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Tort reform
- 1. Name of Meeting/ Conference Date of Presentation Tort Reform - What it is and why we need it - Presented by Emergency Medicine Residents’ Association
- 2. Overview • Background • Theproblem • Possible solutions • Differing outcomes • What you can do
- 3. Torts • A wrongfulact that causes injury • Medical malpractice = part of tort law • Goal = protect patients from bad MDs • A medical malpractice suit requires: – Duty of care – Breach of standards – Compensable injury – Proximal causation
- 4. The problem • Malpracticeinsurance is expensive!! • The current crisis began in the late 1990s • From 1999-2002, malpractice premiums for a general surgeon – Increased by 75% to $174,300/year in Dade County, Florida – Increased by 2% to $10,140/year in Minnesota Source: United States General Accounting Office
- 5. Why is thisa problem? • Some physicians are changing their practices – Relocating – Retiring – No longer performing higher-risk procedures • Some patients are losing access to care – Reduced access to hospital-based services affecting emergency surgery and newborn deliveries in scattered, often rural, areas Source: United States General Accounting Office
- 6. Why the priceincreases? • Losses on medical malpractice claims – The primary driver of rate increases • Reduced competition as insurance companies leave unprofitable markets • Reduced investment income • Increased reinsurance costs Source: United States General Accounting Office
- 7.
- 8. Caps on non-economicdamages • Economic damages = medical costs, future care costs, quantifiable loss of income • Non-economic damages = not easily quantifiable amounts for pain and suffering • Punitive = usually for gross negligence
- 9. Problems • Caps don’talways mean lower insurance rates Why? • Caps have been litigated and found unconstitutional in several states: – Texas amended its constitution to specifically authorize caps on non-economic damages (2003) – In 2010, Illinois’ and Georgia’s Supreme Courts ruled their caps unconstitutional
- 10. Arguments Against Caps •Caps disproportionately injure the most vulnerable • No proof caps lead to lowered premiums • Maintain the incentive for physicians to follow the standard of care Source: American Bar Association
- 11. Other Reforms • Joint& Several Liability • Contributory Negligence • Expert Witness Rules • Case Certification Requirements • Pre-Trial Review Panels
- 12. Other Reforms (continued) •Statute of Limitations • Collateral Source Rules • Periodic Payments • Limitations on Attorneys’ Fees
- 13. Burden of Proof •Preponderance of the evidence • “Clear and convincing” evidence • “Willful and wanton” negligence
- 14. Federal Reforms • HealthCare Safety Net Enhancement Act of 2015
- 15. Texas v. NewYork
- 16. Outcome Source: Cunningham Group $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 20002002 2004 2006 2008 2010 2012 Year Annual Premiums IM (NY) GS (NY) OG (NY) IM (TX) GS (TX) OG (TX)
- 17. Effects • Lower malpracticepremiums lead to more physicians • Reduced risk for lawsuits does not lead to less “defensive medicine” or fewer costs
- 18. What can youdo?
Editor's Notes
- #2 Thank you for welcoming EMRA to your meeting today. My name is ___________ - I’m a (year) resident at (name of program). I’m also a big fan of EMRA and have been for quite a while. Today I’d like to share why that’s so and why I think everyone in emergency medicine should join EMRA. If you are already an EMRA member, maybe I can enlist your help in convincing those residents who aren’t members what a great organization this is! If you haven’t joined yet, I hope to show you the fabulous resources that EMRA offers to residents and convince you that being a member throughout your residency is a fabulous way to get involved in an organization that grows with you in your career. Let’s get started! And if you have questions – please feel free to ask them at anytime – this is your meeting and I want to make sure you go home with your questions asked and answered. I will also leave you with my contact information at the end of my presentation today – I’m available anytime to answer your questions or help get them answered.
- #3 First we’ll give some background and define what the problem is. What is “tort reform” anyways? Then we’ll discuss possible solutions—some just proposed, others already enacted—to this problem. And enough time has passed that we can compare outcomes between states that have enacted reforms and those that have not. Spoilers!! The states that have worked harder to pass reforms and to make sure they’re followed have performed better—lower malpractice premiums, more doctors coming in to practice, more physician coverage for patients—than states that have not.
- #4 We’re not going to be speaking about the yummy kind of torts, but about the legal kind. Sorry. Medical malpractice is a legal tort that requires 4 components: The physician had a duty to care for the patient The physician provided care below the appreciable standard of case The patient suffered an injury that can be compensated for The physician’s substandard care caused the patient’s injury
- #5 Physicians need to be able to buy medical malpractice insurance to be able to practice without fear of being personally bankrupted by a lawsuit. The problem is that insurance premiums started to soar in some parts of the country in the late ’90s. And premiums can vary tremendously across different parts of the country because tort law depends on each state. Source: General Accounting Office, GAO-03-702 Medical Malpractice Insurance: Multiple Factors Have Contributed to Increased Premium Rates, 2003
- #6 The malpractice crisis was so prominent that Congress authorized the General Accounting Office in 2003 to do a study on the rise in medical malpractice insurance premiums and its effects. The GAO study found that some physicians have changed locations or even retired because of the high cost of malpractice insurance. Some physicians have also stopped doing high-risk procedures. The GAO found that these changes have mostly hurt rural areas, which already have had less physician coverage to begin with. Source: General Accounting Office, GAO-03-836 Medical Malpractice: Implications of Rising Premiums on Access to Healthcare, 2003
- #7 There are many reasons medical malpractice premiums have been increasing, but the GAO found that the primary driver of rate increases was insurers’ losses on medical malpractice claims. Many malpractice cases can take years to settle and even longer to come to judgment. Starting in the late ’90s, some juries started awarding damages that far exceeded the amounts that the insurers had provisioned for, eating into the reserves of the insurance companies. The insurance companies that stayed in the business of medical malpractice insurance had to raise their rates not just to reserve against future claims but also to replenish their capital because of the size of current judgments.
- #8 A lot of the proposals to fix this broken system—that hurts both physicians’ ability to practice medicine the way they want to and the patients’ ability to receive this kind of care—have to do with reforming the legal and regulatory environment that we have to work in. We’ll go over each of many of these proposals one-by-one. Source: National Association of Insurance Commissioners, Medical Malpractice Insurance Report: A Study of Market Conditions and Potential Solutions to the Recent Crisis, 2004
- #9 This is the big one. Non-economic damages are where the “jackpot justice” of medical malpractice lawsuits comes from. It also raises the cost of malpractice insurance in several ways. Directly, it increases the payout by the insurance company, which leads to higher premiums for the provider. Indirectly, the unpredictable (and sometimes unpredictably large) amounts awarded by juries cause insurance companies to raise their rates even higher in states without caps to protect themselves from “jackpot” payoffs. Punitive damages are rarely awarded by juries. This usually only comes to play in cases of gross negligence.
- #10 Caps on non-economic damages were intended to decrease litigation, but the caps themselves have been subject to litigation! Insurers are not willing to immediately bring down their rates even when this reform happens because it has not proven to be lasting. Some state supreme courts have overturned these laws as being unconstitutional. Some states even have it explicitly written into their constitutions that caps are not allowed!
- #11 These are from the American Bar Association. I’ll just leave this right there. Source: American Bar Association, Frequently Asked Questions about Medical Malpractice, May 2006
- #12 There are a lot of other reforms I’ll run through quickly. Many of these seem to make a lot of sense, but there are lots of states that won’t pass these. Joint & Several Liability: in states that have not passed this reform, being jointly and severally liable means that each defendant is not just liable for his or her share of the judgment, but is also liable for the rest of the judgment if any of the other defenders don’t pay. This incentivizes trial lawyers to name everyone they possibly can—especially those who they think have deep pockets—when they sue, regardless of how much that person may have contributed to the incident. Contributory Negligence: the very few states that still uphold this doctrine do not allow plaintiffs to recover anything when their own negligence contributed to the outcome. Expert Witness Rules: in states without reforms, medical “experts” who testify at trial don’t have to be in the same specialty as the physician being sued, don’t have to practice in the same state as the physician, and in some states don’t even need to be a practicing physician at all! The worst states in this regard allow non-physicians to testify, or even don’t require any experts at all. Case Certification Requirements and Pre-Trial Review Panels: both these reform are intended to weed out “frivolous” lawsuits before they even begin. Some states have passed reforms requiring that a physician in the appropriate specialty, or a board of physicians, sometimes with a lawyer present review the case before it is allowed to go to trial. However, in some of the states that require these opinions, these opinions are advisory only. Plaintiffs can still proceed to trial in these states, even if the physicians who review the case believe it has no merit.
- #13 Statute of Limitations: some states have laws that allow suits to be brought up to 7 years after discovery of the incident. Some state courts have even allowed cases to proceed after the state’s statute of limitations has passed! This is very, very rare, but it has happened. Having a longer period of time for when a plaintiff can bring a suit increases the uncertainty for the insurer, which increases the cost of the insurance to the physician. Collateral Source Rules require that plaintiffs reveal if they are receiving compensation from any other sources: health insurance, workers’ compensation, Social Security, and so on. This is so that plaintiffs don’t “double dip” and receive compensation for lost earnings from multiple sources. Periodic Payments: this reform would allow insurance companies to pay future medical costs and foregone earnings in the future, and not as a lump sum when a judgment is given. Limitations on Attorneys’ Fees: in the worst states, attorneys can earn 1/2 of the judgment awarded to the client, after expenses! This, of course, incentivizes attorney to bring more lawsuits and to aim for larger judgments.
- #14 This reform is of special important to emergency physicians, who are bound by EMTALA to provide emergency care. A few states have included, in their tort reforms, increased evidentiary requirements for lawsuits for events that happen in an emergency setting. Most states require just a preponderance of the evidence, which is the usual requirement in a civil lawsuit. But because of the specific factors in providing care in an emergency setting, some states have particularly protected emergency physicians by increasing the requirement for a successful lawsuit to “clear and convincing” evidence or even evidence of “willful and wanton” negligence. All the rest of the states have to pass this kind of reform, and this is one that emergency physicians—in particular among the specialties—need.
- #15 Most of the action regarding reforms are at the state level, but there are some reforms that can happen at the federal level. ACEP is supporting a proposed law that would extend the same legal protections that Congress has extended to employees of community health centers and employees and volunteers at free clinics to physicians in the emergency setting. The U.S. would provide liability protection to civil suits that arise while providing care that is required by EMTALA. Go see if your local Senators and Congressperson support this bill. Thank them if they do, and talk to them if they don’t!
- #16 Now I don’t want to start a fight here… And this isn’t about a lawsuit between two states. But enough years have passed since the most recent crisis began that we have good data that can show how these reforms have affected medical malpractice insurance premiums. Spoilers: Texas wins!
- #17 Here is data gathered from the Cunningham Group. Premiums in New York are in solid lines. Premiums in Texas are in dashed lines. The specialties shown are Internal Medicine and two “high-risk” specialties: General Surgery and Ob/Gyn. The Texas data comes from the most expensive markets in the state: Brownsville and Laredo. The New York data comes from New York County (Manhattan), which is not the most expensive market in the state (Long Island is), but whose premiums in 2000 were roughly similar to the Texas data in 2000. Texas enacted a package of tort reforms in 2003, including a cap on non-economic damages of $250,000 per occurrence for all healthcare workers, and $250,000 per occurrence for all healthcare facilities. Texas also amended its constitution to prevent these caps from being overturned in court, as has happened in a number of states. Texas also changed the burden of proof in emergency care to gross negligence. You can see that starting in 2004 in Texas, premiums declined across all specialties and continued to do so year after year. In New York, one of the most trial lawyer-friendly states, premiums have continued to rise. The increase has been especially dramatic in the most high-risk specialties.
- #18 Since the 2003 reforms, physicians in all specialties have been moving to Texas. 82 counties in Texas (out of 254) have seen a net gain in emergency physicians. 50 counties that did not have any emergency physicians in 2004 now have at least 1 as of 2014. More doctors practicing means more care. (Source: Cunningham Group and NEJM) However, the reforms have not led to a decrease in the costs associated with this care. A study that compared 3 states that passed reforms (Texas, Georgia, South Carolina) in the mid ’00s with neighboring states that did not, did not find any significant difference in the use of advanced imaging or hospital admissions—which is a proxy for total costs. (Source: N Engl J Med 2014; 371:1518-1525 October 16, 2014 DOI: 10.1056/NEJMsa1313308)
- #19 Get involved!!