Professional Liability is Broken and How It Might Be Fixed David Lerman, MD, JD General Counsel Southern California Permanente Medical Group May 7, 2019

Purpose of Medical Malpractice Litigation Compensate Injured Patients Motivate physician education, practice change

The Problems: Based on 12th Century English concept of tort One person does something wrong that harms another

Insurance Lessens impact of negligence on wrongdoer

Slow 11 months in arbitration 5 years in court

Those who receive money often don’t deserve it: 37% of paid claims involve any malpractice

Here’s my plaintiff’s attorney cartoon.

Many of those who don’t receive money do deserve it: 1.5 – 10 lawsuits for every 100 cases of negligent injury Some may receive settlements before filing Some may receive nothing after filing Stigma Ignorance Hassle Expense Perceived impact on care

Litigation cost and stress Significant number of initial claims are abandoned, withdrawn or dismissed: Litigation cost and stress

$5.7B in liability payment Expensive! $5.7B in liability payment $3.15B Economic damages $2.4B Noneconomic damages $ 0.17B Punitive damages

$4.1B in Administrative expenses 35% of all money paid goes to attorneys $45.6B-$200B in defensive medicine many causes 2.4-%10 of all health care spending

Time Consuming and Counterproductive One of 14 docs faces a lawsuit each year Does not reduce medical errors Hampers patient safety efforts

Two kinds of changes proposed: Start New Tinker with Old

Health Courts Lay juries are often confused, vote based on sympathy. Randomness leads to lottery mentality.

A jury of your peers?

Compensation Fund Aligns patient and physician Low Cost to Administer Who pays and how much? Working in Iceland What is paid for: Need there be malpractice? Just iatrogenic harm? Basic cost v. making people whole

Mandatory ADR Faster Fairness?

No Fault Insurance Private Adequacy of Compensation Low Cost Working in New Zealand, Sweden, Denmark

Tweaks

Statutes of Limitations Time limit to file a malpractice claim. California – 1 year after injury or 3 years after discovery, longer for children, concealment. Statutes of limitation are laws that set time bars after which a claim can no longer be filed. The objective is to avoid having to litigate claims when the evidence has grown stale, and memories have started to fade. Statutes of limitations also help insurers, because they add a level of “certainty” about whether or not a patient will sue for malpractice, thus reducing the amount of reserves an insurer needs to set. In California, there is a specific statute of limitation for a claim against a health care provider for medical malpractice resulting in injury or death - California Code of Civil Procedure 340.5, which states that a medical malpractice case must be filed “three years after the date of injury or one year after the plaintiff discovers, or through the use of reasonable diligence should have discovered, the injury, whichever occurs first.“ The effect of SOLs on the number of claims filed or paid, or on liability premium levels is mixed; lawyers simply adapted to the shorter deadlines by submitting pleadings quicker.

Affidavit or Certificate of Merit About half of states require Signed by physician in the same specialty as defendant Certifies that the case has merit, that the expert believe the SOC was breached Certifier typically need not testify

Pretrial Screening Panels Expert panels review cases early on, and opine whether claims have sufficient merit to proceed. A negative opinion doesn’t bar a case from proceeding, but the plaintiff may be required to post a bond, and the negative opinion admissible at trial. Fewer cases are settled because they are too expense to defend. Another attempt to reduce the number of cases filed is the pre-trial screening panel. These are designed to keep meritless and difficult to prove claims out of the judicial process. This reform also helps to reduce the time and money expended in resolving claims of questionable merit by encouraging plaintiffs to abandon them, or take a small settlement.

Expert Witness Standards Board certification in relevant specialty/subspecialty Treat patients with the plaintiff’s condition “Strongly correlated with reductions in the average medical malpractice claim size, total number of paid claims, and the number and average size of paid claims per physicians”

Limit Contingency fees Limits gauging and motivation for baseless claims Limits supply of attorneys

Joint and Several Liability Mixed research results

Collateral Source Rules 26 States

Periodic Payments Prevents Windfall Patient Reliant on Others

MICRA of 1975 (HR1215, 2017) $250,000 cap on pain and suffering Several Caps Special Damages Increase Limits Attorney Fees 40% of first $50k 33.3% $50-599k 15% of any amount>$600k

Result? Compensation to patients declined 15% Attorney fees fell 60% (RAND Study) Plaintiff attorneys bear more of the costs Reduced litigation Stabilized insurance premiums No reduction in overall healthcare spending No change in patient safety or physician supply Here are some of the effects of MICRA. According to a 2011 New England Journal of Medicine article, studies have nearly uniformly found that caps are an effective means of reducing the size of payouts to plaintiffs. Their effects on premiums is mixed, but it’s reasonable to conclude that caps modestly constrain the growth of insurance premiums over time. For example, in Georgia, the frequency and severity of medical malpractice claims have been steadily rising since the Georgia Supreme Court struck down the state’s $350,000 cap on non-economic damages as unconstitutional.

Questions………. Comments………..