In his State of the Union address in late January, President Obama signaled his willingness to consider medical malpractice reform as a way to bring down healthcare costs.
Late last week, the President followed up with a 2012 federal budget proposal that includes $250 million in Justice Department grants to help states rewrite their laws on medical malpractice. These grants would be awarded in consultation with the Department of Health and Human Services.
According to the Justice Department, the goal of any reform would be to fairly compensate patients who are harmed by negligence; reduce providers' insurance premiums; weed out frivolous lawsuits; improve the quality of health care; and reduce medical costs associated with “defensive medicine.”
States could propose reforms to their medical malpractice system through various approaches, including:
- Health courts, which would use specially-trained judges and medical experts to review evidence and determine the causes of injuries.
- Safe harbors, which would provide physicians, hospitals, and other providers who adhered to certified clinical practice guidelines with a presumption that they are adhering to the standard of care and are therefore non-negligent.
- Early disclosure and offer, which would help establish rules requiring physicians, hospitals, and other providers to implement a protocol after a medical error occurs.
States could also use grants to adopt other legal reforms, such as modifying the collateral source rule, so that malpractice awards take into account other compensation, or replacing joint-and-several liability with a fair-share rule that would allocate responsibility for malpractice payments in proportion to responsibility for damages.
A concern highlighted by the Justice Department is the impact of “defensive medicine.” Many physicians report that medical liability concerns lead to defensive medicine, which, in some cases, may contribute to higher costs with no benefit to patients.
This is an interesting point. Just last week a new study on the costs and frequency of defensive medicine in Pennsylvania was presented at the annual meeting of the American Academy of Orthopedic Surgeons (AAOS).
The survey of 72 orthopedic surgeons found that doctors often order medical imaging tests largely to protect themselves from a lawsuit.
The study found that 19 percent of the imaging tests ordered were for defensive purposes and accounted for about 35 percent of patients' total imaging charges ($113,369 of $325,309).
MRIs, which cost more than a regular X-ray, were the most common type of test ordered.
Numerous studies have shown that tort reforms lower health costs and with them medical malpractice premiums. By reducing the threat of lawsuits, doctors would also practice less defensive medicine.
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