May 4, 2011 by matray

side note: Here's an interesting article that I almost missed. It's written by Joanne Doroshow of the Center for Justice & Democracy, and she uses Congressional Budget Office (CBO) numbers to argue that tort reform -- specifically the HEALTH Act being considered in Congress -- would actually increase the deficit as well as add new burdens to state government. When people talk about medical malpractice "reform," they are usually not talking about reducing the epidemic of medical errors in hospitals or instituting proven measures to actually reduce injuries, deaths, claims and lawsuits. No, they're usually talking about making it more difficult for patients injured by medical negligence, including catastrophically-injured children, to be compensated. Despite the enormous hardships on innocent patients caused by these measures, or the fact that they shift compensation burdens onto others, there is an argument circulating that these measures are worth enacting because they will reduce the deficit. Well, no they won't. In fact, they will likely increase it. In October 2009, the Congressional Budget Office (CBO) presented an analysis (in the form of a 7-page letter to Senator Hatch) on "the effects of proposals to limit costs related to medical malpractice ('tort reform')," finding that "tort reform could affect costs for health care." CBO said that even if the country enacted the entire menu of extreme tort restrictions listed, including a Draconian $250,000 cap on non-economic damages, it could go no further than to find an extremely small percentage of health care savings, "about 0.5 percent or $11 billion a year at the current level -- far lower than advocates have estimated." On March 10, 2011, CBO provided a new analysis of H.R. 5, a bill before Congress that is considering these measures. CBO now says that enacting H.R. 5 would reduce total health care spending even less -- 0.4 percent. Yet to find even this small amount, CBO ignored factors that would not only lower this figure but also likely increase the deficit. For example, CBO acknowledges but does not consider in its cost calculations the fact that these kinds of extreme "tort reforms" would weaken the deterrent potential of the tort system, with accompanying increases in cost and physician utilization inherent in caring for newly maimed patients. CBO notes, "The system has twin objectives: deterring negligent behavior on the part of providers and compensating claimants for their losses ..." In fact, CBO wrote, "imposing limits on [the right to sue for damages] might be expected to have a negative impact on health outcomes." Yet it brushed aside the fiscal impact of this not because it is untrue, but because there are too few studies on the topic. However, of the three studies that address the issue of mortality, CBO notes that one study finds such tort restrictions would lead to a .2 percent increase in the nation's overall death rate. If true, that would be more than 4,000 additional Americans killed every year by medical malpractice, let alone the hundreds of thousands of additional patients injured. How could this possibly be an acceptable trade-off? Ten years ago, the Institute of Medicine put the costs of medical errors at between "$17 billion and $29 billion." Nowhere does CBO consider those costs, let alone the additional costs of caring for these newly-maimed patients as a result of new liability limits There will be new burdens on Medicaid and Medicare, as well, none of which were considered by CBO. If someone is brain damaged, mutilated or rendered paraplegic as a result of the medical negligence but cannot obtain compensation from the culpable party through the tort system, he or she may be forced to turn elsewhere for compensation, like Medicaid and Medicare. None of these increased costs are considered. What's more, whenever there is a successful medical malpractice lawsuit, Medicare and Medicaid can both claim either liens or subrogation interests in whatever the patient recovers, reimbursing the government for some of the patients' health care expenditures. Without the lawsuit, Medicare and Medicaid will lose funds that the government would otherwise be able to recoup. Again, none of these lost funds are factored in by the CBO. After CBO issued its original October 9, 2009 letter, members of the CBO staff agreed to meet with me and a panel of experts to discuss these issues. Among the things I learned at this meeting were: * It may be true that liability restrictions will create new burdens on state and federal deficits since the costs of injuries are not eliminated by enacting "tort reform," but merely shifted onto someone else -- including the government. However, no good study had yet been done on this phenomenon and according to CBO, if a study doesn't exist about a problem, it need not consider it even though savings could be significantly less than what they say. * Also, CBO arrived at these numbers by plugging selective studies into CBO's internal econometric models that no one ever sees. For example, I specifically asked how CBO could find a 0.2 percent savings due to lower medical malpractice insurance rates for doctors, when years of historical experience show this to be untrue. When Senator Jay Rockefeller (D-WV) asked CBO for a "complete empirical analysis of the cost savings associated with medical malpractice reforms," CBO's response was another seven-page letter. No empirical analysis, no econometric models, no data. continue reading

April 20, 2011 by matray

side note: Is a hospital-focused healthcare system the future of American Medicine? And if so, what are the liability implications? This is a great look at what looks to be the future of healthcare delivery in the United States. Physician-owned and operated medical practices appear to be going the way of the dodo. Across the U.S., hospital systems are buying out private medical practices at a rapid pace. Between 2005 and 2008, the percentage of medical practices owned by hospitals soared from 25.6% to 49.5% according to the Medical Group Management Association’s 2008 Physician Compensation and Production Survey (http://www.mgma.com). In 2010, for the first time, the number of new physicians who joined hospital-owned practices exceeded the number of first-year practitioners who became employees of medical groups owned and operated by physicians. Smaller physician practices are struggling under the strains of the recession and a rapidly evolving regulatory climate. Facing reductions in government reimbursements, an increase in the number of patients who are unable to afford their medical bills, uncertainty over the health care reform law, and the impending expense of the federal government’s urging providers to purchase electronic health records systems, many physicians in private practice are succumbing to hospital systems’ offers of economic certainty, reduced hours and therefore better quality of life, more resources, and the ability to devote more of their time to patient care. Hospital systems are on a private practice buying binge in anticipation of health care reform and the resulting need for an increased supply of doctors as more people obtain health insurance and seek primary care. Financial incentives created in the reimbursement scheme also support an integration of primary care physicians and hospitals. For example, the payment system for hospitals incentivizes efficiency because payment amounts are based on diagnosis codes, not necessarily the duration and scope of a hospitalization; however, the fee-for-service payment system for physicians does not necessarily induce the same amount of prudence. Hospitals have an improved ability to eliminate duplicative tests and provide patients with faster care where they control the physicians managing that care. Saying Goodbye to Private Medical Practices: Pros and Cons from a Liability Perspective • Impact of Electronic Health Record Systems On the advent of electronic health records systems’ major role in healthcare management, physicians and hospital risk managers need to remain cognizant of the threat of lawsuits, the importance of documentation in medical claims, and practice thorough and defensive documentation. Plaintiffs’ lawyers are seizing the opportunity provided by the rapid adoption of electronic health records systems – along with the associated risks and challenges – to argue that doctors are letting these electronic systems perform the evaluating and thinking in lieu of the physician’s more thorough clinical analysis. (more…)

April 7, 2011 by matray

Declaring New York State “functionally bankrupt” in February, newly-elected Gov. Andrew Cuomo proposed a $132.9 billion budget that would reduce year-to-year spending for the first time in more than a decade. Key to his proposal was slashing the state’s projected healthcare spending, specifically cutting $2.85 billion in Medicaid funding for this fiscal year and $4.6 billion in the 2012-13 budget. New York has the most expensive Medicaid system in the nation, currently serving one in four New Yorkers and costing more than twice the national per capita average. In order to cleanse New York’s Medicaid program of inefficiencies and waste, Cuomo appointed a Medicaid Redesign Task Force in January of 2011, which consisted of lawmakers as well as representatives of labor and healthcare interests. The task force issued 79 recommendations for the approval of the Governor and Legislature. The recommendations included establishing a $250,000 cap on non-economic damages in cases of medical malpractice as well as creating a Neurologically Impaired Infant Medical Indemnity Fund to compensate brain-damaged infants. “This comprehensive and consensus proposal achieves the dramatic reform this state needs to reduce costs without jeopardizing patient care,” Cuomo said. “This approach was not about making cuts but redesigning a program whose costs are unsustainable.” The unexpected endorsement of a non-economic damage cap by a governor from the Democratic Party elicited immediate condemnation from patient-rights advocacy groups and the New York State Bar Association, which testified that capping damages would “unjustly discriminate against accident victims who suffer the most devastating physical and psychological losses.” The Cuomo Administration countered that the $250,000 cap on non-economic damages is necessary to improve the predictability of future awards and settlements, decreasing the cost of medical professional liability insurance for the state’s physicians and hospital system, which would help them better adjust to other cuts in the Medicaid system. “Gov. Cuomo’s proposal reflects the fact that preserving quality and access in medicine, while reducing cost, will require fairness in the civil justice system,” said Cecil Wilson, MD, president of the American Medical Association, in support of the governor’s push for tort reform. “Every dollar spent on the broken medical liability system is a dollar that cannot be used to improve patient care.” After a month-long, often-contentious debate that pitted Gov. Cuomo’s office and the Republican-controlled State Senate against the State Assembly’s Democratic-majority, the parties ultimately announced an agreement for the 2011-2012 budget that excluded any cap on non-economic damages. The plan to create an indemnity fund for neurologically injured infants, however, did remain in the budget.

March 29, 2011 by matray

side note: Here is an article that shows the conflict of interest that is inherent in our current system of medical liability, and outlines a reform idea worth closer inspection. While sovereign immunity is doubtful, it is an academic argument worth exploring. It's been a year since health care reform was signed into law, and since then both Republicans and Democrats have been trying to address one item it left out: medical malpractice reform. In last month’s budget proposal, the Obama administration offered a solution: a plan to encourage evidence-based medicine by limiting the malpractice liability of doctors who follow clinical practice guidelines — in effect, granting them immunity. Doctors love this proposal, and patients should too: When doctors follow good guidelines they are less likely to order too many or too few tests or to prescribe the wrong treatment. Unfortunately, the proposal will not achieve the noble goal of providing quality care at a reasonable cost because the current guidelines, written by nonprofit medical groups and for-profit insurance companies, are not good enough. First, they often conflict with one another. Recommendations for when and how frequently to give women mammograms, for instance, notoriously vary depending on which group is giving them. In addition, there are conflicts of interest. Guidelines produced by insurance companies sometimes put their interests first. Malpractice insurers, for example, may recommend yearly mammograms, even if they are not necessary, because they bear the costs of lawsuits for late diagnoses of breast cancer — and not the costs or health risks of the extra mammograms. Moreover, the nonprofit groups behind many other guidelines have traditionally depended on pharmaceutical and medical device companies to finance their work. Last year, the Council of Medical Specialty Societies issued a new code of conduct seeking to stop these industries from sponsoring the development of guidelines, but there are still too many loopholes, and thousands of guidelines produced before the reform are still in circulation. Most troubling of all is that the groups behind the guidelines bear no liability for producing bad ones. No matter how poor the care they prescribe, it is the doctors who depend on them who are punished. Mr. Obama’s proposal to limit the liability of doctors who follow these flawed guidelines (included in a $250-million plan for overhauling states’ malpractice systems) is clearly not the way to better care. Immunity is a good idea. It’s just that we need to create the incentives necessary for the production of optimal guidelines first. This is no secret — last week the Institute of Medicine put out a report listing new standards for promulgating guidelines. I was a consultant on the report, which goes a long way toward improving the system, but I worry about the extent to which these standards will be followed. I have a different proposal for improving the guidelines: Instead of nonprofit groups producing free guidelines, or insurance companies producing ones that serve their own interests, the government should require health care providers to buy or license guidelines from what I call private regulators, for-profit companies with expertise in evidence-based medicine. Doctors would have immunity from malpractice cases if they followed the guidelines. However, the private regulators themselves would be liable if their guidelines were found to deviate from optimal care. The profit-seeking forces of the market on the one hand and legal accountability on the other would help private regulators strike the right balance between patient safety and cost of care. Private regulators would discourage the overuse of expensive medical procedures because doctors, under pressure from insurance companies to keep costs low, would be unlikely to invest in guidelines recommending unnecessary procedures. But if the guideline-makers failed to recommend an appropriate procedure, they’d be held responsible for the patient’s health. Just as they can now, doctors could deviate from the guidelines when required. Their discretion and autonomy would be preserved. But in most cases, when guidelines apply, doctors could follow them without having to worry about being held liable, and more important, about getting bad advice. Such a system may not be too far off: medicine is already moving toward for-profit guidelines. UpToDate, First Consult and eMedicine are just a few new databases compiled by for-profit companies in the business of making technical, evidence-based medicine more accessible to doctors. This is certainly exciting, but to provide doctors with the peace of mind they deserve, these companies need to be held accountable for the advice they give. continue reading

March 16, 2011 by matray

side note: Right now, Wisconsin is ground zero in the labor rights fight, but the villain Gov. Scott Walker pushed through a tort reform measure during an emergency session he called during his first week in office. Below is a synopsis by the Wisconsin Trial Bar of the tort reform law and its implications. Amendments to Wis. Stat. section 802.05, which sets out the procedure for challenging pleadings as frivolous and for imposing sanctions, remove judges’ discretion to impose sanctions after the safe-harbor period expires. Attorney Timothy Edwards warns those facing such a challenge to cure the offending pleading within 21 days. If this deadline is missed, the judge must impose sanctions, consisting of all actual costs resulting from the conduct – including attorney fees. March 16, 2011 – Gov. Scott Walker signed into law his “tort reform” bill, 2011 Senate Bill 1, on Jan. 27, 2011. This bill made significant changes to Wisconsin law relevant to tort litigation. One of the laws the bill changed was Wis. Stat. section 802.05, which allows and requires a court to impose damages for frivolous claims and defenses. Designed as Wisconsin’s counterpart to Federal Rule of Civil Procedure 11, section 802.05 lays out the procedure for challenging pleadings as frivolous and allows for the imposition of sanctions against a party, and its lawyer, for filing a frivolous pleading. This article explores the changes to this statute made by recent legislation. Historical version Section 802.05 was initially adopted as a court rule regulating pleading, practice, and procedure. In 2005, the Wisconsin Supreme Court adopted the 1993 revisions to federal rule 11 and incorporated them into Wis. Stat. section 802.05(3).1 These revisions abrogated the old requirement that upon a finding of frivolousness, a judge “shall award” costs and reasonable attorney fees. “Shall award” became “may impose an appropriate sanction,” which must be “limited to what is sufficient to deter repetition of such conduct or comparable conduct by others similarly situated.”2 The court held open hearings on this move from mandatory to discretionary sanctions, including testimony from State Bar members expressing concerns about the chilling effect that mandatory sanctions would have on creative, zealous advocacy. The amendments to section 802.05 made another important change: they added a “safe-harbor” notice provision. When a party challenges an opposing party’s conduct, it must first serve its motion for sanctions on the party whose pleadings are being challenged, along with a safe-harbor letter that gives the opposing party 21 days in which to withdraw the challenged pleading. If the pleading is not withdrawn, then the party challenging the pleading can file the motion and ask the court to impose sanctions. So viewed, a safe-harbor letter and accompanying motion is a statutory prerequisite to the later filing of a motion for sanctions pursuant to section 802.05. 2011 amendment The newly amended version of section 802.05 retains the basic steps in the procedure for challenging frivolous pleadings. A party can bring a motion to request a determination on whether another party has initiated, maintained, or continued a frivolous action. The court also may enter an order on its own initiative based on conduct that appears to violate the rule against frivolousness. The safe-harbor period remains 21 days. The most significant change made by the 2011 legislation was to remove the discretion of judges to impose sanctions after the safe-harbor period expires. Now, if a judge finds by clear and convincing evidence that a party has filed or pursued a frivolous pleading, the judge must exercise his or her discretion to impose sanctions if a party cures the offending pleading within 21 days of receiving the safe-harbor letter. In addition, now the judge must award sanctions if the offending party does not cure the offending pleading within 21 days of receiving the safe-harbor letter. Such sanctions include all actual costs resulting from the conduct, including reasonable attorney fees. The new version of section 802.05 also applies to appeals. If an award of costs for violating these provisions is affirmed on appeal, the appellate court must send the action to the lower court to award actual attorney fees for defending the appeal to the successful party. An appeal is frivolous “in its entirety” if “any element necessary to succeed is supported solely by an argument that is [frivolous].” This new law applies to actions filed on or after the act’s effective date of Feb. 1, 2011. However, because the rule is procedural, it may be applied retroactively.3 Summary The new amendments to section 802.05 raise the stakes for potentially frivolous actions, and remove some of the discretion afforded to judges in applying the rule. The most significant change is the directive that circuit courts must impose sanctions following a finding of frivolousness if the 21-day safe-harbor period has expired. The added discretion to impose sanctions within the 21-day safe harbor period, and the mandatory imposition of fees and costs against a party who unsuccessfully appeals an adverse finding of frivolousness, provide additional strength to Wisconsin’s prohibition against frivolous pleadings. Time will only tell whether these new directives will deter the pursuit of frivolous claims and defenses, as intended, or chill the pursuit of legitimate, creative claims that would otherwise vindicate important client interests. see original

March 7, 2011 by matray

side note: With all the cost-cutting that is proposed at both federal and state levels, this is an especially prescient report. As the healthcare industry, employers and government officials seek to control the growth of health spending, new efforts are needed to develop and refine quality-of-care and other performance measures that can assure changes will improve medical care and do not harm patients, according to a new study by RAND Health, the nation's largest independent health policy research program. While some current quality measurement tools may be useful to new performance-based payment models, significant work is needed to design and test methods which can be applied to measuring the quality of care provided under innovative payment reforms, according to the report. “Insurers and purchasers of healthcare in the United States are on the verge of potentially revolutionary changes in the approaches used to pay for healthcare," said Eric Schneider, MD, the study’s lead author and a senior natural scientist at RAND. “A significant investment is needed to develop new performance measures that can assure high quality care as the United States experiments with these new payment models.” The RAND report studied 90 payment reform programs and identified 11 general payment reform models that reward providers for delivering better-quality, cost-conscious care or pay healthcare providers a fixed amount to coordinate treatment of an illness such as diabetes. Since at least the 1980s, the traditional fee-for-service model of healthcare payment has been challenged by reforms that alter payment methods in order to limit costs. Critics say that the persistent use of fee-for-service—where health providers are rewarded only when they provide more care—encourages unnecessary health care spending without enhancing quality or efficiency. The Patient Protection and Affordable Care Act of 2010 has given new impetus to payment reforms that can achieve both cost containment and improvements in healthcare quality. Most of the new approaches are expected to tame costs by reversing incentives to deliver more care. Instead they create incentives to providers and patients to weigh the costs of their medical choices. But some worry that if providers are at financial risk, these payment models may have mixed consequences for quality. Quality measurement should be used to assure that the financial incentives produce high quality cost-conscious care. The study, "Payment Reform: Analysis of Models & Performance Measurement Implications," is available at www.rand.org.

March 3, 2011 by matray

On Feb. 10, Representatives Bob Good-latte and Dan Boren announced the creation of a bipartisan legal reform caucus, the Congressional Civil Justice Caucus. Goodlatte and Boren will serve as co-chairs of the newly formed caucus. According to the congressmen, the Congressional Civil Justice Caucus will serve as a forum for discussing and debating the many legal reform issues affecting the civil justice system, including medical malpractice reform, venue reform, patent reform and federal pleading standards. “Our nation’s civil justice system has a direct impact on America’s competitiveness in the global marketplace,” said Goodlatte. “Excessive and frivolous litigation and inefficient rules and procedures drain U.S. companies of desperately needed resources and hinder job growth and innovation.” The congressmen claim that recent estimates indicate that the cost of the U.S. tort liability system, as a percentage of gross domestic product, is more than double the average cost of any other industrialized nation and that America’s businesses and citizens alike need a well-functioning civil justice system that provides for the efficient and timely redress of legitimate disputes without allowing opportunistic parties to game the system. The goals of the Congressional Civil Justice Caucus include strengthening our civil justice system and advancing the United States’ leadership in innovation, job creation and economic growth; advancing the public’s understanding of how civil justice issues affect the free enterprise system as well as America’s global competitiveness; and providing a bipartisan forum for discussion and debate of policy issues related to our nation’s civil justice system. “I look forward to working with my colleague, Congressman Goodlatte, to promote a civil justice system that respects the rule of law while allowing for the type of innovation, economic growth, and free enterprise that makes the United States a leader in global competitiveness,” said Boren. “By providing a bipartisan forum for the discussion, we hope to help educate Members of Congress, staff and the public on policy issues related to our nation’s civil justice system.” The U.S. Chamber of Commerce has wholeheartedly endorsed the caucus, offering its aid in making “our nation’s overall civil legal system simpler, fairer and faster for all participants.” “According to the respected actuarial firm of Towers Watson, the costs associated with our tort system alone were $248.1 billion in 2009, which translates into a cost of $808 per person,” said Lisa A. Rickard, president of the U.S. Chamber Institute for Legal Reform, an affiliate of the U.S. Chamber of Commerce. “The system encourages gamesmanship, is incredibly inefficient and often results in inadequate compensation to those truly injured due to the transaction costs associated with litigation.” The Civil Justice Caucus also received the endorsement of the Law & Economics Center at George Mason University School of Law, which formed the Congressional Civil Justice Caucus Academy to provide education programs on civil justice issues. Of course, less optimistic observers noted that reform would be a difficult political venture. “Anything Congress passes not only has to go through the gauntlet of Senate Majority Leader Harry Reid, but must be signed by President Obama, who has shown no stomach for meaningful liability reform, and whose administration has taken several anti-jobs positions to benefit trial lawyers," said Ted Frank, founder of the Center for Class Action Fairness as well as a writer at Overlawyered.com and the Manhattan Institute's PointofLaw.com. In addition to co-chairs Goodlatte and Boren, Representatives Lamar Smith, Trent Franks, Jim Matheson and Collin Peterson serve as founding members of the Congressional Civil Justice Caucus.

March 2, 2011 by matray

side note: If this isn't a strong argument that New York's medical liability climate threatens access to care, I do not know what would be. A malpractice insurance company has threatened not to renew coverage for eight Bronx obstetricians who treat poor, high-risk patients. The New York Times reports that Medical Liability Mutual Insurance Company issued the warning in a letter last month. It went out to eight of 13 obstetricians at Bronx-Lebanon Hospital Center. The hospital delivers about 2,700 babies a year. Many of the patients are teenagers or have diabetes, high blood pressure or other medical problems. The letter cited a “method of practice” among the doctors that made them “an unreasonable burden” to other policyholders. It did not specify how many times each doctor had been sued. The hospital said its services compare favorably with other hospitals. continue reading

March 1, 2011 by matray

side note: Here's an unusual piece of politics. The Democratic Governor of New York, Andrew Cuomo, is proposing malpractice damage caps to heal the state's economic woes. With the intention of re-structuring New York’s Medicaid system, Governor Cuomo is urging various changes to how medical malpractice suits are resolved. Primarily, he wishes to limit awards at $250,000 per case, explaining this change alone may save upwards of $200 million in the following year. However, Sheldon Silver, Assembly Speaker, believes this change to be unnecessary and is working to block it from occurring. Officials believe it will be resolved, but the methods and the duration at which it may take are yet to be known. side note: Here is an unusual turn in politics. Democratic NY Gov. Cuomo is proposing a cap on damages to help the state's budget woe Many advocates of the new change explain that often times, lawsuits are extremely out of control and award much more money than could be justified by the damages. The proposed change by Cuomo looks to benefit the overall financial situation of the state, potentially resolving the severe budget issues that currently exist. continue reading

February 22, 2011 by matray

side note: Uh-oh! Is the Commissioner cracking the whip on out-of-control medical professional liability insurance rates? Or is he off-base, and rates are where they should be in California? Insurance Commissioner Dave Jones today contacted several medical malpractice insurers raising concerns about excessive rates and asking that they make a rate filing with the California Department of Insurance (CDI) to reduce their rates. "Unlike health insurance, where I do not have the authority to reject excessive rates, the Insurance Commissioner does have the authority to regulate the rates of medical malpractice insurance paid for by doctors, surgeons, clinics and other health providers," Commissioner Jones said. "We have found that recent loss ratios - the percentage of every premium dollar the insurer spends on claims - of many medical malpractice insurers are low, and that's why I have directed my staff to carefully examine the rates of medical malpractice insurers. Low loss ratios are one indication that premiums may be too high." The authority to regulate medical malpractice insurance rates comes from provisions of law put into place by Proposition 103 in 1988. The Proposition 103 provisions include a mandate that insurers apply to the Insurance Commissioner for prior approval of rates and prohibit the use of excessive rates. Historically, this authority has been used to reduce medical malpractice rate increases and in some cases to require additional decreases in medical malpractice rates. The success CDI has had with regulating medical malpractice rates is another example of the benefits of strict rate regulation requirements. The provisions of Proposition 103 apply to most property-casualty coverages including personal auto and homeowners but do not apply to health insurance rates. For those medical malpractice insurers where CDI has reason to believe the rates are excessive, the insurer will be required to make a rate filing with the Department, after which, the Department will conduct a review to evaluate the filing and approve a rate level that complies with the law.