Studies Examine Effect of States’ Medical Malpractice Laws
Several studies released this week examine how tort reform laws in different states -- including 27 with caps on noneconomic damages in malpractice suits -- have affected physician services and malpractice insurance premium rates, the Washington Times reports (Higgins, Washington Times, 6/1). Two of the studies, published in Wednesday's Journal of the American Medical Association, are part of a larger effort by the Pew Charitable Trusts to establish facts in the ongoing debate over tort reform, according to the Pittsburgh Post-Gazette.
Two other studies were published online in the journal Health Affairs (Snowbeck, Pittsburgh Post-Gazette, 6/1). A fifth study was released by the Kaiser Family Foundation (Girion, Los Angeles Times, 6/1). Summaries of the studies appear below.
States that capped noneconomic damages in malpractice cases experienced a 2.4% increase in overall physician supply compared with states that have no such caps, holding other factors constant, according to a study in Wednesday's JAMA. The study says physician services increased in every state from 1985 to 2001, but states with damage caps saw a higher than average increase in the number of doctors than states without tort reform. In addition, the study finds that more of the services growth was among doctors with 20 or more years of experience (Washington Times, 6/1). Overall, the study finds that the supply of professionally active doctors throughout the nation increased from 497,140 in 1985 to 709,168 in 2001 (AP/St. Petersburg Times, 6/1).
In an accompanying editorial, Peter Budetti, a professor at the University of Oklahoma College of Public Health, said the data shows the impact of tort reform on physician supply is "relatively modest."
William Sage, a law professor at Columbia University and director of Pew's Project on Medical Liability in Pennsylvania, said, "It is clear that both physicians and patients are victims of a seriously flawed malpractice system," adding, "In particular, the process of airing and resolving claims through litigation is destructive for all concerned, while the market and regulatory dynamics of malpractice insurance drive premiums into crisis cycles with pernicious consequences." Sage called on the federal government to make available funding for demonstration projects to study comprehensive malpractice reform (Pittsburgh Post-Gazette, 6/1). An abstract of the study is available online.
Most doctors in Pennsylvania are practicing "defensive medicine" or ordering more tests and procedures that might not be medically necessary but could help shield them from lawsuits, according to a second study in Wednesday's JAMA (Washington Times, 6/1). For the study, Harvard School of Public Health researchers in 2003 surveyed 824 physicians in Pennsylvania in six specialties: emergency medicine, general surgery, orthopedic surgery, neurosurgery, obstetrics/gynecology and radiology (Reuters/New York Post, 6/1). Ninety-three percent of participants said they sometimes or often practiced defensive medicine, according to the study (Tanner, AP/Long Island Newsday, 5/31).
Fifty-nine percent of participants said they often ordered more diagnostic tests than were medically indicated, and 52% said they frequently referred patients to other doctors even though the referrals were not medically necessary. Forty-two percent of the physicians surveyed said that liability concerns forced them to restrict some practices since 2000, including eliminating procedures and avoiding patients with complex medical problems or those who "appeared litigious," the Post-Gazette reports. However, the study authors noted that distinctions between appropriate and inappropriate care are not always clear and that it can be difficult to account for factors other than malpractice for practicing defensive medicine (Pittsburgh Post-Gazette, 6/1).
According to the AP/Newsday, the survey was completed shortly after several malpractice insurers had exited Pennsylvania and premiums charged by other insurers had "risen dramatically" (AP/Long Island Newsday, 5/31). "The most frequent form of defensive medicine, ordering costly imaging studies, seems merely wasteful, but other defensive behaviors may reduce access to care and even pose risks of physical harm," lead author David Studdert wrote in the report (Reuters/New York Post, 6/1). In his editorial, Budetti said, "Perhaps the greatest irony is that defensive medicine may be counterproductive and actually might increase malpractice risk" (AP/St. Petersburg Times, 6/1). An abstract of the study is available online.
A separate study published in the online journal of Health Affairs says that the presence of caps on noneconomic damage awards has an impact on where doctors choose to practice, particularly in rural areas (Washington Times, 6/1). The study, by researchers at HHS and the Agency for Healthcare Research and Quality, finds that the 27 states with caps on noneconomic damages had 2.2% more physicians per capita than states without such caps (Los Angeles Times, 6/1).
Rural counties in states with noneconomic damage caps had 3.2% more physicians per capita than rural counties in states without caps, according to the study (Pittsburgh Post-Gazette, 6/1). According to study co-author William Encinosa, a senior economist at AHRQ, obstetricians and surgeons -- who are considered more vulnerable to lawsuits -- were most influenced by the presence or absence of caps (Washington Times, 6/1).
Donald Palmisano, former president of the American Medical Association, said, "Skyrocketing medical liability premiums are forcing physicians in states without reforms to limit services, retire early or move to states with reforms -- with devastating results for patients seeking medical care."
However, Douglas Heller, executive director of the California-based Foundation for Taxpayer and Consumer Rights, attributed the relatively low premiums in California to rate regulation in the state, not caps on damage awards (Los Angeles times, 6/1).
Frank Clemente, a spokesperson for Public Citizen, said many states with caps are considered conservative and have experienced large population growth. "Doctors are like anybody else, they go where the business is," he said (Freking, AP/Miami Herald, 6/1). The study is available online.
Another study published in the online edition of Health Affairs found that high damage awards and financial settlements for patients are not responsible for the "explosive increase" in doctors' malpractice insurance premiums, the Boston Globe reports. Lead author Amitabh Chandra, an assistant professor of economics at Dartmouth College, and colleagues examined information from the National Practitioner Data Bank on actual payments made to patients between 1991 and 2003 and found that payments grew an average of 4% annually during the study period, or 52% overall since 1991. However, payments increased 1.6% annually since 2000, according to the study (Kowalczyk, Boston Globe, 6/1).
According to Chandra, the average court judgment in 2003 was $461,000, and 96% of cases that year were settled out of court for an average of $257,000. The researchers conclude that malpractice payouts have risen approximately in line with increases in medical care costs. Noting that doctors' malpractice insurance premiums grew far faster than health care costs -- by double-digit percentages in some specialties -- the researchers say the higher premiums likely reflect insurers' efforts to make up for documented losses in the bond market from 1998 to 2001.
However, Larry Smarr, president of the Physician Insurers Association of America, said that investment losses accounted for at most 16% of premium increases in recent years. "We don't deny that there are multiple reasons why (malpractice premium) rates are going up. [But it's] mainly due to the increase in the value of claims," he added (Los Angeles Times, 6/1). Other studies have found that doctors' malpractice insurance premiums increased more quickly in states without caps on noneconomic damages, Palmisano noted.
Barry Manuel, chair of insurer ProMutual Group, said the study authors did not account for the rising cost of defending malpractice cases (Boston Globe, 6/1). The study is available online.
A separate study released by the Kaiser Family Foundation says total malpractice payments increased an inflation-adjusted 3.8% annually between 1991 and 2003, the Los Angeles Times reports. In addition, the study says growth in the number of practicing doctors outpaced the increase in the number of malpractice claims paid through settlements or jury awards between 1991 and 2003, resulting in a decrease in the average number of malpractice claims per physician.
Lead author Budetti, who also wrote the editorial accompanying the JAMA studies, said, "For most doctors, there is a perception of a serious problem. [But] the likelihood of having a claim paid on your behalf over the years has diminished" (Los Angeles Times, 6/1). The study is available online.
NPR's "All Things Considered" on Tuesday reported on the studies. The segment includes comments from Chandra, Encinosa, Palmisano and Sage (Rovner, "All Things Considered," NPR, 5/31). The complete segment is available online in RealPlayer.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.