Does Medical Malpractice Law Improve Health Care Quality?

by on January 28, 2014 at 12:49 am in Law, Medicine | Permalink

Maybe not so much.  That is a new paper by Michael Frakes and Anupam B. Jena, the abstract is here:

Despite the fundamental role of deterrence in justifying a system of medical malpractice law, surprisingly little evidence has been put forth to date bearing on the relationship between medical liability forces on the one hand and medical errors and health care quality on the other. In this paper, we estimate this relationship using clinically validated measures of health care treatment quality constructed with data from the 1979 to 2005 National Hospital Discharge Surveys and the 1987 to 2008 Behavioral Risk Factor Surveillance System records. Drawing upon traditional, remedy-centric tort reforms—e.g., damage caps—we estimate that the current liability system plays at most a modest role in inducing higher levels of health care quality. We contend that this limited independent role for medical liability may be a reflection upon the structural nature of the present system of liability rules, which largely hold physicians to standards determined according to industry customs. We find evidence suggesting, however, that physician practices may respond more significantly upon a substantive alteration of this system altogether—i.e., upon a change in the clinical standards to which physicians are held in the first instance. The literature to date has largely failed to appreciate the substantive nature of liability rules and may thus be drawing limited inferences based solely on our experiences to date with damage-caps and related reforms.

There is an ungated version of the paper here.

So Much For Subtlety January 28, 2014 at 1:53 am

John Edward won millions, and supported a successful (for a while) political career on the basis of suing doctors for not doing anything to prevent cerebral palsy or because their patients later committed suicide. There is actually nothing a doctor can do to prevent CP. It was manipulative class-warfare bullsh!t from beginning to end.

So why would it be a surprise that a frankly random process designed to punish insurance companies would have a limited effect on medical outcomes? For it to actually have a positive outcome it would have to be based on real science and arrive at fair decisions. In other words, ambulance chasing shysters like Edwards should be kept out of the process.

mulp January 28, 2014 at 4:49 pm

But without single payer and decent welfare system or some other system of paying for the care disabled children, what is the “pro-life” method of paying for their care?

If conservatives would embrace creative destruction as part of their quest for free market health care and free market general welfare, disabled children would be creatively destroyed by being euthanized and chopped up for sale to those needing spare parts.

Name a rich person that has won a million dollar medical tort.

Instead its a long list of middle to upper middle class families that face poverty or a life of the struggling working poor.

Vivian Darkbloom January 28, 2014 at 3:27 am

I seriously doubt that this “”…a frankly random process” was “designed to punish insurance companies.”

First, “medical malpractice law” is a product of common law tort and other than certain non-substantive rules such as the statute of limitations and caps on damage awards it is substantively almost indistinguishable from the application of tort law to other acts of negligence. Second, do you really think that insurance companies are punished by the liberal application of tort law to medical treatment? I would think that insurance companies have benefitted greatly and it is health care professionals and their patients that have been “punished”.

And, of course, the question is not solely whether “medical malpractice law” has improved the quality of health care. The question is also whether any such improvement is worth the cost. Would the “quality of health care” be higher if the (excessive) cost of that law were to be ultimately applied to a reduction in the cost of that care to consumers?

Ironically, the economics profession and, in particular, the “Chicago School” are largely responsible for the expansion of monetary awards through tort law, including medical malpractice. It was these economists/jurists who gained prominence in the early 1970′s and argued that tort law should focus not only on “fault” but on the perceived economic benefits of “spreading the costs of risk” throughout the economy via the legal tort system who are responsible for the “frankly random process” that we know today. The thinking behind “strict liability” has seeped into the award process for acts of mere negligence.

Bill January 28, 2014 at 9:22 am

+1 Agree, but for the comment on risk spreading: the real question is: is an injured patient who did suffer malpractice the person who should bear the loss, in terms of future income, medical bills, etc.

As we move towards the elimination of preexisting conditions and lifetime caps, some adjustment in awards might occur: a settlement might be to pay for deductables and lifetime medical insurance.

Vivian Darkbloom January 28, 2014 at 11:03 am

“…the real question is: is an injured patient who did suffer malpractice the person who should bear the loss, in terms of future income, medical bills, etc.”

If that is the “real question”, then it is a straw man, but my original comment should have been more clear. My original comment should have read “The thinking behind “strict liability” has seeped into the award process for acts of mere *alleged* negligence. The point is that the original concept of “strict liability” (the concept that those engaged in dangerous activity should be held liable in tort even in the absence of “negligence”) has seeped into other areas. Courts are now more likely to award damages even when there is no negligence even if they have to stretch the traditional concept to make some up. The rationale here, stated or not, is that through the deep pockets of provider insurance, any misfortune that befalls an individual patient can be (over) compensated through society at large even when there is no plausible case of “negligence”. And, due to the large potential awards and the cost of defending them, many cases that to not involve “negligence” are settled. Plaintiff lawyers and their clients are fully aware of that.

The idea that tort law should serve as umbrella insurance is again one that gained strength through Chicago School economists. Plaintiff’s lawyers have been the primary beneficiaries.

If you want to amend your original “real question” to read: “”…the real question is: is an injured patient who did *not* suffer malpractice the person who should bear the loss, in terms of future income, medical bills, etc.”, I would say “yes”, even though much of what is awarded in malpractice suits nothing to do with “future income”, “medical bills”, and everything to do with “etc”.

Bill January 28, 2014 at 9:10 pm

Vivian, you are intelligent enough to know that there is no strict liability standard applicable to malpractice…only a negligence standard.

Vivian Darkbloom January 29, 2014 at 4:13 am

And you are intelligent enough to know that I did not write that. I wrote that the same *rationale* behind strict liability (the spreading of the cost of risk) was being used to weaken the negligence standard and make it easier to win awards (and larger awards) under the latter standard. For folks with shallow minds, let’s call that the deep pocket syndrome.

mpowell January 28, 2014 at 3:03 pm

This is what I was going to say. Why does malpractice law have to improve medical outcomes generally? If it just avoids forcing unlucky patients to bear the cost of negligent care that seems like a pretty good result.

Alan Gunn January 28, 2014 at 10:47 am

It wasn’t Chicago school people who pushed the expansion of tort law, it was lawyers, most of them blissfully ignorant of economics. People like Roger Traynor, William Prosser, and John Wade. They shared the fantastic ideas that juries made up of people with no training could “balance” the costs and benefits of particular designs and that the costs of liability would just add a few pennies to the costs of products or services and so would be “spread” among everyone who used the product or service. Their main focus, though, was on manufactured products, not medical malpractice. What the first comment said about Edwards is true, though it’s silly to say the system was “designed to punish insurance companies.” It wasn’t designed at all, it just emerged from procedures which rely on jurors of laypeople to pick the “expert” whose testimony they will believe, and who have the power to give other people’s money to needy people.

Vivian Darkbloom January 28, 2014 at 11:18 am

Becker, Buchananm Calabresim Coase, Cooter, Demsetz, Epstein, Landes, Manne, Posner, Priest, Rubin, Shavell, Trebilockm Tullock, Williamson, etc.

These were the founders of modern day “Law and Economics” in the 1960’s and 1970’s. The tort plaintiff bar was very pleased to cooperate.

So Much For Subtlety January 28, 2014 at 6:35 pm

Sorry but no. Medical malpractice law arose out of a great shift in the legal process in the 20th century – which to some degree applied to all tort law. In doing so, a lot of the old restraints on tort law were removed in a deliberate effort to encourage more law suits. The idea, among lawyers, being that society was served if the law courts could bully everyone into better behavior.

So they removed the requirement that testimony should only come from recognised experts in the field, testifying to science that was well established. Half of Edwards’ cases would have been tossed without a hearing before 1900. They removed the bans on lawyers chasing ambulances. And taking a large chunk of the pay outs. As Edwards shows only too well. They removed the limits in speculative damages.

I agree that the costs do not go to the insurance companies. They make everyone pay. But the juries do not see it that way. They see it as punishing the big out-of-town insurance companies. Which is why no one in their right mind wants to be sued in front of a small town jury.

And yes, ramdom the process is. It doesn’t matter what you do. Or don’t do. You will probably be sued and make some lawyer rich.

prior_approval January 28, 2014 at 3:33 am

‘…that physician practices may respond more significantly upon a substantive alteration of this system altogether—i.e., upon a change in the clinical standards to which physicians are held in the first instance.’

It is rare to see such unqualified support for ACA at this website, as one of its varied attempts to improve the American health care system is to actually improve it in practice – including such simple things as this -

’1. Checklists

Surgeons and nurses at the hospital now carry around a sheet of paper listing every simple step they’re supposed to perform.

Did the patient get her antibiotics on time? Check.

Did the catheter come out on time? Check.

Research has long shown that documenting simple steps can significantly reduce medical error. Yet hospitals have a hard time implementing checklists, because doctors don’t really like them.

“When we came up with this, I kind of felt a little silly for the first few weeks following a sort of checklist or menu,” surgeon Eric Espinal says.’ http://www.npr.org/blogs/money/2013/12/02/247216805/three-ways-obamacare-is-changing-how-a-hospital-cares-for-patients

Obviously, leaving a catheter inside a patient for too long can lead to the sorts of complications that would cause one to sue for malpractice. Preventing such a problem in the first place is a much better approach, one fully endorsed by ACA, as noted in the article above – ‘The Affordable Care Act is transforming more than health insurance. In hospitals around the country, the legislation could transform the way doctors and nurses actually care for patients.

Part of the law is designed to rein in the nation’s exploding health care costs by creating hundreds of little experiments that test new ways for hospitals to save money.’

In other words, ACA fully supports the goal of reducing malpractice by empirically documenting outcomes so as to measure the ‘clinical standards to which physicians are held in the first instance.’

And offering this information in a form which will also benefit patients –

‘One of the major provisions in the Affordable Care Act (ACA) isthe new set of quality ACA reporting standards for all medical facilities. Hospitals, medical centers, outpatient centers, nursing homes, home health agencies, etc. now have to provide yearly reports on their patient outcomes across 44 quality-of-care measurements.

These reports used to be voluntary, and technically still are, but refusal to participate in this program could cost a facility their Medicare/Medicaid reimbursements. For the vast majority of medical facilities, that’s not much of a choice.

In the past, patient outcome information was tightly guarded by hospitals, especially if it wasn’t good news. A few consumer groups gathered together what data they could, and put out annual hospital rankings. However, under the ACA, all participating medical facilities have to submit their yearly reports to the DHHS, and that information is about to become much more public on the DHHS’s website, Healthcare.gov’ http://www.capturebilling.com/new-quality-aca-reporting-standards/

dan1111 January 28, 2014 at 4:12 am

Your argument would be much stronger if you did not start out by outrageously claiming that a general call for changing clinical standards is “unqualified support for the ACA”.

prior_approval January 28, 2014 at 2:03 pm

‘“unqualified support for the ACA”.’

Would you prefer support based on what ACA actually requires, then?

dan1111 January 29, 2014 at 4:18 am

Huh? I would prefer you not making silly claims based on superficial similarity:

The author supports “changing clinical standards.” The ACA changes clinical standards. Therefore the author supports the ACA.

You really don’t see anything wrong with that logic?

We live in interesting times January 28, 2014 at 12:00 pm

It’s my understanding it’s not just Medicare and Medicaid doctors being “incentivized” to send their patients’ private medical information to Uncle Sam. I’m doing what I can to stop it. Just waiting on the IRS audit.

Chip January 28, 2014 at 4:14 am

The NHS in the UK has fully bureaucratized health care with targets, checklists and a hemorage of money, but it’s still dire, with 5 year cancer survival rates of 50% compared to the US’s 65%.

And before you argue that the ACA isn’t the NHS. Cue the tape on Obama appointee to head the CMS, which overesees hundreds of billions in medical spending.

“I’m romantic about the NHS. I love it.”

- Donald Berwick

dearieme January 28, 2014 at 9:18 am

Cancer survival rates are intrinsically dodgy statistics. I suggest you find a better stick to poke the NHS with; there must be quite a few available.

Jon January 28, 2014 at 10:47 am

To clarify why: If you diagnose more cancers that would never kill someone (e.g. many prostate and some breast), your 5 year survival rate goes up. If you diagnose a cancer earlier, but can’t really improve the survival, the 5 year survival rate goes up.

That said, one would expect that on average more aggressive treatments would have a net positive impact on survival rates; though the economic benefit and quality of life benefit may be much smaller than those of other expenditures.

We live in interesting times January 28, 2014 at 11:53 am

Back in I think it was 2002, one of the British newspapers did a story on cancer survival rates comparing the US and most European countries and also broke it down male/female. Maybe they chose 3-4 common cancers, my memory is hazy. America had the best survival rate overall. I would hope the methodology has improved since then.

But in the spirit of post, maybe one of the items on the list could be:

If your patient is allowed water, is their jug filled and when was the last time the patient had a drink?

Since NHS patients were dying of dehydration.

Pshrnk January 28, 2014 at 6:44 pm

“That said, one would expect” Yeah….sure

Marian Kechlibar January 28, 2014 at 7:40 am

It certainly does lead to overuse of antibiotics – very bad.

Ray Lopez January 28, 2014 at 8:43 am

“We contend that this limited independent role for medical liability may be a reflection upon the structural nature of the present system of liability rules, which largely hold physicians to standards determined according to industry customs”
- aha, this is the fly in the ointment of this flawed study. The study fails to account for how physicians performing medical care “according to industry customs” drives up health care costs–the proverbial “excessive diagnosis to prevent a lawsuit” that US doctors are famous for.

Another flawed econ study rebutted by Ray Lopez, case closed.

RPLong January 28, 2014 at 9:31 am

The call for malpractice reform always struck me as a bizarre way to tackle health care costs. Why on earth would we want to impede consumers’ abilities to hold suppliers responsible for a bad product or service? Why would anyone think that would help? We want fewer barriers to market signals, not more.

Willitts January 28, 2014 at 10:32 am

Agree. It seems to me an awkward appeal to pathos; the visceral and sometimes deserved hatred for lawyers.

If we credit the proponents with slightly more integrity, perhaps they consider it an easy fix albeit not particularly helpful.

However, I can imagine that lawsuits and the threats thereof can filter through the entire medical system. Even random losses have to be insured against. And once a certain practice or chain of events succeeds or fails in court, the profession would herd away from or toward the legally safe procedures.

The Anti-Gnostic January 28, 2014 at 11:52 am

The tort system is A voting on whether to give B’s money to C. Then we tell A he can give whatever he wants in pain and suffering.

If we are going to socialize medical care, the tort system will have to be scaled way, way back.

Pshrnk January 28, 2014 at 6:46 pm

Well the tort system as you describe it is Democratic Socialism so…

The Anti-Gnostic January 29, 2014 at 1:32 am

You can have a compensation system or you can have a tort system; you can’t afford both. No country that socializes medical care has anything resembling our tort system.

RPLong January 29, 2014 at 10:20 am

That’s a strong claim – but is it true? Can you define what you mean by “anything resembling,” and then use that definition to rule out a few expected examples (e.g. UK, Canada, Australia, New Zealand, etc.)?

The Anti-Gnostic January 31, 2014 at 8:13 am

The other Anglophone countries cap non-pecuniary damages and have no-fault auto liability. And loser-pays attorney fees. This is in recognition that a country which socializes its medical costs cannot afford juries handing out arbitrary pain and suffering awards and plaintiffs getting attorney referrals to doctors who take a pecuniary interest in the litigation. Here’s a paper on Canada.

dan1111 January 28, 2014 at 12:18 pm

The reason many of us want malpractice reform is that we don’t believe lawsuits are mainly “hold[ing] suppliers responsible for a bad product or service”. A large percentage of them are randomly extracting money from people/organizations who did nothing wrong.

The belief is that this greatly raises costs, not only through the direct cost of lawsuits, but all the money organizations spend on trying to avoid lawsuits, including things like unnecessary tests just to cover their backs. You have to weight whatever “accountability” benefit there is against the costs imposed.

Further, people are calling for reform, not elimination of the ability to sue. We want to reduce frivolous lawsuits, thus making it a more effective accountability measure.

RPLong January 28, 2014 at 1:06 pm

Think about it, though: How do we determine which lawsuits are frivolous until we consider the merits of the case?

Vivian Darkbloom January 28, 2014 at 1:14 pm

Exactly why so many frivolous suits are settled before trial.

RPLong January 28, 2014 at 3:03 pm

Same question to you, Vivian – How do you know the suits are frivolous if the parties reach a settlement?

I’m not trying to be thick. I know what you’re saying, and I know it happens. The question is not whether it happens, but whether trying to eliminate it doesn’t also eliminate with it a significant number of cases that are not at all frivolous and ought to be settled or tried.

Vivian Darkbloom January 28, 2014 at 3:21 pm

People who settle lawsuits *are* considering the merits of the case. But, they are also considering the costs of litigation which have little to do with “the merits”.

One solution to the conundrum is to require plaintiffs who fail to establish the merits of their case at trial to pay attorney fees of the defendant and other costs (complying with discovery, etc). But, here, the bar for “frivolity” is set frivolously high and RP Long would probably frivolously argue that such a rule would discourage plaintiffs from attempting to “prove the merits of their cases”.

RPLong January 28, 2014 at 4:18 pm

Well, all I’m saying is that it would obviously stack the deck against low-income plaintiffs for whom the risk of losing in court is prohibitively high.

Marie January 28, 2014 at 7:01 pm

RPLong,

I’d be pretty curious to know how many low-income plaintiffs there actually are. I think the general perception (which may be correct for all I know) is that poor people grab an ambulance chasing lawyer to get bucks out of doctors’ insurance companies.

But I’m guessing the barriers are already such that the truly low-income folks who have time and energy consuming medical conditions don’t have resources to do a lot of suing.

dan1111 January 29, 2014 at 4:23 am

@RPLong, the legal framework can make a better or worse environment for frivolous lawsuits to flourish.

RPLong January 29, 2014 at 10:21 am

Agreed, but the devil is in the details. I am obviously in favor of anything that reliably eliminates frivolous things without compromising any of the things that are not frivolous – as indeed we all are.

mpowell January 28, 2014 at 3:08 pm

But that belief has been tested by states like CA. Turns out capping damages does nothing to lower insurance costs. Unless you have a better proposal nothing on the table offer the benefits you imply.

Anecdotal Evidence Marie January 28, 2014 at 10:10 am

Hey, everybody with a family income of, say, $100,000 or less!

Raise your hand if you’ve ever had or known someone in the same situation who has had an interaction with the health care system where a serious mistake was made and a serious bad outcome resulted! Wow, look at all those hands! Mine are both up!

Now keep your hand up if a medical lawsuit resulted, with a win, and an improvement in the situation!
Anyone?

lxm January 28, 2014 at 8:01 pm

This article argues that due to the difficulty of bringing cases most injured parties never get redress for their injuries. http://www.propublica.org/article/ten-patient-stories-when-attorneys-refused-my-medical-malpractice-case

In other words hospitals and doctors get a free pass. Therefore, there is no reason to think malpractice suits will improve care.

Marie January 28, 2014 at 8:36 pm

That is a very informative article.

Whether or not suits punish good doctors and drive up costs is secondary to whether suits give us a false sense of security about the safety of our system, which I think they do. They may even be counterproductive, overall.

Jon January 28, 2014 at 10:56 am

The results are not surprising. Are the metrics used in the study primarily driven by the mistakes involved in malpractice cases that cause high pain and suffering or punative awards? One would expect the pain and suffering caps incentives would be applicable in a rather narrow range of situations–where the pain and suffering was significant but the economic damages low or hard to measure.

Certain severe outcomes that have large economic losses (e.g. quadraplegia, especially in a young person) without any pain and suffering.

dead serious January 28, 2014 at 11:42 am

Well, there goes *that* libertarian argument.

I thought we could effectively do away with the FDA and all regulation because tort law would ensure that evil/incompetent medical providers & practitioners would immediately hup to or face the swift and unending rebuke of “the market.”

The Anti-Gnostic January 28, 2014 at 11:55 am

Except it’s not the market. It’s juries backed by a monopoly State. Not that there’s anything wrong with that, but it’s not very (maybe not at all) efficient with a third-party payor in the mix.

uffs January 28, 2014 at 3:58 pm

Liability, fraud, and malpractice laws should all be repealed. It’s just simple logic.

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