Medical Malpractice and the Maternity Crisis Is there a by fwg31028

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									Maternity Care Coalition



Medical Malpractice and the Maternity Crisis
          Is there a Connection?




                                     July 2009




                           2000 Hamilton Street, Suite 205
                              Philadelphia, PA 19130
                                   215-972-0700
                                www.MOMobile.org

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Maternity Care Coalition


                           Medical Malpractice and the Maternity Crisis
                                    Is there a Connection?

MCC began this project to understand how – or if – the increased cost of malpractice insurance
was contributing to the rising cost of maternity care and to the closure of hospital maternity
services. Liability insurance has been cited as one of the main cost drivers in obstetric/maternity
care, and there has been an assumption that if malpractice lawsuits and awards were reduced the
maternity crisis would be “fixed.” The truth about the connection between malpractice and the
maternity crisis is far more complex and markedly different when viewed from the perspective of
the families who seek/desire maternity services.

This briefing paper on malpractice insurance and obstetrics will do the following:
   1) Review the purpose of the malpractice system and some history of medical malpractice
   2) Review recent efforts to “solve” the malpractice “crisis” in PA
   3) Describe the efforts of two states, Florida and Virginia, who have implemented an
       alternative compensation method designed to address problems in the malpractice system

Medical malpractice stands as one of the most emotional issues in the healthcare arena. Almost
any discussion of the issue among doctors and lawyers degenerates into a variation of the
following positions:

Doctors: Tort lawyers are greedy and have ruined the practice of medicine by forcing us to
         practice defensively and by filing frivolous lawsuits.
Lawyers: Doctors have not been careful or safety-conscious, and there are many injured patients
         who need the help of the legal system to compensate for poor care received.

This basic disagreement is compounded by dramatic differences in interpretation of data on the
effect of some legal reforms on malpractice insurance premiums. Stakeholders also disagree in
interpreting how the cost of malpractice insurance affects access to care. Major proposals for
overhaul of the system have not gained broad backing, and thus remain in the realm of foundation
and academic studies.

An inability to agree on the facts has led to an inability to agree on solutions. The impasse in
Pennsylvania includes some of the follow characteristics:

•   Physicians believe that malpractice insurance rates are too high, and that, particularly in
    Pennsylvania, this has led to an increase in physicians leaving the state. Although the
    Pennsylvania Medical Society generalizes this to all physicians, obstetricians and
    gynecologists believe they have been hit hardest. The physicians’ suggestion is usually “tort
    reform,” i.e. capping non-economic damage awards. Despite some changes in recent years,
    the Pennsylvania Medical Society continues to push for award-caps as the solution.
•   Malpractice “crises” occur periodically because of shifts in the fortunes of the insurance
    industry. During previous malpractice “crises,” physicians were more easily able to
    compensate for increased malpractice insurance costs by raising their fees or seeing more
    patients. In recent years this has become more difficult because health insurers have exerted

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    tighter control on their payments to physicians. Yet several studies show that most physicians
    have not seen a decrease in their income because of higher malpractice insurance costs.
        Physicians (and the hospital systems that own physician groups) – like other professionals
        and business owners – are subject to rising operating costs. Outlays for rent, employee
        health insurance, information technology, and supplies continue to increase. One study
        claimed these expenses grew at a greater rate than the cost of malpractice coverage. But
        the high price of malpractice insurance is a more emotional issue, and is often singled out
        for blame.
•   Physicians claim that malpractice threats cause them to practice defensive medicine, and thus
    drive up costs. This point is consistently raised in policy debates about malpractice.
•   However, numerous studies have failed to agree on the magnitude of such costs, and whether
    they are significant. The effects of changes initiated by Governor Rendell and the PA Office
    of Health Care Reform have yet to be fully studied.

The difficulty of achieving significant change can be appreciated when one looks at a five-year
Robert Wood Johnson funded initiative on Improving Malpractice Prevention and Compensation
Systems. http://www.rwjf.org/reports/npreports/impacs.htm. The RWJ objectives – to develop a
new generation of mechanisms to prevent and compensate for medical malpractice – were unmet.
When the project began in 1992, the Foundation thought that the malpractice problem was already
well documented, and that the knowledge existed to develop effective solutions. Yet after the five
years of funding, RWJ concluded, grimly: “Improving Malpractice Prevention and Compensation
Systems produced solid research by respected scholars that may benefit policymakers and
researchers when the next malpractice crisis or other development sparks a deeper interest in
reform.”


              MALPRACTICE: HISTORICAL PERSPECTIVE AND BACKGROUND
The malpractice system has three social goals: to deter unsafe practices, to compensate persons
injured through negligence, and to exact corrective justice. In theory, it is an efficient system. The
courts are available to provide compensation and deterrence when self-regulation fails to prevent a
breach of accepted standards of care. Because plaintiffs’ attorneys work on contingency, they can
be effective gatekeepers by refusing to take claims that are unlikely to win. Liability coverage
helps ensure that providers are not bankrupted by a single large payout and offers resources to
compensate patients. However, what is true in theory is not true in practice.

Starting in the 1970s, the US has experienced several rounds of malpractice “crises.” Public
recognition of malpractice issues increased as case law changes made it easier for plaintiffs to
bring suit. Judges began to apply national, rather than local, standards of care. Hospitals lost
“charitable” immunity. As insurers left the market, many physicians couldn’t obtain insurance.

States responded with reform measures: insurance reform, joint underwriting associations to act as
insurers of last resort, patient compensation funds to absolve insurers of some responsibility, and
public reinsurance mechanisms to fill in gaps in the insurance market. These efforts offered some
temporary relief.




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In the 1980’s there was a rise in both malpractice claims and other personal injury litigation.
Premiums rose and states looked again at “tort reform.” Some states instituted caps on non-
economic and punitive damages. At the same time, these changes led to changes in the insurance
industry. Medical malpractice, previously dominated by large property and casualty insurers, now
became dominated by institutional self-insurance or by small companies owned by physicians and
specializing only in medical malpractice.

In the 1990’s, payouts rose slowly, but claims did not grow. Defendants won a majority of cases.
Insurers had raised premiums high enough to cover anticipated payouts, and so began making
money on malpractice coverage. New insurers entered what they saw as a lucrative line of
business, and competition with real premium differences became part of the marketplace.

The malpractice “crisis” of the past decade has been considered to be multi-factorial: insurers
again leaving the market, the cost of insurance rising, dramatically increased payouts to plaintiffs
since 1999, and a small increase in cases. A downturn in the economy led to diminished
investment returns for insurance companies. Some analysts also believe that insurance companies
made bad business decisions in the 1990’s, pricing premiums too low as they sought to enter the
market and increase their market share.

The recent increase in claim frequency and payout size is believed to result from greater public
awareness of medical errors, greater public distrust of, and less confidence in, the medical system,
anger at managed care, and advances in medical innovation and technology that raise expectations
about medical outcomes.

In addition, plaintiff attorneys have become more reluctant to accept settlement offers that might
have closed cases in the past. These days many jurors share a distrust of the medical system. With
greater public awareness of errors, juries in general view plaintiffs and larger awards more
favorably.

Today’s malpractice situation has one other distinctive difference from previous eras. Until
recently, healthcare providers have been able to pass on increased costs of malpractice coverage.
However, increasingly tight contractual agreements between health insurers and hospitals and
doctors, combined with other increased costs of running medical practices, make it difficult for
physicians to raise fees. So the impact of higher malpractice insurance costs is greater.

                                                 ~~~
It’s not only the insurance market that prevents the medical malpractice system from reaching its
goals. The system does little to improve patient safety, either by deterrence or any other means.
Two studies – one in California in the mid-1970s, and one done by Harvard in the mid-1980s –
both showed the same thing: the actual number of medical injuries and adverse events occurring in
hospitals was much greater than the number of malpractice cases. There was almost a complete
disconnect between injury and litigation. (Only two percent of negligent injuries resulted in
claims, and only 17 percent of claims appeared to involve a negligent injury.) These numbers
were repeated in several different areas of the country and confirmed. Other studies showed that
the system does a fairly good job of compensating some plaintiffs with meritorious claims, but



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that the compensation is inconsistent, and awards have more to do with disability than with
negligence on the part of the healthcare provider.

Thus it seems that the current medical malpractice system does not work very well at
compensating for the actual effects of negligence. It is both an inaccurate mechanism for
distributing compensation – since most injured parties do not get compensated – and an inefficient
one, since up to 60% of the premiums paid end up going to lawyers. (This is twice the overhead
rate for the average worker’s compensation claim.)

It has been very difficult to study whether the system does anything at all to reduce medical
negligence, and there is insufficient data to say that it does. There is conflicting data regarding the
effect of malpractice cases and “defensive medicine,” with the field of obstetrics producing the
most thorough research. Some well-designed studies have shown that a higher liability risk (as
measured by high malpractice premiums, past claims, and perceived risk of being sued) increased
the probability of delivery by cesarean section, others have shown the opposite, and still others
have shown no association.

In addition, no reliable data has shown that large numbers of physicians have left the state.
Although consumers have subjectively reported difficulty in finding obstetricians in Pennsylvania,
the best studies have not demonstrated a significant departure of obstetricians during the most
recent malpractice “crisis.” [M Mello, Health Affairs 2007 vol. 26(3)] Mello showed that
although a slightly larger number of obstetricians either left the state, or stopped practicing
obstetrics, during the “crisis” period than before the crisis period, the number was small and not
significant. Despite this, the public believed that physicians were leaving. In 2004, an
IssuesPA/Pew Poll found that 25% of Pennsylvanians believed they had to choose a new family
doctor because of rising malpractice insurance costs. http://www.issuespa.net/articles/10266/


                  THE MALPRACTICE CRISIS IN PA: RECENT APPROACHES
In 2002, the Pennsylvania legislature passed Act 13, which
    • Established a Patient Safety Authority
    • Required all health care institutions to
           o Have a patient safety plan and a patient safety committee
           o Report all serious errors to PA Department of Health and Patient Safety Authority
           o Notify patients in writing of serious “patient safety events.”
    • Created the MCare (Medical Care Availability and Reduction of Error) Fund

        Money in the MCare Fund is used to pay injured persons for claims in excess of that
        available through a physician or other provider’s primary malpractice insurance.
        Most healthcare providers are required to buy $1 million in malpractice coverage – the first
        $500,000 from the private market and the remaining $500,000 from the MCare Fund.
        MCare paid a portion of premiums for the highest cost specialties.




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Since 2003 the PA Office of Health Care Reform (OHCR) has developed a number of proposals.
Its initial plan addressed the following areas:
     1) Patient safety
     2) Medical Malpractice Insurance Abatement
     3) Provider Reimbursement
     4) Tort reform
     5) Insurance
It included immediate concrete help to physicians in the form of increased reimbursement under
Medicaid, abatement of malpractice premiums for high risk specialties, and longer range proposals
for change. The plan is available on the OHCR website.
The PA legislature also passed HB 44 in 2003 that gave high risk physicians-obstetricians,
neurosurgeons, orthopedic surgeons, and midwives a 100% abatement on the their 2003 and 2004
MCare assessments.

In January, 2004 the Pennsylvania Supreme Court responded to requests of the Rendell
administration and said that a healthcare provider can only be sued in the county where the alleged
negligence occurred, and that in any lawsuit claiming professional negligence, the plaintiff must
have a written statement from a qualified expert that ". . . there exists a reasonable probability that
the care, skill or knowledge exercised or exhibited in the treatment, practice or work that is the
subject of the complaint, fell outside acceptable, professional standards and that such conduct was
a cause in bringing about the harm. . . ".

In November 2006, the MCare Commission issued a final report and recommended:
    • Continuing the state’s MCare abatement program which subsidizes healthcare providers’
      catastrophic malpractice claims payments until the state decides to phase out this coverage.
      (The report noted that the Commonwealth had already defrayed nearly $1 billion of
      malpractice expenses for Pennsylvania healthcare providers.)
    • Privatizing MCare malpractice coverage as directed under Act 13 as soon as is feasible,
      ideally between 2008 and 2011. (Note: in July 2006 the Insurance Commissioner had
      declined to increase the amount of coverage that could be purchased in the private market
      to $750,000 and to decrease the MCare portion to $250,000. He did not think there was
      enough capacity in the private insurance market to support that change.)
    • Eliminating the MCare assessments paid by healthcare providers to support the MCare
      Fund once private insurers begin covering the entire amount of required malpractice
      insurance, thereby reducing providers’ costs.
    • Using the public funds committed to the MCare abatement program to retire the unfunded
      liabilities of the MCare Fund, once the MCare program ends.
    • Using any remaining committed public funds to mitigate increases in providers’
      malpractice insurance costs, with a target of limiting the maximum increase in aggregate
      medical malpractice liability insurance costs in PA to 10 percent annually.
    • Aggressively promoting healthcare quality initiatives, which will, among other things,
      reduce future malpractice expenses and maximize public funds that can be dedicated to
      healthcare services.




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In October of 2007 Governor Rendell announced that the malpractice crisis had passed.
According to the Governor’s office:
    • MCare payouts had declined for 3 years in a row.
    • The state's two largest private medical-malpractice insurers, PMSLIC and MedPro, had
       kept their premiums steady for two years and then filed for rate decreases. (In 2009, the
       base rate is flat.)
    • New insurance companies had begun to write medical malpractice policies. (There are over
       58 insurance entities in 2009 that have been licensed to offer med mal coverage in PA.
    • The number of practicing physicians in the state had remained constant.
    • There was a 38% drop in malpractice cases filed between 2003 and 2006. See
       http://www.aopc.org/Index/MedicalMalpractice/med%20mal%20filings%20statewide%20
       2000%20to%202006.pdf the state court website. Filings in Philadelphia in 2006 were
       down 50% from the 2000-2002 average. Filings were also down in Chester, Bucks, and
       Delaware Counties, but were up 338% in Montgomery County. Some analysts have
       suggested that, in the past, those additional cases may have been filed in Philadelphia.
    • MCare announced its 2007 annual assessment to physicians: 20% of the prevailing primary
       premium, which is based on the cost of coverage with the Joint Underwriting Association,
       an insurer of last resort. In 2006, it had been 24%. In 2009, it is 19%.1

Unfortunately, Governor Rendell’s announcement that “the crisis is over” did not mean that the
fundamental issues raised by the medical malpractice system, and its critics, or even by his
administration, had been solved.

However, several reforms have represented progress. Currently in Pennsylvania, suits must be
filed within two years of the injury. Although Pennsylvania does not have caps on non-economic
damages, the 2002-2003 reforms instituted periodic payouts, and deducted payments for lost
earnings or past medical expenses that were paid from other sources. They also required that, in
considering motions to reduce the award, a judge take into account the affect of the award on
access to healthcare in that community.

Yet many advocates have urged another approach, moving beyond reforming the legal system
where malpractice cases are tried. Instead of discussing “tort reform,” they propose much needed
system reform.

An important aspect of this alternative approach is that it begins to unify medical errors with a
system to improve patient safety. The traditional malpractice system operates on premises that are
in conflict with those of the modern patient safety movement. A 2004 review about malpractice in
the New England Journal of Medicine describes it as a conflict of cultures and stresses the need
for a third way.



1
 With a few exceptions, any provider who spends 50% or more of practice time in PA must participate in MCare.
Participation means paying a certain percentage of the prevailing primary premium charged by the Pennsylvania
Professional Joint Liability Underwriting Association for their specialty in the previous year. MCare has instituted
experience rating, based on the number of claims that MCare has paid out in the last 5 years.


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The authors point out that trial attorneys believe the threat of litigation makes doctors practice
more safely. But the punitive, individualistic, adversarial approach of tort law is antithetical to the
non-punitive, systems-oriented, cooperative strategies promoted by leaders of the patient-safety
movement.

The review goes on to describe one alternative to litigation that is attracting much interest: an
early-offer program in which the patients and the healthcare organization have incentives to
negotiate a private settlement immediately after an adverse event occurs. Other proposals would
route malpractice claims through structured mediation, administrative law hearings, or medical
courts. Several scholars have also paired alternative mechanisms for resolving disputes with an
emphasis on private contracts, allowing patients to agree in advance with their providers or health
plans to submit to specified procedures, such as arbitration, in the event of an
injury.http://content.nejm.org/cgi/content/full/350/3/283 - R93

In Pennsylvania, Governor Rendell’s original proposal included some of these ideas as did the
Prescription for Pennsylvania linking accessibility, affordability, and quality. The Office of Health
Care Reform, in cooperation with medical societies, held a forum for hospital CEOs and general
counsels to explain a successful model at Rush Medical Center in Chicago. Drexel adopted that
program in 2004 for some of its cases, and Abington had a pilot project sponsored by PEW. Other
hospitals across the state use mediation in a small number of cases. The Pennsylvania Supreme
Court encouraged the MCare system to try mediation, and this is occurring in some cases. While
the Pennsylvania Medical Society has not opposed mediation, it does not see it as a cost-
containment measure. For that purpose, the Pennsylvania Medical Society continues to argue for
caps on non-economic damages.

However, there is no public vocal movement in PA for fundamental system overhaul of the
malpractice and professional liability procedures. The patient safety initiatives are critical, but
their impact on malpractice premiums and payouts, in the current environment, is uncertain and
will most likely be a long time coming.

In the meantime, can we learn from what other states have done to address the malpractice issue,
aside from “tort reform”? The next section highlights efforts in Virginia and Florida to
implement small programs to cover a high cost malpractice area – babies with neurologic injury.
Their approach dispenses with negligence as the basis for compensation. Although often called no-
fault, it really replaces negligence with the concept of avoidability, a concept used more
commonly in other countries. The standard for an award is that a patient sustained an avoidable
injury. Where plans like this are in place, a medically injured patient does not have to file a lawsuit
and prove fault in order to be compensated.


                 ADDRESSING BIRTH INJURIES IN FLORIDA AND VIRGINIA
Background
Malpractice has been a particular issue for obstetricians because they are frequently defendants
when children are born with neurological impairment. In an article in JAMA in 2005, the authors
stated that “it has never been safer to have a baby in the United States and more dangerous to be
an obstetrician.” [MacLennan]

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According to this article:
• 76% of practicing United States obstetricians report facing litigation at some time during their
   careers.
• The median award for “medical negligence in childbirth” is $2.3 million.
• Most of these awards are for allegedly causing cerebral palsy (CP); 60% of malpractice
   premiums go to CP suits.
• Fewer than 10% of CP children receive any compensation, and 60% of the premiums
   expended on these cases go toward legal fees.
• 86% of cases are settled out of court, half with payment.

There is no medical evidence that lack of oxygen at delivery causes cerebral palsy. The cause of
cerebral palsy is essentially unknown. Several intra-partum risk factors have been identified as
possibilities, but none of them are preventable with current knowledge of prenatal care or labor
and delivery monitoring and choices. However, birth injury suits are common. According to the
Physicians Insurers Association, brain injuries to children are the most prevalent and expensive
conditions reported. Average payments are all >$500,000 and large judgments are awarded when
there is severe disability without regard to cause.

Creative Compensation Efforts
In the 1980’s, Virginia and Florida created birth injury compensation funds in response to
increasing costs of medical malpractice insurance, and the withdrawal from the market of insurers.
These funds, each known as NICA (neurological injury compensation association), were designed
as no-fault systems for a very narrow range of injury. In a joint presentation by the current
directors of both programs, the programs were described as “supported by the medical community
and tolerated by the legal community.”

Similarities of both plans:
   • They were designed to compensate families for lifetime medical expenses they incur when
       a child is born severely impaired because of neurological injuries suffered during the
       birthing process.
   • Funds are capitalized by annual assessments from providers and hospitals. Physicians and
       midwives who participate pay $5000 per year in Virginia and $5200 per year in Florida.
       Hospitals pay a mandatory $50 per live birth. Participation by doctors and hospitals is
       voluntary in Virginia; hospitals must participate in Florida. Doctors and hospitals that
       participate do not have to face malpractice suits if an infant is found eligible for
       compensation. Eligibility is determined by the Workers’ Compensation Commission in
       Virginia and by an Administrative Law Judge in Florida.
   • All non-participating physicians pay $250 per year in Florida and $270 per year in
       Virginia.
   • In Virginia, liability insurers pay ¼ of 1% of premiums.
   • Families receive payment for all necessary and reasonable expenses for medical, hospital,
       rehabilitative, residential, and custodial care and services; plus special equipment or
       facilities, and related travel, except those expenses already paid by a private insurance
       policy or a government program. The family is also compensated for the cost of filing the
       claim, including attorney’s fees.


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    •   In Florida, parents receive an award up to $100,000. In Virginia, the family is
        compensated for the child’s projected lost earnings from 18 to 65, calculated at 50% of
        average weekly wage of private sector non farm workers.

How are these programs working?
The programs’ goals are to lower malpractice premiums for obstetricians and to provide
compensation, on a no-fault basis, for a limited class of catastrophic injuries. The plans have been
evaluated by mandated state legislative reports and in legal and medical journals. Academic
research has shown mixed results:
    • A 1998 study [Sloan, Whetten Goldstein] found that obstetricians liked system better than
       the tort system but didn’t like the premiums. At that time the authors concluded that the
       program hadn’t built a constituency and therefore had a minor impact on practice patterns.
       In both states, the annual assessment was more than offset by reductions in premiums for
       malpractice insurance. Other studies showed that in FL and VA malpractice premiums
       dropped relative to the rest of the county.
    • The programs efficiently and equitably achieve the goal of distributing compensation to
       claimants for a limited class of catastrophic injuries. Cases are resolved in less time and at
       lower cost, BUT they have compensated fewer claimants than expected. One study
       [Studdert, Fritz, and Brennan June 2000] found that as many severe injuries continued to
       get malpractice payments as via NICA.

However, some specific benefits have been noted:
   • In both states, compared to the tort system, more money is spent on the care of the child.
       In Florida <1% goes to attorneys, and in Virginia <4%, compared to 40% in tort cases.
   • Most cases are decided within six months, much more quickly than under tort.
   • Participants consider staff members at both programs to be friendly and helpful. Many
       families who needed help quickly appreciated the program’s rapid response.
   • Recipients receive transportation, housing assistance, medical costs after private
       insurance has paid, and nursing care in the home.

Criticisms of the programs emerge from differing views of the malpractice system and the various
approaches to reform. Observers may believe the programs should improve patient safety,
decrease malpractice premiums and claims, fairly compensate injured parties, or all of the above.

Additional findings:
   • The programs only help a very limited number of children. By intent, the definition of who
       is eligible is very narrow. Virginia looked at broadening eligibility, but noted that would
       increase the costs for a program already actuarially unsound. Both lawyers and
       obstetricians agree that the limitations on eligibility do not serve the needs of many
       neurologically impaired children who will need a lifetime of care. One estimate stated that
       90% of babies born with neurological deficits do not qualify under the definitions of these
       programs.
   • There were no reports on the effects of the programs on patient safety, although
       participating hospitals in Virginia must agree to have their records reviewed by the Health
       Department.


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    •   In Virginia, the program achieved its immediate goal when insurers again began to offer
        new ob-gyn policies. Liability rates there for ob-gyns are lower than in other states. But
        insurers still did not provide obstetric malpractice coverage in all areas of the state, and a
        plan requiring care for the poor never went into effect.
    •   Although tort awards were higher than program awards, a greater proportion of the money
        went to claimants. A study published in an obstetrics journal, done early in the program,
        found that the number of tort claims fell. But the number of tort + NICA claims combined
        meant that total claims rose.
    •   An assessment by the Robert Wood Johnson foundation agreed with most of the problems
        noted above, and felt that overall the programs were too small to allow projections
        regarding other possible no-fault programs.

Everyone agrees that there have been far fewer claims than would be expected. A review of the
Florida program suggested two hypotheses:
    • People were afraid to file themselves and attorneys didn’t want the cases because the
       money was limited
    • The definition of injury is too limited. Physicians, lawyers, risk managers, legislators, and
       insurers who were interviewed all agreed on that.

In the larger area of malpractice and insurance reform, these programs can’t spread risk because
they apply to only one injury. No one can predict this risk since the cause of the injuries is
unknown.

Some physicians have noted that although this approach is considered “no-fault,” the hospitals and
physicians, from their fees, are being asked to fund the program. One physician, on a healthcare
blog, stated that this is a societal burden that should be shared by everyone, although he does not
suggest how, and does not suggest universal health insurance.

William Sage, a principal investigator of the Pew Project on Medical Liability in Pennsylvania,
noted that the current financial burden falls mainly on physicians in a few high risk specialties.
“Current practice,” he says, “makes no more sense than asking airline pilots to guarantee safety for
the entire aviation industry and forcing those who fly the most dangerous routes to compensate
injured passengers from their personal paychecks.”


                                           CONCLUSION
The current medical malpractice system fails to meet its goals of improving patient safety and
fairly compensating injured victims. Over the past 30 years, the system has reached a “crisis” that
is most attributable to the fortunes of the insurance industry. In the past, doctors and hospitals
were able to meet the costs of these crises, but recent trends in tighter contractual management of
doctor and hospital fees have limited that option.

Obstetricians are particularly hard hit by these crises. In addition, Pennsylvania is an “outlier
state.” It has more cases, and higher payouts, than any other state. Data on the effects of various
tort reforms is contradictory, but a recent article suggests that no tort reforms have had dramatic


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effects on malpractice claims. There simply is no good study that explains why Pennsylvania is
such an outlier.

The VA and FL no-fault systems have helped a limited number of families. Experience with them
has shown the benefits of trying to develop a no-fault system. Major issues around no-fault for
neurologically impaired children include: 1) who should finance the system; 2) how do you define
the class of children eligible for benefits; and 3) how do you define necessary benefits. The fourth
issue is whether any other legislature would even create such a program.

Larger challenges remain. Differences in philosophy regarding the role of malpractice insurance,
and its relationship with larger health care reform, must be resolved. The report on malpractice
issued by the PA Office of Health Care Reform in 2003 addresses both tort and patient safety
aspects, and Pennsylvania has made small steps in this direction.

PA has some of the strongest state-wide patient safety initiatives. The Commonwealth mandates
prompt disclosure to patients of unexpected problems and supposedly protects physicians from
having those discussions used against them in court. However, physicians are still fearful that
disclosure will increase lawsuits. Although many advocates state that disclosure reduces litigation
risk, there is no proof of this. To a concerned doctor it seems highly unlikely, given the rewards
available to patient and lawyer.

                                                 ~~~
MCC’s exploration of the issues has found no clear direct line link between the malpractice
“crisis” and the loss of maternity services. National or state-wide guaranteed health insurance,
with clear coverage guidelines for the care of neurologically impaired children, would remove one
major reason for lawsuits – the need to care for such a child over a lifetime. There is no evidence
that caring for low-income women, or immigrants – those currently uninsured – results in more
lawsuits.

MCC believes that there are significant contributions to be made by the stakeholders who have
been largely left out of the debate – the medical consumers. Instead the debate has been
dominated by hospitals, physicians and lawyers. While it is difficult to compete with professional
voices, the consumer’s interests must be considered when malpractice and liability issues are
considered. Public voices could articulate a vision based on the consumer perspective that could
identify approaches to fairly compensate injured parties, other than tort reform.

Today we continue to grapple with the vast gap between public opinion and reality apparent in this
quote from the Pennsylvania Economy League in September 2004:

        The skyrocketing cost of medical liability insurance is making headlines in
        Pennsylvania – and nationally. Though research shows medical malpractice is not a
        primary driver of health care costs, and there is no clear evidence that substantial
        numbers of doctors are fleeing the state because of rising medical malpractice
        [insurance] rates, Pennsylvanians said they feel the impact of the medical
        malpractice crisis in the form of rising health care costs and difficulties with access
        to health care providers. [http://www.issuespa.net/articles/10266/]


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It is unlikely that new solutions will be put forth and tested until we move beyond the most visible
and vocal movers and shakers in the malpractice/maternity crisis - the hospitals, physicians, and
lawyers – and embrace a problem solving process that includes the families most impacted – our
consumers.


Postscript:

The needs of women and their families to have access to health insurance and care have been
linked by recent legislative actions to physicians call for liability relief. In March 2008 the House
passed legislation that included both a ten year plan to pay medical professionals and hospitals
subsidies for malpractice insurance premiums (MCare) and to expand the purchase of health
insurance for individuals earning up to 200% below federal poverty level. The Senate did not
vote on this piece of legislation and introduced a different plan. When the Senate leaders, House
leaders, and the Governor could not find agreement on extending health care access, neither issue
passed and the MCare abatement program was not extended beyond 2007.

Again during the current legislative session (2008-2010), the funding of the MCare fund to
support the liability costs for the medical professionals became tied with the funding to expand the
health insurance for individuals. And, as of June 2009, unfortunately, there is no expansion for
the program to provide subsidized health insurance for individuals and no MCare abatement for
physicians. Today, the hospitals and physicians are not supporting legislation to expand coverage
for the uninsured individual since they have not been successful in their proposals to finance the
MCare fund. Sadly, the link between public funding for professional liability and expanding
health coverage for individuals has polarized the two groups of stakeholders who need to be
working together.




Maternity Care Coalition once again extends its appreciation to Gene Bishop, MD for her research
and to Lynne Jacobs for her editing skills. We also wish to acknowledge the contribution of
Gabrielle Ritaccio, summer intern, for her proofing and layout skills.




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