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[answered] Medical Malpractice Law in the United States Prepared for t


Review the Medical Malpractice Policy Brief from The Kaiser Family Foundation. Select at least two alternatives, and offer your own analysis on the Medical Malpractice Reform proposals.??

http://kaiserfamilyfoundation.files.wordpress.com/2013/01/medical-malpractice-law-in-the-united-states-report.pdf?(Links to an external site.)?

Medical Malpractice Law in the United States
Prepared for the Kaiser Family Foundation by: Peter P. Budetti, M.D., J.D., Teresa M. Waters
May 2005


Medical Malpractice Law in the

 

United States Prepared for the Kaiser Family Foundation by:

 

Peter P. Budetti, M.D., J.D.

 

Edward E. and Helen T. Bartlett Foundation Professor of Public Health

 

Chair, Department of Health Administration and Policy

 

College of Public Health

 

University of Oklahoma Health Sciences Center

 

Teresa M. Waters

 

Associate Professor, Department of Preventive Medicine

 

Associate Director, Center for Health Services Research

 

University of Tennessee Health Science Center

 

May 2005 Table of Contents

 

Introduction

 

Medical Malpractice Law and Lawsuits

 

Medical Malpractice Policy Issues

 

Who Evaluates the Adequacy of Care?

 

Expert Witnesses

 

Pre-Trial Screening of Cases

 

Alternative Dispute Resolution

 

How Much Money Should Be Awarded to Plaintiffs or Paid to Lawyers?

 

Limits on Damages

 

Attorney Compensation

 

How Should Damages Be Paid, and by Whom?

 

Joint and Several Liability

 

Lump Sum or Periodic Payments

 

Recoveries from Collateral Sources

 

How Much Time Should People Have to Bring Lawsuits?

 

Statutes of Limitations

 

Newer Proposals for Statutory Reforms of Malpractice Litigation

 

Patient Compensation Funds

 

Aligning Malpractice Law and Patient Safety Concerns

 

Expanding Risk Pools

 

Prudent Physician Standard of Care

 

Enterprise Liability

 

Trends in Medical Malpractice Claims and Payments

 

Total Dollars in Paid Claims

 

Average Claims Payments

 

Number of Paid Claims

 

Average Defense Costs Per Claim

 

Variation Across States

 

Rising Number of Physicians

 

General Inflation and Health Care Inflation

 

Summary and Conclusion

 

This report is not intended to be and should not be considered legal advice. Rather, it is only general information about

 

the law. For legal advice, you should consult an attorney. Introduction

 

Medical malpractice law and insurance have been a very visible focus of

 

attention around the country and in Washington, DC in recent years and on a

 

cyclical basis for decades. In some states, the problems associated with

 

medical malpractice are called a crisis, with health care providers concerned

 

about spikes in malpractice premiums and reductions in the availability of

 

coverage, especially for specialists who treat high-risk patients. Some believe

 

the tort system is at fault, blaming excessive litigation, unreasonably high

 

settlements and judgments, and the encouragement of defensive medical

 

practices; others blame the medical malpractice insurance market. Numerous

 

states have enacted legislation to address various aspects of the malpractice

 

issue. And the Bush Administration has supported legislation (introduced but

 

not as yet enacted) to reduce the amount of litigation and restrict damage

 

awards in medical malpractice lawsuits.

 

This paper provides a brief overview of the issues surrounding medical

 

malpractice law. It begins by briefly describing how medical malpractice law

 

works. Following sections discuss the legal changes that states have made over

 

the past thirty years in response to periodic concerns about rising medical

 

malpractice costs, some newer proposals for changing medical malpractice law,

 

and trend data looking at changes in the number of claims and average and

 

total claims costs. Medical Malpractice Law and Lawsuits

 

Medical malpractice law in this country traditionally has been under the

 

authority of the states, not the federal government. And, unlike many other

 

areas of the law, the framework and legal rules governing malpractice actions

 

were, prior to the last thirty years, largely established through decisions in

 

lawsuits in state courts rather than through statutes enacted by state

 

legislatures. Legal rules established by the courts generally are referred to as

 

?common law.? Because the legal precedents that established the case law in

 

one state have no weight in any other state, the rules for handling medical

 

1 malpractice cases varied from state to state, although many of the principles

 

were similar.

 

Medical malpractice law traces its roots back to 19th Century English common law.1 The law that developed concerning medical malpractice is part

 

of the more general body of law dealing with injuries to people or property,

 

known as ?tort law.? Medical malpractice cases are an example of one

 

particular type of tort, the tort known as ?negligence.? The concept of

 

negligence is that people should be reasonably careful in what they do, and, if

 

they are not, they should be held responsible for the injuries that can be

 

reasonably foreseen as resulting from their negligent conduct.

 

To win a negligence lawsuit involving medical care, the injured person

 

needs to prove that they received substandard medical care that caused their

 

injury. This involves a number of steps. First, a person who is injured during

 

treatment must determine whether or not they have been harmed by

 

inadequate care. Physicians and other providers generally are not legally

 

required to tell their patients that they were hurt by medical care that was not

 

as good as it should have been, so patients who suffer adverse outcomes, or

 

their families, usually must consult with others to make this determination.2

 

Patients who were under the care of multiple health care providers need to

 

determine which, if any, of these providers contributed to their injury, if it is

 

possible to do so. A malpractice lawsuit must be brought within a legally

 

prescribed period, called a ?statute of limitation.? In some states, the period for

 

filing a suit starts when the person is injured, while in other states it does not

 

start until the person knows or reasonably should have known that they had

 

been injured. 1

 

2 See Speiser, Stuart M., et al., American Law of Torts, Vol. 4, Sec. 15.10 (West, 1987). While physicians are not legally compelled to disclose malpractice to their patients, the American Medical Association code of ethics (8.12) requires physicians to inform patients of the

 

facts concerning mistakes or judgments that resulted in significant medical complications. A

 

2001 standard of the Joint Commission on the Accreditation of Health Care Organizations, RI

 

1.2.2, requires similar disclosure on the part of hospitals. 2 Once a person brings a malpractice lawsuit, the person (called the

 

?plaintiff?) must show that they were actually under the care of the physician (or

 

other provider) they are suing -- in other words, that they had established a

 

physician-patient relationship. The concept here is that physicians (or other

 

providers) owe a duty to their patients to use reasonable care and diligence in

 

their treatment, but do not have any duty to care for members of the general

 

public other than their own patients.

 

The next requirement is the heart of a negligence lawsuit: the plaintiff

 

must show that the physician did not provide medical care that met appropriate

 

standards. The standards of care that physicians must meet have changed

 

substantially over time. In earlier cases, doctors were only required to perform

 

as well as other doctors practicing in their home community. More modern

 

cases have moved toward holding physicians to a national standard for

 

physicians practicing under circumstances similar to their own. For example,

 

specialists must practice medicine as well as the average specialist in the same

 

field, no matter where they are located.

 

Even if the physician is shown to have provided substandard care, the

 

plaintiff still must prove that the substandard care caused their injury. In some

 

cases this is not difficult, such as when surgery is performed on the wrong body

 

part. In other cases, showing causation can be quite problematic, such as cases

 

involving severely ill people who might have suffered complications from their

 

disease even with good medical care. Identifying what part of the medical care

 

caused an injury can also be a challenge when many different providers

 

participated in the care, so many courts have special rules to deal with

 

situations where it is not possible to pinpoint the harmful acts, yet it is obvious

 

to a layperson that medical care must have led to the patient?s injury.

 

The final step in a medical malpractice case is establishing how much

 

money should be awarded to a winning plaintiff. A person who wins a

 

malpractice lawsuit has shown that the injury is someone?s fault under the rules

 

of negligence, so the question then becomes how much money is needed to 3 compensate that person for what they have suffered.3 This monetary award is

 

called the ?damages.? The rules for determining damages can be complicated

 

and take into account both actual economic losses, such as lost wages and the

 

costs of future medical care related to the injury, and non-economic losses,

 

such as pain and suffering or the loss of companionship of a spouse or child.

 

As noted below, the value to be placed on non-economic losses has been

 

particularly contentious.

 

During the last three decades of the 20th Century, the traditional reliance

 

on state courts to shape medical malpractice law started to change. As

 

premiums for malpractice insurance climbed sharply, organized medicine

 

began to put pressure on state legislatures to change many of the rules

 

governing malpractice lawsuits that had been created by judges over the

 

previous two centuries. State legislatures have responded to a number of

 

issues concerning the malpractice tort claims system and passed statutes that

 

changed a number of different aspects of malpractice law, some of which had

 

dramatic effects. Those statutes are often referred to as ?tort reforms.? More

 

recently, the United States Congress has also considered legislation that would

 

make federal laws more prominent in medical malpractice cases and would

 

override at least some aspects of state laws. Below we describe a number of

 

the issues that have led to statutory changes, and discuss those changes. 3 From a societal perspective, medical malpractice lawsuits also serve a preventive function by encouraging medical providers to practice in accordance with professional standards. How well

 

the current malpractice system fulfills that role, and whether fear of malpractice action discourages providers from participating in reporting and other systems intended to identify

 

and reduce medical errors, are contentious issues within the overall debate about the

 

appropriateness of the current medical malpractice structure. 4 Medical Malpractice Policy Issues

 

This section identifies some of the areas in which state laws have

 

changed or clarified traditional common law rules for medical malpractice

 

cases, focusing on:

 

-- Who Evaluates the Adequacy of Care?

 

Expert Witnesses

 

Pre-Trial Screening of Cases

 

Alternative Dispute Resolution

 

-- How Much Money Should Be Awarded to Plaintiffs or Paid to Lawyers?

 

Limits on Damages

 

Attorney Compensation

 

-- How Should Damages Be Paid, and by Whom?

 

Joint and Several Liability

 

Lump Sum or Periodic Payments

 

Recoveries from Collateral Sources

 

-- How Much Time Should People Have to Bring Lawsuits?

 

Statutes of Limitations

 

After discussing the areas in which state laws have been modified in

 

recent decades, this section also identifies newer proposals for tort reform, only

 

one of which has actually been adopted, focusing on:

 

-- Patient Compensation Funds

 

-- Aligning Malpractice Law and Patient Safety Concerns

 

-- Expanding Risk Pools

 

-- Prudent Physician Standard of Care

 

-- Enterprise Liability

 

Who Evaluates the Adequacy of Care?

 

Proving that the physician breached the standard of care has been one of

 

the most important and contentious requirements of malpractice actions, since

 

it involves finding fault and placing blame on a particular physician. In

 

5 negligence lawsuits involving everyday matters, the jury generally decides for

 

itself whether the defendant was reasonably careful, but medical malpractice

 

usually requires that medical experts testify about the required standard of care

 

and whether or not the defendant met that standard. Getting experts was

 

somewhat difficult when the standard was a purely local one, since only doctors

 

in that community could testify to the standard and they were reluctant to point

 

fingers at their fellow physicians. It became much easier to bring in outside

 

experts as the standard changed to a more national one, making lawsuits more

 

feasible. In turn, this led to development of the so-called ?professional

 

witness? who travels from courtroom to courtroom to testify in lawsuits. The

 

perception that such itinerant experts will say whatever supports the side of the

 

case that is paying for their testimony has seriously undermined confidence

 

among physicians in the fairness of the negligence system.

 

In response to unease that physicians were being judged by laypersons

 

on juries guided only by ?competing experts,? states have made several types of

 

tort law changes addressing the way that negligence is to be determined.

 

Expert Witnesses. Some states have specific standards for medical

 

experts, requiring that they be of the same specialty as the physician being

 

sued, or that that the experts actually be practicing physicians. An example is

 

a law providing that the expert witness must practice or have training in

 

diagnosing or treating conditions similar to those of the patient and must

 

devote at least 60% of his or her professional time to clinical practice or

 

teaching in their field or specialty.4

 

Pre-Trial Screening of Cases. Another common state response is

 

requiring malpractice cases to be screened by a medical review panel,

 

mediation office, or some other panel or official before the cases go to court.

 

Pre-trial review is intended to identify cases that lack merit (although the

 

lawsuits generally are not precluded from moving forward by such a finding)

 

and to encourage the parties to settle the case without litigation. Some states

 

permit the results of the pretrial review to be admitted as evidence if the case 4 West Virginia Code ?55.7B.7. 6 proceeds to court, while other states do not. Alaska, for example, requires

 

review of filed cases by an expert panel appointed by the court, with the

 

findings admissible at trial.5

 

Alternative Dispute Resolution. A number of states have also established

 

alternatives to going to court, called Alternative Dispute Resolution procedures.

 

For example, some states permit physicians to require that disputes with their

 

patients will be resolved by arbitration rather than by judicial process. Another

 

approach is to make arbitration voluntary, but to enforce arbitration

 

agreements when they are made or at least permit the findings to be introduced

 

into court. Connecticut, for example, does not require malpractice cases to go

 

to arbitration, but if both sides agree to do so, the case will go to a screening

 

panel of one lawyer and two physicians. The panel can make a finding as to

 

whether or not there is any liability; if the decision is unanimous, it is

 

admissible in any subsequent trial.6

 

How Much Money Should Be Awarded to Plaintiffs or Paid to Lawyers?

 

Limits on Damages. Perhaps the most contentious set of issues deals

 

with the amount of damages awarded in medical malpractice cases. The most

 

straightforward part of the damage calculation would seem to be adding up the

 

actual out-of-pocket losses that resulted from a negligent injury. These would

 

include lost wages, medical care expenses, and other actual economic losses.

 

Although it is simple in theory to measure economic losses, it in reality can

 

become somewhat complicated when trying to estimate how much a person

 

would have earned far into the future, or what medical or long term care they

 

might need and how much it would cost many years after their injury.

 

As difficult as calculating economic losses are, the more controversial

 

part of calculating damages is estimating the dollar value of non-economic

 

losses. In particular, there is substantial disagreement over the way to measure 5

 

6 Alaska Statutes ?09.55.536. Connecticut General Statutes, Chapter 697 ?? 38a-33 and 38a-36. 7 the ?pain and suffering? that resulted from the injury. Deciding how much

 

money it would take to compensate someone for a humiliating appearance or

 

chronic pain or some other non-economic harm is a highly subjective

 

determination. Consequently, the dollars that are awarded by different juries

 

for similar injuries can vary substantially, raising the criticism that noneconomic damage awards are too arbitrary to be fair. In particular, physicians

 

often feel that juries respond to the plight of the injured person and make large

 

financial awards irrespective of whether the person?s misfortune was actually

 

the result of substandard medical care, simply because physicians and their

 

insurance companies are seen as ?deep pockets? that can be tapped to

 

ameliorate that misfortune.

 

Another aspect of damage awards that has become highly contentious is

 

the perception that some large awards are extraordinarily out of proportion to

 

the injury suffered. As such, the awards appear not really to be to compensate

 

the person, which is proper under the law of negligence, but would be to

 

punish the physician for their behavior. In general, ?punitive? damages are not

 

supposed to be awarded in medical malpractice cases.

 

The size of damage awards has become a major focus of state legislative

 

changes. The principal response has been to put a limit on the amount of

 

money that could be awarded in a malpractice suit. These statutory limits are

 

generally known as ?caps.? Previously, juries were largely free to award winning

 

plaintiffs as much as they thought was appropriate, limited only by constraints

 

on sums that amounted to punitive damages. Legislated caps, however, have

 

restricted the size of awards well below that level. Several states have limited

 

the total recovery available to plaintiffs. A larger number of states have

 

imposed caps on non-economic damages; in some of these states the caps are

 

absolute for all non-economic damages (e.g., cap of $250,000 for noneconomic damages) while in others the amount that may be recovered may vary

 

based on the injury (e.g., cap does not apply in cases of permanent loss of

 

bodily function or substantial disfigurement) or the type of conduct (e.g., cap

 

may not apply in cases arising out of willful or reckless conduct). 8 Attorney Compensation. The way that lawyers representing injured

 

parties are paid in most medical malpractice cases has also generated a great

 

deal of controversy. In this country, people on each side of a lawsuit are

 

generally responsible for paying their own lawyers. This is also true in medical

 

malpractice cases. But in most legal cases, each party knows that they must

 

pay their lawyers whether they win or lose, and this serves as a financial barrier

 

to filing frivolous or small lawsuits. In medical malpractice, however, the

 

lawyers representing patients usually receive a fee only if their client wins the

 

case. This is known as a ?contingent fee? arrangement. In addition, the fee is

 

not a set dollar amount or an hourly fee, but instead is a percentage of the

 

award.

 

Attorneys who take these cases know that they might not get paid. This

 

has several consequences. It means that lawyers are most likely to take cases

 

that they think they will win and that they think will result in large verdicts.

 

Traditionally, lawyers argued that this meant that they screened out cases that

 

were not meritorious, since they would not want to risk wasting their time for

 

free. But physicians feel that more often it means that lawyers will bring cases

 

without merit but involving a seriously injured person simply because a highly

 

sympathetic victim can lead to an award regardless of the quality of medical

 

care involved. Moreover, physicians feel that the high costs of defending

 

lawsuits has generated a likelihood that their own malpractice insurance

 

company will ?reward? and indeed encourage non-meritorious lawsuits by

 

settling them when the insurer thinks settlement would be less costly than

 

defending the case.

 

The contingent fee arrangement also means that lawyers must take a

 

large enough share of the damages when they win to offset the probability that

 

they will get nothing from other lawsuits that they lose. Typically, this means

 

that the lawyer will end up with 33%-50% of the total award. In large cases that

 

settle quickly, this produces substantial payouts to lawyers for what seems to

 

be very little effort. The financial interest that lawyers have under the

 

contingent fee system has become a major source of controversy among

 

physicians. It has also stimulated significant opposition by lawyers to caps on

 

damage awards or any change in the way damages are calculated. For example,

 

9 if damages were to be strictly limited to actual monetary losses, the contingent

 

fee would reduce the injured person?s recovery below their actual out-ofpocket loss by whatever amount was paid over to the lawyer.

 

The contingent fee arrangements have led to tort law changes that target

 

the amount of money paid to the lawyers who brought the lawsuit. A number

 

of states restrict the attorney?s contingent fees to no more than a specific

 

percentage of the total award, sometimes with the percentage decreasing as the

 

size of the award increases. For example, California limits contingent fees to 40% of the first $50,000 of damages, 33 1/3% of the next $50,000, 25% of the

 

next $500,000, and 15% of damages exceeding $600,000.7

 

How Should Damages Be Paid, and by Whom?

 

Joint and Several Liability. Another contentious issue in the debate over

 

medical malpractice law has been the extent to which negligent defendants can

 

be required to pay damages for injuries caused by another negligent defendant.

 

Traditionally in the tort system, any defendant who is found to have been

 

responsible for a negligent injury can be required to pay the full amount of an award, regardless of how many other defendants were also at fault.8 Under this

 

rule, all negligent defendants are subjected to what is called ?joint and several?

 

liability. If one or more defendants cannot pay for their share of an injury, the

 

rule of joint and several liability permits the injured person to collect the

 

missing shares from other negligent defendants who can afford to pay. The

 

principle behind the rule is that it is fairer to require a negligent party to pay

 

more than their share of an injury than to deny compensation to the innocent

 

(or less negligent) victim of injury.

 

Concerns have arisen that this rule has been applied unfairly, requiring

 

defendants who may have played only a minor role in someone?s injury to pay

 

the entire award because they had the most money. Also, this rule is seen to 7

 

8 California Business and Professions Code ?6146. Such a defendant can generally try to force the other defendants to reimburse them in proportion to each one?s share of the fault. 10 have created an incentive to sue as many defendants as possible, particularly

 

large institutions such as hospitals, to make sure someone has sufficient assets

 

to pay the damages. These concerns have generated state laws that limit who

 

can be required to pay an award for negligence when there was more than one

 

possible defendant, and laws controlling how much each defendant may be

 

required to pay. Kansas, for example, limits the amount of damages from any

 

defendant to the portion of the injury caused by that defendant.9 In

 

Pennsylvania, any defendant that is found responsible for 60% or more of an

 

injury is jointly responsible for the entire amount; defendants who are

 

responsible for smaller shares of an injury are only responsible for their own

 

share of the injury.10 Ohio has another variant on this theme: a defendant determined to have negligently caused more than 50% of an injury is jointly

 

responsible for the entire amount of any economic loss but is responsible only

 

for his share of any non-economic loss.11

 

Lump Sum or Periodic Payments. Defendants who are found to have

 

negligently injured a person often must pay all of the damages that are owed in

 

a lump sum at the end of the legal action. Since awards often include

 

estimated future losses, such as lost income or future medical expenses, some

 

argue that it is unfair to require the defendant to pay all the damages

 

immediately. Another issue is whether a defendant should be required to pay

 

for estimated future damages that never materialize. These concerns have led

 

to state laws that permit either party to elect that some damage awards (e.g.,

 

damages awards over $250,000) be paid periodically rather than as a lump

 

sum. Some states, such as Florida, may require security for the future

 

amounts.12 States also may permit a defendant to cease payments if anticipated losses do not occur (e.g., periodic payments for damages other than

 

lost earnings may cease if the plaintiff dies).13 9 Kansas Statutes ? 60-258a(d). 10

 

11

 

12

 

13 42 Pa. Cons. Stat. ? 7102(b.1). Ohio Revised Code ? 2307.22. Florida Statutes ? 768.78(2)(b)2. See, for example, Utah Code ? 78-14-9.5(6). 11 Recoveries from Collateral Sources. Fairness concerns have also arisen

 

over the longstanding practice of letting injured persons collect the full am...

 


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