Reducing Med-Mal Litigation

Being sued for medical malpractice can be expensive, time-consuming and traumatic for a physician. Tort reforms and other changes in the way medical mistakes are handled, both in court and outside of it, have been touted in the past several years as ways to diminish the risk of lawsuits for physicians. Still, as we noted in the first part of this article, most doctors can expect to be sued at some time in their medical careers. Is there anything that can be done?

Legal Reforms That Are Reducing Lawsuits

The National Practitioner Data Bank (NPDB)

Beginning in September 1990, and mandated by federal law, all medical liability payments paid on behalf of physicians must be reported to the NPDB. Such payments have constituted 75% of all reportable events to the databank ' approximately 20,000 a year. Since reports to the NPDB are used in licensing and credentialing of physicians, they can have significant negative consequences for physicians in terms of their ability to practice.

With that in mind, the question becomes whether physicians and their insurers are less likely to settle on small or questionable claims knowing that even a small payment must be reported to the NPDB. The answer is yes. In 2003, researchers examined the impact the NPDB has on the dynamics of malpractice litigation. Waters, Teresa et. al., Impact of the National Practitioner Data Bank on Resolution of Medical Malpractice Claims, Excellus Health Plan, 40.3 (Fall 2003): 283-294. Retrieved May 31, 2012 from ProQuest database. Their key finding was that physicians and their insurers were less likely to settle claims, especially small ones, after reporting requirements to the NPDB became compulsory. In the first six years of NPDB-mandated reporting, they found that the probability of claims payments of any size decreased by 41%. In the case of small claims, physicians and their insurers were 50% less likely to settle in the post-NPDB environment. Furthermore, the researchers found that 30% fewer claims that had a low probability of medical negligence were rewarded with a payment. Therefore, although perhaps unintended, the NPDB seems actually to encourage physicians and insurers to defend more claims, especially the small ones and those where the medicine is strong. The plaintiff's side, it appears, perceives this resistance to settle and responds by more stringently vetting potential claims cases.

Certificates of Merit

Laws concerning certificates of merit, currently on the books in more than 20 states, require a plaintiff to submit an expert report from a medical professional when a medical malpractice lawsuit is filed, or shortly thereafter. AMA's State Law Charts on Liability Reforms, Advocacy Resource Center, American Medical Association, 2012. With this added measure, these states hope to reduce the number of meritless or “frivolous” lawsuits entering the system. Pennsylvania, for example, which began requiring certificates of merit in 2002, had 45% fewer medical malpractice lawsuits filed in 2010 than it had before certificate of merit requirements were instituted in the state. Administrative Office of Pennsylvania Courts (2011), Latest Medical Malpractice Data Shows Number of Filings Reach New Low. [Press release] Retrieved from: www.pacourts.us/NR/rdonlyres/505BE6D9-AA41-4C35AF56-86DDB71FB8B1/0/MedMal2010FilingsVerdicts_051911.pdf. The requirement actually has been helpful in reducing the costs of litigation for defendants, but not for plaintiffs, largely because it focuses in on one particular source of economic waste: the costs of defending meritless medical malpractice claims. (But while certificates of merit have been effective in reducing meritless claims, some assert that they have also reduced meritorious claims. For example, this year the Associated Press reviewed how certificates of merit were working in Connecticut and found that the number of medical malpractice lawsuits had gone down by 20% since they were instituted ' however, they concluded that this requirement may be excluding legitimate cases from entering the system in addition to meritless cases. Collins, Dave, Conn. Law Nixing Legitimate Malpractice Lawsuits, CNS News, Jan. 8, 2012. http://cnsnews.com/news/article/conn-law-nixing-legitimate-malpractice-lawsuits Retrieved June 25, 2012.)

Early Intervention in Claims That Involve Medical Mistakes

There is increasing interest in being more proactive when addressing potential claims where there has been a medical mistake. Apology programs have been in effect for some time ' most notably those in Colorado, at The University of Michigan and at the Veterans Administration Hospital in Lexington, KY. Crawford Linda, Apology Programs Are Hot News, Medical Malpractice Law and Strategy, Vol. 24, No. 11, August 2007. www.lawjournalnewsletters.com/issues/ljn_medlaw/24_11/news/149138-1.html.

However, an apology has three components: admission, remorse and reparation. The stumbling block for many of the medical mistake apology programs is the third: In order for compensation to be adequate where the injuries are severe or involve death, reparation may need to be substantial to avoid litigation. And plaintiffs' lawyers will need to be convinced that their clients won't be financially adversely affected if the plaintiff participates in such an effort. In one study, awards for plaintiffs who were successful at trial were shown to be nearly twice the size of payments made outside of court. Studdert, David et. al., Claims, Errors and Compensation Payments in Medical Malpractice Litigation, New Engl J Med, May 11, 2006, Vol. 354, Iss. 19, pg 2024.

A recent front-page article in The Boston Globe described Harvard Risk Management's efforts to head off claims before suit “where the mistake is inarguable and the health implications for the patient are obvious early on.” Kowalczyk, Liz, For Hospitals, Avoiding Lawsuits May Mean Learning to Say “I'm sorry,” Boston Globe, May 27, 2012. Ten of the 90 claims for which there was payment last year were dealt with in this pre-lawsuit way. That equates to 10 groups of potential defendants and plaintiffs who will not be subjected to a protracted legal ordeal.

Legal Reforms That Are Not Reducing Lawsuits

Pre-Litigation Screening Panels/Arbitration

Some type of screening, either through a panel/tribunal or mandatory arbitration ' most of which came into existence in the late 1980s ' have not reduced litigation, but they have increased the costs of defense. At least one study, “The Liebmann Report,” has shown that defendants do not do particularly well at these stages. Trimble, Terry, The Maryland Survey: 1994-1995 Recent Developments, The Maryland General Assembly, 55 Md. L. Rev. 893, 894 (1996). Medical malpractice defendants were successful in only 58% of cases in mandatory arbitration, compared with a national rate of 80%-90% at trial. “This likewise encourages the filing of a greater percentage of dubious claims because under an arbitration system, litigation is cheaper, quicker and more likely to result in a plaintiff's verdict than under a jury system,” the study's authors concluded.” In addition, most malpractice cases that are filed include serious injury or death, and screening panels were not designed to weed out serious cases.

Caps on Verdicts

The most common form of statutory reform at the moment is a cap on non-economic damages. California has had such a cap since 1976. Does it reduce the number of lawsuits being filed or the amount that it costs to defend them? The answer to both of these questions is “No.” Why is this?

For one, very few medical malpractice cases actually go to trial. Indeed, there are so few cases going to trial in any area that the American Bar Association commissioned a study entitled “The Vanishing Jury Trial” to determine why this has happened. Galanter, Marc, The Vanishing Trial: An Examination of Trials and Related Matters in Federal and State Courts, J Empirical Legal Stud., November 2004'Vol. 1, Iss. 3, pp. 459-570. In 2005, approximately 2,449 medical malpractice cases went to trial out of the approximately 40,000 such claims filed. Cohen Thomas, Tort Bench and Jury Trials in State Courts, 2005, Bulletin, Bureau of Justice Statistics November 2009. Retrieved from http://bjs.ojp.usdoj.gov/content/pub/pdf/tbjtsc05.pdf. That computes to one trial for every 16 claims filed. While defendants did well in trial, winning 77% of them, that is a very small fraction of all cases filed. Lee, Cynthia et. al., Medical Malpractice Litigation in State Courts' Caseload Highlights, National Center for State Courts, April 2011, Vol. 18, No. 1.

In addition, unlike other tort cases, the injuries to plaintiffs in medical malpractice cases are often substantial. Eighty percent of claims involve significant or major disability or death, not pain and suffering. Id. at fn 14. In other personal injury cases, the most common complaint was of back or neck injuries, most of the “whiplash” variety. Id. at fn 17. In the medical malpractice context, it is the economic costs of care and of lost income that account for the bulk of large judgments for plaintiffs when they receive them, not pain and suffering. Therefore, a cap on noneconomic damages cannot be relied on as a long-term factor in reducing the number of lawsuits.

Conclusion

To the extent that there are truly frivolous lawsuits ' those that don't involve injury ' those appear to be a thing of the past. Defendants' unwillingness to settle small cases after the advent of the National Practitioner Data Bank produced that unintended result. And to the extent that cases are totally without medical merit, certificates of merit that have required plaintiffs to expend money establishing a minimal case have reduced truly meritless lawsuits in the states that require them. But other efforts, such as tribunals, pre litigation screening panels and caps on noneconomic damages have not served the purpose of reducing lawsuits.

The fact remains: The average physician can still expect to be sued during his or her career.

Linda S. Crawford, JD, a member of this newsletter's Board of Editors, teaches trial advocacy at Harvard Law School and has consulted with defendants and witnesses on research-based effectiveness at deposition and trial since 1985.

Being sued for medical malpractice can be expensive, time-consuming and traumatic for a physician. Tort reforms and other changes in the way medical mistakes are handled, both in court and outside of it, have been touted in the past several years as ways to diminish the risk of lawsuits for physicians. Still, as we noted in the first part of this article, most doctors can expect to be sued at some time in their medical careers. Is there anything that can be done?

Legal Reforms That Are Reducing Lawsuits

The National Practitioner Data Bank (NPDB)

Beginning in September 1990, and mandated by federal law, all medical liability payments paid on behalf of physicians must be reported to the NPDB. Such payments have constituted 75% of all reportable events to the databank ' approximately 20,000 a year. Since reports to the NPDB are used in licensing and credentialing of physicians, they can have significant negative consequences for physicians in terms of their ability to practice.

With that in mind, the question becomes whether physicians and their insurers are less likely to settle on small or questionable claims knowing that even a small payment must be reported to the NPDB. The answer is yes. In 2003, researchers examined the impact the NPDB has on the dynamics of malpractice litigation. Waters, Teresa et. al., Impact of the National Practitioner Data Bank on Resolution of Medical Malpractice Claims, Excellus Health Plan, 40.3 (Fall 2003): 283-294. Retrieved May 31, 2012 from ProQuest database. Their key finding was that physicians and their insurers were less likely to settle claims, especially small ones, after reporting requirements to the NPDB became compulsory. In the first six years of NPDB-mandated reporting, they found that the probability of claims payments of any size decreased by 41%. In the case of small claims, physicians and their insurers were 50% less likely to settle in the post-NPDB environment. Furthermore, the researchers found that 30% fewer claims that had a low probability of medical negligence were rewarded with a payment. Therefore, although perhaps unintended, the NPDB seems actually to encourage physicians and insurers to defend more claims, especially the small ones and those where the medicine is strong. The plaintiff's side, it appears, perceives this resistance to settle and responds by more stringently vetting potential claims cases.

Certificates of Merit

Laws concerning certificates of merit, currently on the books in more than 20 states, require a plaintiff to submit an expert report from a medical professional when a medical malpractice lawsuit is filed, or shortly thereafter. AMA's State Law Charts on Liability Reforms, Advocacy Resource Center, American Medical Association, 2012. With this added measure, these states hope to reduce the number of meritless or “frivolous” lawsuits entering the system. Pennsylvania, for example, which began requiring certificates of merit in 2002, had 45% fewer medical malpractice lawsuits filed in 2010 than it had before certificate of merit requirements were instituted in the state. Administrative Office of Pennsylvania Courts (2011), Latest Medical Malpractice Data Shows Number of Filings Reach New Low. [Press release] Retrieved from: www.pacourts.us/NR/rdonlyres/505BE6D9-AA41-4C35AF56-86DDB71FB8B1/0/MedMal2010FilingsVerdicts_051911.pdf. The requirement actually has been helpful in reducing the costs of litigation for defendants, but not for plaintiffs, largely because it focuses in on one particular source of economic waste: the costs of defending meritless medical malpractice claims. (But while certificates of merit have been effective in reducing meritless claims, some assert that they have also reduced meritorious claims. For example, this year the Associated Press reviewed how certificates of merit were working in Connecticut and found that the number of medical malpractice lawsuits had gone down by 20% since they were instituted ' however, they concluded that this requirement may be excluding legitimate cases from entering the system in addition to meritless cases. Collins, Dave, Conn. Law Nixing Legitimate Malpractice Lawsuits, CNS News, Jan. 8, 2012. http://cnsnews.com/news/article/conn-law-nixing-legitimate-malpractice-lawsuits Retrieved June 25, 2012.)

Early Intervention in Claims That Involve Medical Mistakes

There is increasing interest in being more proactive when addressing potential claims where there has been a medical mistake. Apology programs have been in effect for some time ' most notably those in Colorado, at The University of Michigan and at the Veterans Administration Hospital in Lexington, KY. Crawford Linda, Apology Programs Are Hot News, Medical Malpractice Law and Strategy, Vol. 24, No. 11, August 2007. www.lawjournalnewsletters.com/issues/ljn_medlaw/24_11/news/149138-1.html.

However, an apology has three components: admission, remorse and reparation. The stumbling block for many of the medical mistake apology programs is the third: In order for compensation to be adequate where the injuries are severe or involve death, reparation may need to be substantial to avoid litigation. And plaintiffs' lawyers will need to be convinced that their clients won't be financially adversely affected if the plaintiff participates in such an effort. In one study, awards for plaintiffs who were successful at trial were shown to be nearly twice the size of payments made outside of court. Studdert, David et. al., Claims, Errors and Compensation Payments in Medical Malpractice Litigation, New Engl J Med, May 11, 2006, Vol. 354, Iss. 19, pg 2024.

A recent front-page article in The Boston Globe described Harvard Risk Management's efforts to head off claims before suit “where the mistake is inarguable and the health implications for the patient are obvious early on.” Kowalczyk, Liz, For Hospitals, Avoiding Lawsuits May Mean Learning to Say “I'm sorry,” Boston Globe, May 27, 2012. Ten of the 90 claims for which there was payment last year were dealt with in this pre-lawsuit way. That equates to 10 groups of potential defendants and plaintiffs who will not be subjected to a protracted legal ordeal.

Legal Reforms That Are Not Reducing Lawsuits

Pre-Litigation Screening Panels/Arbitration

Some type of screening, either through a panel/tribunal or mandatory arbitration ' most of which came into existence in the late 1980s ' have not reduced litigation, but they have increased the costs of defense. At least one study, “The Liebmann Report,” has shown that defendants do not do particularly well at these stages. Trimble, Terry, The Maryland Survey: 1994-1995 Recent Developments, The Maryland General Assembly, 55 Md. L. Rev. 893, 894 (1996). Medical malpractice defendants were successful in only 58% of cases in mandatory arbitration, compared with a national rate of 80%-90% at trial. “This likewise encourages the filing of a greater percentage of dubious claims because under an arbitration system, litigation is cheaper, quicker and more likely to result in a plaintiff's verdict than under a jury system,” the study's authors concluded.” In addition, most malpractice cases that are filed include serious injury or death, and screening panels were not designed to weed out serious cases.

Caps on Verdicts

The most common form of statutory reform at the moment is a cap on non-economic damages. California has had such a cap since 1976. Does it reduce the number of lawsuits being filed or the amount that it costs to defend them? The answer to both of these questions is “No.” Why is this?

For one, very few medical malpractice cases actually go to trial. Indeed, there are so few cases going to trial in any area that the American Bar Association commissioned a study entitled “The Vanishing Jury Trial” to determine why this has happened. Galanter, Marc, The Vanishing Trial: An Examination of Trials and Related Matters in Federal and State Courts, J Empirical Legal Stud., November 2004'Vol. 1, Iss. 3, pp. 459-570. In 2005, approximately 2,449 medical malpractice cases went to trial out of the approximately 40,000 such claims filed. Cohen Thomas, Tort Bench and Jury Trials in State Courts, 2005, Bulletin, Bureau of Justice Statistics November 2009. Retrieved from http://bjs.ojp.usdoj.gov/content/pub/pdf/tbjtsc05.pdf. That computes to one trial for every 16 claims filed. While defendants did well in trial, winning 77% of them, that is a very small fraction of all cases filed. Lee, Cynthia et. al., Medical Malpractice Litigation in State Courts' Caseload Highlights, National Center for State Courts, April 2011, Vol. 18, No. 1.

In addition, unlike other tort cases, the injuries to plaintiffs in medical malpractice cases are often substantial. Eighty percent of claims involve significant or major disability or death, not pain and suffering. Id. at fn 14. In other personal injury cases, the most common complaint was of back or neck injuries, most of the “whiplash” variety. Id. at fn 17. In the medical malpractice context, it is the economic costs of care and of lost income that account for the bulk of large judgments for plaintiffs when they receive them, not pain and suffering. Therefore, a cap on noneconomic damages cannot be relied on as a long-term factor in reducing the number of lawsuits.

Conclusion

To the extent that there are truly frivolous lawsuits ' those that don't involve injury ' those appear to be a thing of the past. Defendants' unwillingness to settle small cases after the advent of the National Practitioner Data Bank produced that unintended result. And to the extent that cases are totally without medical merit, certificates of merit that have required plaintiffs to expend money establishing a minimal case have reduced truly meritless lawsuits in the states that require them. But other efforts, such as tribunals, pre litigation screening panels and caps on noneconomic damages have not served the purpose of reducing lawsuits.

The fact remains: The average physician can still expect to be sued during his or her career.

Linda S. Crawford, JD, a member of this newsletter's Board of Editors, teaches trial advocacy at Harvard Law School and has consulted with defendants and witnesses on research-based effectiveness at deposition and trial since 1985.