Oregon's State Body Tort Cap

Generally speaking, I don't like lawsuits. I think they are to civil justice what personal firearms are to criminal justice. They can serve individual needs, but they make no allowance for community interest and not infrequently the two work at cross purposes. Medical malpractice is a good example.

Lawsuits allow select individuals to recover some damages, but they also encourage providers to take a pre-emptive "defensive" stance when adverse events occur. Instead of analyzing errors and broadly distributing lessons learned providers have incentive to clam up and hope no one notices. The consequences are visible in statistics. The IOM estimated at least 44,000 deaths per year are caused by preventable medical errors but fewer than 5,000 payments per year for fatalities are logged in the National Practitioner Data Bank, a registry of medical malpractice payments. I think the community would be better served by encouraging processes that reduce errors, even if that alters the way individuals seek recovery. Oregon's new malpractice reform is a modest step towards that goal.

Having said that, there are times when individual interests do trump community interests. The constitution enshrines the principal that people cannot be arbitrarily punished or have property seized without due process. Even if the community overwhelmingly supports such an action and even if the community would overwhelmingly benefit from it, in the absence of due process such a taking violates the core individual rights that we grant ourselves. 

I don't see how those rights can be honored by the current tort cap which limits recoveries even for specific economic damages. It imposes arbitrary and unlimited costs on individuals without process or appeal. I say it with a grimace, but I think Mr. Pope is right.

Oregon Med Mal Reform

A followup to my critique of Public Citizen's complaint about Oregon's Medical Malpractice reform.  I said that the world outside the National Practitioner Data Bank is much larger than the world inside it.  For a vivid illustration of how much bigger it is, see this post from Adrianna McIntyre at Incidental Economist.  Around 3%-4% of hospitalizations result in injuries due to medical care, and 1% result in injuries due to substandard care.  Of the Injuries due to substandard care only 2% result in medical malpractice claims.

Reversing that, for every medical malpractice prompted by an injury caused by substandard care during a hospitalization, there are 50 injuries caused by substandard care that didn't prompt a claim plus another 100 - 150 injuries caused by standard care.

Public Citizen worries about the information lost by decreasing the number of claims entering the little green slice that represents the medical malpractice system.  In a world where that reporting could be maintained cost-free, sure we'd be better off with it.  But is maintaining current reporting so important that it's worth discouraging reforms that would increase reporting and scrutiny of the vast world now outside the medical malpractice system?

A response to a question...

posed by Nick Budnick in comments on Oregon's new medical mediation law helps bad doctors, national group says

The story is about how Public Citizen is critical of a Disclose and Compensate tort reform program Oregon enacted earlier this year.  The question asked how to weigh the potential loss of reporting of some incidents to the National Practitioner Data Bank(NPDB) state medical board as a result of them being settled through mediation. [alas, I misunderstood the question!]  My response:

Public access to the NPDB doesn't include names of physicians.  Access to that information is generally restricted to hospitals  and credentialing organizations.  Given that, I wouldn't call those reports "public information."  Weighing their value requires knowing how those reports get used in real life, and I don't know that (maybe a future story?)

But I'll speculate that how those reports get used is on second hand decisions:  Should we renew so and so's credentials?  Should we revoke them?  Should we hire or grant privileges?  Except for the case where a facility is reviewing an incident which happened on their premises (and in that case they shouldn't need an NPDB report to tell them what happened)  none of those decisions can influence the process that lead to error, assuming there was one.  They are go / no-go decisions about a specific person and they only effect errors to the extent those individuals are personally responsible for them.

There are really bad doctors and having a process that can get rid of them is a good thing.  But most doctors aren't really bad and most adverse events aren't attributable to a single individual.  Keying off Merwin's comment below most doctors are neither superheroes nor super villains, they're regular people typically working in complicated, interdependent systems.  A malpractice monitoring system that only catches super villains isn't that helpful.

Consider some statistics.  Over the last 10 years there were on average 14,787 medical malpractice payments reported to the NPDB each year.  For the sake of argument let's suppose each and every one of those involved a death.  Well, the IOM estimates there are 44,000 preventable deaths caused by medical errors each year, just in hospitals.  So even using charitable assumptions there are two preventable deaths outside the NPDB system for every one that makes it in.  And when you use less favorable assumptions- fewer than a third of NPBD med mal payments involve a fatality and estimates of preventable deaths due to error go much higher- it's clear that the world outside the NPBD system is  a lot bigger and no less consequential than the world inside it.

Oregon's reform is an acknowledgment of that reality, and intended to encourage institutions to dig deeper into adverse events to better understand why they happened and prevent their recurrence.  It's meant to impact the broad middle ground where most practice is, not the narrow extreme.  And where a provider is at the extreme you have to consider the chance they wouldn't resolve in mediation and they'd get reported to the NPDB anyway.

Opinions will vary, but to me the NPDB issue looks like a small cost for a potentially large gain in patient safety.  I'm surprised and disappointed Public Citizen objects to that.

Real Tort Reform

I don't have time now to do a full write-up of what I think tort reform should look like and why, and to my surprise I discovered I don't need to.  I guess I'm not the first person to think that a workers comp style process is applicable to Medical Malpractice.  Closer to home, I found that Jack Roberts had written about this very concept back in 2009 in the O (emphasis mine):

Other proposals are more specific to medical malpractice, such as specialized health care courts and safe-harbor practices to protect doctors from liability even if something goes wrong. But maybe it's time to consider a more radical reform, such as a system of no-fault insurance for medical malpractice similar to the workers' compensation system.

Since the adoption of workers' comp laws early in the last century, workers injured on the job are covered without regard to whether the injury was caused by the negligence of the employer, a co-worker, the worker himself or simply bad luck. Injured workers have their medical bills and other out-of-pocket costs covered as well as receiving compensation for loss of income and certain general damages in accordance with an established schedule. In return, they give up the right to bring an individual lawsuit against their employer and with it the hope of winning a lottery-size award or settlement.

Applied to medical malpractice, such a system would compensate any patient whose surgery or other treatment (or lack of treatment) resulted in an adverse result, whether or not the doctor, hospital or nurse was at fault. It could redirect resources currently spent finding fault to compensating patients who have been harmed. And it would recognize that even where medical providers have performed their jobs badly, large jury verdicts are not paid by the wrongdoers but shared by everyone through the insurance system.

 To get a sense of how much more efficient workers comp is at delivering benefits than med mal, let's look at Oregon state wide experience:

ALAE are expenses that can be directly attributed to a specific claim.  So the cost of a court filing for instance is particular to a claim while the cost of a claims department generally is not.  In practice, for these lines ALAE is mainly defense counsel.

What these figures show is that from 2003 to 2010 only half of the med mal premium dollars went to indemnity payments to claimants.  The rest was chewed up by defense costs, overhead and profit.  In contrast only 13% of the Workers Comp premiums were diverted in this way.  The difference is even more striking when you realize med mal claims are much more likely to have a plaintiff's attorney involved than workers comp, and they are paid from indemnity proceeds.  So not even half of the med mal premium money actually reaches patients suffering harm.

A lot of ink has been spilled on the extension of a tort cap, but I think all of the above shows that we need to ask a deeper question.  Does the way we've structured Medical Malpractice liability make sense?  As our experience with Workers Compensation shows, alternate structures exist that have far less costly processes for adjudication.

CCO Bill and Tort Cap

The Oregon Legislature is trying to figure out whether or not to include a tort cap in the CCO bill.  The stakes are high, as legislators are expecting up to $2.5 billion in federal aid if the CCO bill passes.  I don't know the politics well enough to guess what would happen if a CCO bill doesn't pass in this session.  Maybe the federal money will still be there next year, maybe not.  But since the state already banked savings resulting from CCO's in the current biennium budget, it doesn't really matter.  The bill needs to pass.

For that reason I think Democrats need to hold their noses and pass the bill with the tort cap included.  While it is true that Republicans are engaging in hostage taking and you risk encouraging such behavior by giving in, there are some mitigating factors.

• One of the central purposes of CCO's is to save money by reducing unnecessary or ineffective care.  The tort cap may be politically undesirable and only marginally effective, but however slightly it still promotes the goals of the CCO.  Tacking this on isn't as irresponsible as would be say, a demand for PERS reform or tax cuts.
• Passing the CCO bill with a tort cap does not forestall pursuing more effective tort reform in the next session.  Passage of a more comprehensive reform which affected all providers state wide would render the CCO compromise moot.  And make no mistake, there is ample reason to pursue tort reform quite apart from CCO's.

 Given the money at stake and the relatively small compromise needed, legislators would be grossly negligent if they fail to pass this bill.  Jawbone and posture all you want.  Call out the fine 15 for committing to the proposition that $20M in annual savings is worth more than $2.5B, a trade that takes 125 years to pay off.  But at the end of the day, we need this bill.  Get it done.