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

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

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

5. Insurance
Lessens impact of negligence on wrongdoer

6. Slow
11 months in arbitration
5 years in court

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

8. Here’s my plaintiff’s attorney cartoon.

9. 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

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Significant number of initial claims are abandoned, withdrawn or dismissed: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

11. $5.7B in liability payment
Expensive!
$5.7B in liability payment
$3.15B Economic damages
$2.4B Noneconomic damages
$ 0.17B Punitive damages

12. $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

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

14. Two kinds of changes proposed:
Start New
Tinker with Old

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

16. A jury of your peers?

17. 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

18. Mandatory ADR
Faster
Fairness?

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

20. Tweaks

21. 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.

22. 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

23. 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.

24. 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”

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

26. Joint and Several Liability
Mixed research results

27. Collateral Source Rules 26 States

28. Periodic Payments
Prevents Windfall
Patient Reliant on Others

29. 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

30. 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.

31. Questions………. Comments………..