Could malpractice reform save the U.S. health care system?

BY Sarah Corapi  January 6, 2014 at 4:00 PM EST


A new essay in the journal Health Affairs proposes that tackling tort reform on the federal level could convince doctors to agree to bigger changes in the U.S. health care system. Photo illustration by DNY59.

It’s a scenario most people have considered at least once. Patient A is hoisted onto Dr. B’s operating table. Knife slips and causes massive injury — and unlimited pain and suffering — to Mr. A.

Should the resulting monetary compensation be unlimited, as well? Or should monetary damages be capped to help doctors feel more comfortable in high-stakes situations, leading to better patient outcomes and possibly helping to keep America’s ever-rising health care costs in check?

The debate’s been raging for decades, and while it’s shown no signs of letting up in recent years, some say the current atmosphere of change in the health care system makes the time ripe for compromise.

But the stakes are high. In 2013, an article in the Journal of Patient Safety estimated that between 210,000 to 400,000 people die every year in the U.S. from hospital medical errors. In turn, a 2011 study in the New England Journal of Medicine found that roughly 1 in 14 U.S. doctors faces a malpractice suit every year.

Malpractice reform, often known as medical tort reform, has been tackled in a number of states, including California and Texas. But attempts at passing similar regulations on the federal level have failed since the 1970s.

Typically, injured individuals and the lawyers who represent them argue against tort reform, saying it will prevent patients from being protected against negligent physicians. Doctors, on the other hand, usually push for reform, saying it will protect patients from having to pay the high costs of malpractice insurance and perhaps even increase accessibility to some health care services. With the divisiveness of the issue presenting an emotional and political challenge, the federal government has largely refrained from addressing it.

An essay published Monday in the journal Health Affairs argues that it might be time for the government to step in. More specifically, lead author Dr. William Sage proposes that doctors and the federal government should strike a deal: Tort reform is implemented at the federal level to appease physicians, and in return, physicians will be more willing to adapt to larger changes in the health care system.

For example, physicians might have to accept a more accelerated movement away from fee-for-service — the current system where physicians charge for each service performed — to a more collaborative model that bundles services and brings down costs, Sage said.

Such a deal, Sage believes, would not only benefit patients, but will ultimately pave the way for better and more affordable health care.

“We think that patients benefit more than anyone if health care is quicker, cheaper, and more reliable,” he said. “The bottom line fact is: We need affordable, basic health care in this country. And as care becomes more sophisticated, we need to deliver it more collaboratively.”

PBS NewsHour spoke with Sage last week to learn more about his proposal and what it could mean for the future of the U.S. health care system.


PBS NEWSHOUR: Dr. Sage, thanks for joining us. Medical malpractice can certainly be a sensitive subject for doctors and patients alike. But why has malpractice policy been such a sore spot in the health care system?

SAGE: Many doctors take the notion of a malpractice suit very, very personally. They’re very nervous, not just about the reality but even about the prospect of being sued. And if doctors are worried about lawsuits, there could be more defensive medicine — or worse, they might not tell patients something bad has happened to them because they’re afraid of the consequences.

NEWSHOUR: All of this has been a concern for many years. But are are any changes coming on this front with the Affordable Care Act?

SAGE: Many in the policy community realize that American health care is overpriced, wasteful, often not safe — and if we don’t do something about it, we’re all going to go broke. And we now have the Affordable Care Act and this moment of health reform that’s working to fix this issue. But the ACA doesn’t really include tort reform at all. It’s a topic that the political process punted on for a variety of reasons. The ACA has prompted discussion about health insurance mandates and universal coverage, which is important. But at a core level, all the people in health policy, across the political spectrum, agree that we have to be better at how we deliver health care — and that’s where physicians come in. If physicians are not on board or are nervous, we’re not going to be able to make these changes.

NEWSHOUR: In your paper, you say it’s time for physicians and the federal government to “make a deal” when it comes to malpractice. What deal are you proposing?

SAGE: Medical malpractice policy has almost always been at the state level. And here’s the ACA coming in at the federal level, trying to make improvements in health insurance and health care delivery. But we think that the federal process is getting hung up on a lot of the health care delivery changes. One of the hangups is that doctors worry about liability consequences of changing what they’re doing; another is that they don’t really see anything in it for them.

So the deal comes between the medical profession and the federal government, and says that the federal government could offer something that it has never offered before: federal tort reform. In exchange, they’d get much better cooperation on the part of physicians with things related to health care delivery — including the payment for health care services.

NEWSHOUR: Break it down a little more for us. What would it specifically change about malpractice policy, and who’s benefiting?

SAGE: We’re advocating for the federal government to adopt the type of tort reform that California enacted in 1975, and that Texas did a version of in 2003. These reforms included caps on how much doctors can be sued for non-economic damages — meaning damages available for pain and suffering, rather than for medical expenses or lost wages. So that side of the deal is pretty straightforward.

Most importantly, these reforms are familiar and desirable to physicians. We and many other malpractice scholars have always preferred other, more complex reforms to non-economic damage caps, but we recognize that giving physicians what they want is more likely to make them receptive to offering something meaningful in return.

On the other side of it, there are a few more variables. For example, physicians might have to accept a much more accelerated movement away from fee-for-service payment, to a more collaborative model that bundles doctor or hospital services. Another thing doctors might have to do is provide much clearer information about what things in health care cost. And finally, physicians would have to address another emotional issue: the scope of permitted practice for people who aren’t physicians. But the bottom line fact is, we need affordable, basic health care in this country. And as care becomes more sophisticated, we need to deliver it more collaboratively.

NEWSHOUR: You say that similar reforms have already been enacted in California and Texas. Have they altered the health care landscapes there in any way?

SAGE: The California reform has been in place for almost 40 years, the Texas reform for only 10 years. Both reforms have reduced litigation and stabilized liability insurance premiums paid by physicians. Neither state’s reforms have had substantial impacts on health care spending, physician supply or patient safety.

NEWSHOUR: So it seems like this deal could really benefit both doctors and the federal government. But what about patients? Couldn’t putting a cap on how much doctors can be sued for end up hurting them?

SAGE: We think that patients benefit more than anyone if health care is quicker, cheaper, and more reliable. We’ve studied the malpractice system for a long time, and we think it achieves some rough justice at a very great expense. At the margins, it sometimes might make health care safer — but health care is still too dangerous, too disorganized, and too expensive. I personally have never felt that caps on damages had a major effect on patients one way or the other. Patients are safer if there are communication-and-resolution programs in place to identify, communicate and treat injuries promptly. We think that’s a much better system. We don’t think caps on damages impairs that at all; if anything, caps on damages may make it easier to bring those systems into existence.

You can certainly find individuals or groups of patients who have been disadvantaged after being harmed by an avoidable error because damages were capped. We’re not saying that a cap on damages hurts nobody — they hurt the people that otherwise would seek damages. We just think that in the bigger picture, particularly given how much doctors value the perception of fewer lawsuits, that patients would be much better off to give doctors tort reform. We are also not just saying, “cap damages” — we are saying cap damages in exchange for something else that would really help patients.

NEWSHOUR: With so many changes that would have to take place in order for a malpractice policy trade-off to be successful, is implementing a deal like this feasible?

SAGE: This is a toxic political environment, and I think we’re all disheartened by that. Not just around health care, but around all sorts of things that the public cares about. Insofar as anything is hard politically, this would be hard, too. But if you’re not depressed about the possibility for constructive change, I don’t think this is particularly difficult. I actually think that if people can recognize that one can get cooperation and leadership from physicians as a group by offering them this deal, then it could happen.

As a country, if we keep sticking our heads in the sand about the need to improve health care delivery so that it can be quicker, cheaper, and more reliable, it’s not going to serve us well in the long run. Anything we can do now to be talking about improving the delivery of health care is a good thing.

NEWSHOUR: Dr. Sage, thank you for joining us.

SAGE: Thank you very much.