January 28, 2011
10:23 am
Medical liability reform is one of those causes that, up to now, has seemed a political impossibility at the federal level. Even in years when Republicans controlled both the U.S. Senate and House, tort reform advocates couldn’t muster sufficient votes to get legislation passed. A number of states have enacted reform measures, but Congress – encouraged by strong lobbying from the nation’s trial attorneys – has stubbornly refused to rein in even the most meritless lawsuits.
Now, though, we’re seeing a number of actions taking place that indicate there may be an opening to get something done on liability reform. Among them:
• President Obama made it a point to mention medical liability reform in his State of the Union speech.
• The President’s deficit reduction commission has cited comprehensive liability reform as a recommended action to contain healthcare costs.
• Medical liability reform legislation has just been introduced in the House of Representatives, and it has bipartisan sponsorship.
• There is increasing interest in innovative measures such as tying liability protections to usage of health information technology and evidence-based medicine.
There are compelling reasons for Congress to move on this issue. We have to be concerned about having a sufficient supply of physicians to serve an insured patient population that will increase as a result of health reform. In many states, the liability climate forces physicians into early retirement. We’re concerned about making our healthcare system more cost efficient, and yet the current liability system forces the expenditure of dollars in ways that don’t benefit patients. President Obama’s right. It’s time to make progress on this issue.
November 16, 2010
2:21 pm
An interesting and disturbing article appeared in the New York Times yesterday. The Times and the Center for Public Integrity collaborated on an investigative piece explaining how large banks, hedge funds and private financiers are investing in lawsuits, funneling dollars into litigation – including medical liability suits – they find promising in exchange for a piece of whatever lucrative payout emerges.
There’s something very unseemly about this, gambling on whether human misery may generate a generous financial reward. But, beyond the distastefulness of it, this practice leads to a public policy question. Is the public interest served by encouragement, through private third-party financing, of litigation?
This is a thorny question. On one hand, would it be right to deprive a plaintiff and his or her legal team of the resources they need to hire investigators and expert witnesses in order to gain a fair judgment? But, on the other, as the Times and the Center for Public Integrity report, “borrowed money is also fueling abuses, including cases initiated and controlled by investors.”
As imperfect as it may be, current practices in litigation act as something of a check within the system. Because personal injury attorneys work on a contingency fee basis and front the trial expenses themselves, they’re more reluctant to take a case that is completely without merit. (Again, this is an imperfect system, given that 65 percent of claims are dropped or dismissed.) Having available investor financing increases the likelihood that an attorney will press a case as far as possible, thus further clogging already-overstuffed court dockets.
The Times article also points out that there are no legal requirements for attorneys to tell their clients about investor involvement in their cases, thus a client would have no awareness that a financial institution or a well-heeled investor may have a voice in the strategies and ultimate settlement of their claim.
As the Institute for Legal Reform, an arm of the U.S. Chamber of Commerce, pointed out, “the root problem with third-party funding is that it introduces a stranger to the attorney-client relationship whose sole interest is a financial one.”
Many state courts and legislatures have refused to enact any kind of barriers or prohibitions against investments in lawsuits but, given this new visibility, I would expect more attention to be given to this issue.
September 03, 2010
9:48 am
Is it good public policy to modify tax laws to encourage more lawsuits against physicians?
That’s a question the American Medical Association raised this week in a letter to Treasury Secretary Timothy Geithner. It seems that there are rumblings about the government making changes in tax regulations that would allow lawyers who work on contingency fees (which is the case with the vast majority of personal injury attorneys) to deduct their litigation expenses as they occur instead of after a case is completed.
What’s the significance here? As Daniel Fisher explained in Forbes, oil drillers are allowed to write off expenses when they drill a well, not just when the energy emerges from the ground. There’s a public policy benefit here, in that it’s in the public’s best interest to encourage more energy exploration. By having the ability to deduct expenses as they go, the financial risk of oil drilling is reduced.
But is it in the public’s interest to encourage more litigation against physicians and hospitals? That’s a dubious proposition considering that studies have shown the vast majority of medical liability suits are found to be meritless and the average cost to defend against a suit is $22,000, thus pushing a significant amount of dollars out of healthcare and into attorneys’ incomes.
I think the AMA has a good point here. The Congressional Budget Office has already said that the government could save $54 billion over 10 years by reducing the number of medical liability cases and, with it, the need to practice defensive medicine. That should be our public policy direction, not the encouraging of even more lawsuits.
August 17, 2010
9:57 am
In defending the medical liability status quo, trial attorneys’ associations frequently argue that, instead of tort reform, the medical professions need to do a better job of policing their comparably few bad actors who generate the most malpractice litigation.
There’s a new study, though, that shows it’s not just a few doctors who get slapped with lawsuits – suits that, more often than not, are without sufficient merit.
A survey of nearly 6,000 physicians by the American Medical Association has found that, among doctors 55 and older, more than six of every 10 have been sued at some point in their career. For every 100 physicians surveyed, there have been an average of 95 liability cases filed.
As to the merit of these cases, only five percent of the lawsuits actually went to trial. Sixty-five percent were dropped, dismissed or withdrawn. Of the five percent that made it to trial, 90 percent were decided in favor of the defendant, according to the Physician Insurers Association of America.
With these numbers in mind, AMA immediate past president J. James Rohack, M.D. raised legitimate concerns when he said, “Even though the vast majority of claims are dropped or decided in favor of physicians, the understandable fear of meritless lawsuits can influence what specialty of medicine physicians practice, where they practice and when they retire.”
July 30, 2010
6:35 am
Some ideas on Capitol Hill make so much sense that you can’t help but wonder why they haven’t become law already.
But, then again, tort reform has proven many times to be the legislative swamp where good ideas go to die.
This week, the House Energy and Commerce Committee passed a measure that would have the federal government provide medical liability coverage to physicians who volunteer their time at free clinics or community health centers. Current law, the Federal Tort Claims Act, provides malpractice coverage to community health center employees, but not to volunteering physicians.
When doctors have to pay their own extensive liability coverage for doing a good deed and bringing their services to a community health center, it’s no wonder that many can’t afford to do so.
The bipartisan authors of the Family Health Care Accessibility Act that won House Energy and Commerce passage, Representatives Gene Green (D-TX) and Tim Murphy (R-PA), say extending liability protections would let physicians provide coverage to 20 million Americans, 70 percent of them below the poverty line.
Legislation like this is particularly important when you consider that the number of people receiving care from community health centers is expected to double to 40 million by 2015.
This bill has been introduced twice in the last two years and failed to make it to the finish line both times. In 2008, it was cut from a community health center reauthorization bill in conference committee. Last year, it was incorporated into the House’s version of health reform legislation but not the Senate’s, and it was the Senate bill that went to the President this spring.
Anytime you get into tort reform issues, it becomes a sticky, sensitive political matter. On this legislation, though, it’s hard to make an argument that the medical liability status quo should stay intact if it means denying care to some of America’s most vulnerable citizens.
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