Tougher State Malpractice Laws May Not Reduce Defensive Medicine

October 27, 2014

Changing laws to make it more difficult to sue physicians for medical malpractice may not reduce the amount of “defensive medicine” practiced by physicians, according to a new study.

Studying the behavior of emergency physicians in three states that raised the standard for malpractice in the emergency room to gross negligence, RAND Corp. researchers found that strong new legal protections did not translate into less-expensive care.

The results of he RAND study were published in the Oct. 16 edition of the New England Journal of Medicine.

“Our findings suggest that malpractice reform may have less effect on costs than has been projected by conventional wisdom,” said Dr. Daniel A. Waxman, the study’s lead author and a researcher at RAND, a nonprofit research organization. “Physicians say they order unnecessary tests strictly out of fear of being sued, but our results suggest the story is more complicated.”

Defensive medicine has been cited as a major contributor to the estimated hundreds of billions of dollars of unnecessary health care spending in the United States. Many experts have advocated malpractice reform as a key to reining in health care costs.

RAND researchers looked at three states — Georgia, Texas and South Carolina — that about a decade ago changed the legal malpractice standard for emergency care to gross negligence. Other states use the more common ordinary negligence standard, or a failure to exercise reasonable care.

The higher standard means that for physicians accused of malpractice in the three states examined, plaintiffs must prove that doctors consciously disregarded the need to use reasonable care, knowing full well that their actions were likely to cause serious injury.

“These malpractice reforms have been said to provide virtual immunity against lawsuits,” said Waxman, who also is an emergency medicine physician at the David Geffen School of Medicine at UCLA.

Researchers examined 3.8 million Medicare patient records from 1,166 hospital emergency departments from 1997 to 2011. They compared care in the three reform states, before and after the statutes took effect, to care in neighboring states that did not pass malpractice reform.

Most Doctors Sued Sometime in Career

The study examined whether physicians ordered an advanced imaging study (CT or MRI scan), whether the patient was hospitalized after the emergency visit and total charges for the visit. Advanced imaging and hospitalization are among the most costly consequences of an emergency room visit, and physicians themselves have identified them as common defensive medicine practices.

The malpractice reform laws had no effect on the use of imaging or on the rate of hospitalization following emergency visits. For two of the states, Texas and South Carolina, the law did not appear to cause any reduction in charges. Relative to neighboring states, Georgia saw a small drop of 3.6 percent in average emergency room charges following its 2005 reform.

“This study suggests that even when the risk of being sued for malpractice decreases, the path of least resistance still may favor resource-intensive care, at least in hospital emergency departments,” Waxman said.

The study appears to track with one released in 2013 that found Medicare patients receive more diagnostic tests and emergency department referrals when treated by physicians who worry more about malpractice liability, regardless of whether states have adopted common malpractice tort reforms. According to this study by the Center for Studying Health System Change (HSC) in the August Health Affairs, physicians’ perception of their risk —rather than their actual risk — of malpractice liability predicts their practice of defensive medicine.

In 2010, researchers at the University of Iowa similarly found that physicians’ fears of being sued for malpractice are out of proportion to their actual risk of being sued and that as a result malpractice reforms may not be effective in altering defensive medicine practices.

However, a study done with Pennsylvania doctors and reported in 2011 found that one-fifth of tests that bone and joint specialists order are because a doctor fears being sued, not because the patient needs them.

Support for the new RAND study was provided by the Veterans Affairs Office of Academic Affiliations through the VA Health Services Research and Development Advanced Fellowship Program, and the core funding programs of the RAND Health and the RAND Institute for Civil Justice.

Other authors of the study are Michael Greenberg, M. Susan Ridgely and Paul Heaton of RAND, and Dr. Arthur L. Kellermann of the Uniformed Services University of the Health Sciences.

Damages Cap Study

Meanwhile, another study supported by the RAND Institute for Civil Justice, the National Institute on Aging, and the National Institutes of Health and released by Health Affairs, examined the impact of another medical liability reform—specifically, caps on non-economic damage —on the average size of medical professional liability (MPL) insurance claim payments, and also compared how the impact differs according to the dollar amount of the cap.

The researchers found that, overall, non-economic damage caps reduced average payments by $42,980 (15 percent), compared to having no cap at all. A $250,000 cap reduced average payments by $59,331 (20 percent), and a $500,000 cap had no significant effect, compared to no cap at all.

The national average payment stabilization appears to coincide with increases in the number of states with non-economic damage caps in 2003, the study’s authors said.

They also said non-economic damage caps are particularly effective for medical specialties with high average-payment sizes, such as pediatrics and obstetrics.

Data for the damages cap study were obtained from the Data Sharing Project of PIAA, an association of MPL insurers. Researchers analyzed more than 200,000 claims, or about one-fourth of medical liability claims in the U.S.

“This study sheds critical light on the fact that MPL reforms work well in keeping costs down and promoting greater access to healthcare,” said Brian K. Atchinson, president and CEO, PIAA.

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