Posted On: February 23, 2014 by Patrick A. Malone

Two Different Responses to Medical Malpractice Claims

The latest episodes in the long-running medical malpractice drama are brought to you by the states of Maryland, Kentucky and Florida. Their responses to medical mistakes show how different perceptions drive policy, one for the good, one not so much.

Maryland is contemplating the creation of a birth injury fund from which children and families would be compensated for health problems caused by medical mistakes during birth. On its face, sounds like it might be a good idea, but the legislation would limit the ability of families to pursue medical malpractice lawsuits.

That’s tort reform, which, as applied to medical malpractice, often means limiting an injured party’s rights, not expanding the ability to seek redress (See our blog, “A Case Study of Tort Reform’s Misleading Claims.”

The “no-fault” birth injury fund idea was implemented in Virginia in 1987, but it gets mixed reviews. The fund’s financial viability is uncertain, it might not cover all the costs of raising a child with a birth injury and many analysts believe it hasn’t reached the societal goals of better obstetric coverage for all.

As explained by AboutLawsuits.com, the Maryland fund was proposed by Dr. Dan K. Morhaim, a member of the House of Delegates, to provide compensation for injured patients while shielding medical personnel and hospitals from jury verdicts with substantially more compensation. Morhaim claimed that such a fund would mean more infants would be compensated because their parents wouldn’t have to win a trial.

Look closely at the idea, however, and you see that the fund would protect doctors and hospitals that provide substandard care. So-called “reform” shouldn’t sweep aside the problems in favor of quicker — and often less — compensation, it should improve care in the hope of preventing birth injuries.

Only children born in Maryland who were harmed by birth-related neurological injury would be eligible for compensation by the fund, as determined by an administrative law judge. There would be a one-time payment of only as much as $100,000. It would include lifetime medical care with no cap, and lost earnings compensation. Each case would be reviewed by the Maryland Department of Health and Mental Hygiene and the Maryland Board of Physicians, who would review hospitals and doctors, respectively, for indications of substandard care.

Which seems to us a little like the fox guarding the hen house.

AP covered a story about legislation pertaining to all medical malpractice claims, not just birth injuries, that’s pending in Kentucky, where panels of “medical experts” would offer opinions on whether standards of care were violated, but would not make findings of fact or conclusions of law.

"How is it fair for a panel to render an opinion, but not tell any of the parties the basis for the opinion?" one opponent asked. "That can't be fair. That's fundamentally unconstitutional."

In contrast, in Florida, “‘Disclose-and-Investigate’ Approach to Malpractice Claims Pays Off,” according to Gastroenterology & Endoscopy News. A study showed that when the gastroenterology division of the University of Michigan Health System (UMHS) changed its confrontational approach to malpractice claims in favor of a more honest and immediate one, it benefited enormously. And so do patients.

The study showed that the more honest, direct approach reduced the number of malpractice claims, as well as the costs per claim, the total costs for defending claims and the time it took to resolve claims.

Doing the right thing, in other words, was a win-win, and the article says that changing the policy “appears to be generating improvements in quality of care.” That won’t surprise regular readers of this blog.

In 2001, UMHS replaced its traditional “deny-and-defend” approach to claims of medical error with a “disclose-and-investigate” approach. Before it did so, any malpractice claim immediately was referred to a defense attorney. Now, a team of physicians, nurses and administrators review each claim, and if it determines that the care was unreasonable, the finding is disclosed, an apology to the patient is extended and compensation is offered, irrespective of any outside legal action.

Of course, if the team determines that the care was reasonable, the claim is defended.

These results aren’t unprecedented. The article refers to a study published in 2010 in The Annals of Internal Medicine that showed a 65% reduction in lawsuits, a 59% reduction in both total liability and patient compensation and a 61% reduction in noncompensation-related legal costs after implementing a medical errors disclosure program. That study also showed that the time between reporting a claim and its resolution was reduced by more than one-third.

Key to the UMHS experiment was that it wasn’t primarily about managing risk; it was about improving care. The team of reviewers is charged not only with identifying and disclosing errors, but figuring out how to prevent the same ones from recurring.

One staff physician called it a “culture change,” and told the journal, “One problem with the deny-and-defend approach is that it does not help to reduce errors and therefore may not best serve the overarching goal of improving patient safety.”

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