might as well administer the tests to collect the associated fee.

Overall addressing these above factors will do much more to derailing the increasing costs of healthcare than establishing a detrimental and unfair medical malpractice redress cap. Even if medical malpractice suits become more problematic in the future, a review board to judge the validity of claims made seems much more practical than a universal cap that penalizes legitimate and non-legitimate claims equally.



==
1. Hyman, David, and Silver, Charles. “Medical Malpractice Litigation and Tort Reform: It's the
Incentives, Stupid.” Vand. L. Rev. May 2006. 59(1085): pp 1089.

2. “Medical Malpractice Insurance: Multiple Factors Have Contributed to Increased Premium Rates.” General Accounting Office (GAO). GAO-03-702. June 2003.

3. Lewis, L, et, Al. “Faulty Data and False Conclusions: The Myth of Skyrocketing Medical Malpractice Verdicts.” Commonweal Institute. 2004.

4. “The Great Medical Malpractice Hoax: NPDB Data Continue to Show Medical Liability System Produces Rational Outcomes.” Congress Watch. January 2007.

5. Phillips, RL, et, Al. "Learning from malpractice claims about negligent, adverse events in primary care in the United States.” Qual Saf Health Care. 2004. 13 (2): 121–6.