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Harmony Miller
Harmony Miller
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A new way to curb medical malpractice claims? Oregon considers “Safe Harbor” policy

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Oregon Governor John Kitzhaber’s Patient Safety and Defensive Medicine Workgroup is preparing to present their findings on creating a safe harbor policy with respect to adverse medical events, as reported by OPB last week. The Workgroup has been tasked with considering how to reduce the cost of medical malpractice lawsuits.

The Workgroup is comprised of physicians, lawmakers, a health executive, a personal injury attorney, and a member of the public. Many in Oregon anxiously await what the Workgroup might have come up with in an effort to curb medical costs associated with malpractice suits and the practice of what many doctors claim is “defensive medicine”: ordering unnecessary procedures and tests in an effort to ward off the threat of litigation.

“Safe harbor” legislation may take various forms, but in the simplest terms it is a policy that provides protection to physicians and hospitals, or relief from liability in situations where negligence may have occurred, in an effort to open communication between the provider and patient. Safe harbor policies could be as general as allowing providers to offer apologies without fearing that their words will later be used against them in a lawsuit, or as specific as outlining a process of claim resolution outside of the civil courts through mediation. Safe harbor policies typically relate to the liability exposure that physicians and hospitals experience when patients feel that medical negligence caused them harm. While many patients would probably welcome a heartfelt apology from their doctor after a mistake was made, I would bet that most patients would not want to give up their right to hold the physician accountable for negligence in order to get that apology.

There are a couple of issues that cannot be ignored when it comes to the assumptions the Workgroup may be making with respect to the cost of litigation in medicine.

First, there is no agreed-upon statistic of how big a part of the overall health care industry medical malpractice lawsuits are. There is no central reporting agency for these figures, and the figures cited by physician groups are usually significantly higher than those cited by plaintiff’s lawyers. I think the truth is probably somewhere in the middle: there is certainly a dearth of reliable, reported data on the relative impact of malpractice claims in the overall healthcare industry, and no method to track this accurately nationwide. There is also no clear definition of what these estimates of the cost of malpractice actually include – lost productivity for the injured person, the cost of future care, lost productivity while the physician participates in their defense, the cost of hiring expensive medical experts or attorneys, or simply the dollar value of the claims paid.

Kaiser Family Foundation (KFF), relying on data from the National Practitioner Data Bank (NPDB), estimates Oregon’s total paid malpractice claims in 2011 were $31,966,750. That’s only approximately 1.01% of the total claims paid in the United States for 2011. The average claim payout for Oregon’s 80 documented paid malpractice claims for 2011 was $399,584. Using these figures, this amounts to malpractice payouts of $3,211.77 per licensed physician in Oregon in 2011—lower than the national average of approximately $3,950 per licensed physician. Oregon’s malpractice claims represent less than 1% of the national malpractice claims for 2011.

When we consider that Oregon’s overall health care expenditures in 2011 were over $25 billion dollars, malpractice claims are only .127% of Oregon’s overall health expenditures for the year. For the United States as a whole, malpractice claims are .152% of the overall health expenditures for 2011 (if we rely on the NPDB figures). In all fairness, considering that KFF’s data is pulled from the National Practitioner Data Bank, it is conceivable that medical malpractice costs are higher than what is presented here. It is unlikely, however, that the actual cost is 10% higher than these figures suggest, as the tort reform lobby has suggested in recent months. Estimates for 2008 were 2.4% of total healthcare spending nationwide went to malpractice claims, a figure that is supported by national data and put forth by respected physicians in a national study.

A related argument put forth by supporters of tort reform is that medical malpractice lawsuits are driving up the cost of malpractice insurance for doctors. In Oregon, at least, this is another pervasive myth that has been propagated despite clearly contradictory data: Oregon’s largest malpractice insurer, The Doctor’s Company, reduced malpractice rates by 8-10% in 2006-2008, and again by 5% in 2010. Perhaps errors in reporting or interpreting these figures are as common as the medical negligence errors that put the physician lobby on the defense in the first place.

The second issue that the Patient Safety and Defensive Medicine Workgroup cannot ignore is how the concept of practicing “defensive medicine” benefits physicians. In the U.S. healthcare system, physicians are largely paid on a fee-for-service basis. That is, a physician performs an exam, orders a test, or sees a patient and is able to bill the insurer, patient, or government for each part of that service. Reimbursement varies depending upon the insurance coverage, but generally, the physician will recover some portion of the billed amount for most services provided.

As healthcare costs rise, physicians and their lobby (the AMA) have sought to find an explanation outside of the walls of the hospitals and clinics where medicine is being practiced. Their solution was to claim that the rise in health costs is at least partly due to physicians having to practice defensive medicine to ward off the threat of frivolous malpractice claims.

Despite the gap in logic that the public has willfully ignored as they’ve accepted this explanation, there has not been another explanation ever put forth as incendiary as blaming trial lawyers for the rising cost of healthcare for the average American. Practicing “defensive medicine” has allowed physicians to blame lawyers for the tests and services that physicians order — even as those same physicians get paid for every procedure.

No incentive has yet been designed to discourage practicing defensive medicine on a widespread scale, although adoption of evidence based standards and clinical audits show promise. In a letter to the editor in the New York Times, Dr. Arnold Relman, a doctor and professor at Harvard Medical School, points out that America needs reforms to this fee-for-service model in order to control costs and improve care. Dr. Relman judiciously notes that “these reforms are, of course, impossible in a political climate controlled by the money of vested interests.” Taking money away is much harder than keeping it out of the wrong hands in the first place.

Safe harbor legislation has been passed, with varying degrees of failure and repeal, in Connecticut, Maine, Minnesota, Florida and Vermont. No state currently has any comprehensive safe harbor law with blanket protection for physicians that follow evidence-based care guidelines or clinical best practice guidelines

In 2010, Oregon was one of the few states that was awarded the Patient Safety Planning Grant from the Agency for Healthcare Research & Quality (AHRQ) to explore how patient safety and the liability system may be helped by safe harbor legislation. The final progress report from the Oregon Patient Safety Commission and Office for Oregon Health Policy and Research (OHPR) may have surprised those already convinced that safe harbor laws would reduce liability costs. After considerable analysis, the Commission found that any safe harbor legislation would be most successful in improving patient safety. Obviously, this is a preferable outcome to any legislation that impacts the way that patients receive care.

The Oregon Commission’s findings did not show, however, that safe harbor laws would have any considerable impact on liability system costs. The Commission found that implementation of the laws would prove difficult and, if Oregon does forge ahead, it may be charting its course in the dark. As mentioned, at least five other states have had some form of safe harbor legislation enacted but repealed, abandoned, or found to be ineffective at lowering liability costs or improving patient safety.

Oregon may first need to prioritize the desired outcomes for safe harbor legislation: will it be to improve patient safety, or to reduce liability costs? Those ideas are not mutually exclusive, nor are they dependent upon each other for change to occur. Nonetheless, the Oregon legislature may have to decide if we can accept reducing liability costs without improving patient safety.

In the weeks ahead, it will be interesting to see what Governor Kitzhaber’s Workgroup proposes for safe harbor legislation in Oregon or how they feel it could be realistically enacted. Will it be a policy that allows for more open communication between doctor and patient, while preserving the patient’s rights should they wish to pursue a claim for the physician’s negligence? Or will it be a policy that focuses largely on the practice of defensive medicine in support of adopting clinical best practice guidelines and EBM? Oregon has long been at the forefront of progressive politics with regard to healthcare. Given Governor Kitzhaber’s understanding of the health system, and the reforms desperately needed to improve it, hopefully careful and critical consideration will be given to any proposals put forth.