Home Feature A novel solution for an ailing medical liability system

A novel solution for an ailing medical liability system

June 2004

Published in the June/July 2004 issue of Today’s Hospitalist

If it’s broken, fix it. If it can’t be fixed, scrap it and replace it with something that does work. In a nutshell, that’s what Harvard researcher Troyen Brennan, MD, JD, had to say about the current medical malpractice model of compensating patients for medical injury.

Speaking to a standing-room-only crowd at the Society of Hospital Medicine annual meeting in New Orleans, Dr. Brennan reiterated his decade-long mantra: The current tort system should be replaced with a no-fault scheme that would not only compensate more injured patients more fairly, but also propel the patient safety improvements, error reporting and analysis that have been largely stymied by fear of litigation.

“We have to identify ways to improve the accuracy of tort litigation or replace it,” said Dr. Brennan, professor of medicine and law at Harvard. “What we propose is a no-fault system that gets away from the identification of negligent injuries and toward avoidable injuries.”

The current system not only fails to compensate the vast majority of injured patients, Dr. Brennan explained, but it is also flawed economically and ethically. Only one in six injured patients receives any compensation, he said, and a disproportionate amount of the jury awards that do move forward goes to plaintiff’s attorneys.

The system also fails to advance the interests of patients or patient safety as a whole because it drives reporting underground out of fear of litigation. And, as research has shown, Dr. Brennan noted, malpractice suits neither prevent nor deter physicians from making the same error again.

“I think most physicians will not go and tell the (injured) patient that he should sue and take advantage of the compensation system that is medical malpractice. Isn’t that “¦ the kind of situation that should be intolerable, where we’ve set up a compensation scheme we’re afraid to tell people to take advantage of?” Dr. Brennan asked. “It sort of sells out our ethical responsibility to these individual patients.”

A novel approach

The proposed system, which would be modeled on a system used in Sweden, is based on the principle of avoidability. In essence, patients who incur treatment-associated injuries that might have been avoided and who experience disability would be entitled to compensation in a sum determined by an administrative review board.

The Swedish system has compensated 130,000 patients over the last two decades. During that time, Dr. Brennan explained, solid criteria have been developed to determine which injuries are “compensable events” and which aren’t.

Perhaps most importantly, the Swedish system hasn’t broken the bank. “People are concerned because they think the system might be very costly,” he said. “But you can make it affordable.”

In a pilot project conducted in hospitals in Utah and Colorado that was based in part on the Swedish model, Dr. Brennan and his Harvard colleague David Studdert determined that the no-fault system would be no more expensive than the current malpractice arrangement.

Under a hypothetical model based on 1992 tort data from Colorado, a no-fault system that compensated adverse events would cost $95 million. By comparison, actual tort costs that year were roughly $100 million.

“It shows that you can do this within the ballpark,” Dr. Brennan said. “Basically, what we’re proposing would move [the compensation system] away from a negligence determination toward a system that’s based on compensable events.”

The system envisioned by Dr. Brennan and Mr. Studdert, first described in the July 11, 2001, issue of the Journal of the American Medical Association, takes the Swedish concept a bit further by incorporating mandatory reporting of injuries to patients. In Sweden, doctors report avoidable injuries in an estimated 80 percent to 90 percent of cases.

In the system being proposed by Dr. Brennan and Mr. Studdert, patients (or their families) would be informed of the error. A compensation analysis would then be performed based on the severity of the injury and the degree of disability.

The no-fault scheme has two novel aspects. First, it embraces the concept of enterprise liability, and it calls for root-cause analysis of errors and subsequent inclusion of those analyses in state databases. Ultimately, those reports would be pooled in a national database and used to identify risk factors and adverse events as well as opportunities for safety improvement.

The enterprise liability model, which essentially integrates physicians and hospitals for the purpose of ascribing liability for injuries, represents the way care is delivered better than the current malpractice model, Dr. Brennan said.

“We can’t solve this problem by hammering the hospitals individually or the doctors individually,” he explained. “It’s a system of care, so the enterprise ought to be held responsible.”

In the enterprise-liability model, hospitals would pay experience-rated insurance premiums, which would have the effect of spurring safety improvements.

Growing acceptance

A decade ago, Dr. Brennan found a very small audience for his no-fault idea, in part because the issue of medical errors hadn’t made its way into the mainstream. That’s no longer the case.

Since the publication a few years ago of the Institute of Medicine’s “To Err Is Human,” which, ironically, was based on Mr. Studdert and Dr. Brennan’s data, understanding of the prevalence of medical errors has landed squarely on the radar screen of not only the health care industry, but also legislators and the public.

That brings good and bad news for physicians. The heightened awareness has fueled plaintiff’s attorneys’ confidence in the courtroom, and it has surely figured in some of the “mega” malpractice verdicts “some in the tens of millions of dollars “awarded in recent years.

In a sense, however, the good news is that those blockbuster awards are eroding the already shaky underpinnings of the tort-based malpractice system. In effect, they are contributing to the current so-called “malpractice crisis” characterized by skyrocketing premiums and scarce coverage.

As that situation worsens, Dr. Brennan predicted, public policy-makers are likely to warm to a remedy that addresses the inherent flaws of the current system.

“The average politician can understand that if you have a lack of insurers and that there are economic costs associated with that, change is necessary,” he said. “Unfortunately, this tort crisis has to get a bit worse before that (reform) will happen, but I’m much more optimistic than I have been in the last 10 years.”

Some attendees were concerned that trial lawyers would resort to other avenues if the current system were scrapped, possibly seeking to turn malpractice claims into criminal cases. Dr. Brennan, however, said it’s more feasible that a system similar to the worker’s compensation bar would be set up to handle appeals.

Ultimately, whatever reform emerges must be focused more on the long-range benefits of error reporting and analysis, he maintained, and not on the current untenable medical malpractice injury-compensation scheme.

“We can’t make arguments for this type of reform unless it’s closely linked to a significant increase in our efforts to improve patient safety,” he said. “The error prevention part of it is far more important than the fact that we’re going to make the economics of medical practice a little more stable.”

Bonnie Darves is a freelance writer specializing in health care. She is based in Lake Oswego, Ore.