• How malpractice suits might be a (small) quality-improvement tool

    The following is a guest post by Nicholas Bagley, University of Michigan Assistant Professor of Law.

    Aaron’s post on the scariest medical story of 2013—an article about a Texas neurosurgeon with a penchant for maiming and killing patients—got me thinking. The author of the story, Saul Elbein, asks why no one had stopped this surgeon much, much earlier. Part of the problem, he thinks, is a suite of Texas medical malpractice reforms that capped pain-and-suffering losses and sharply limited hospital liability.

    Until recently, this sort of claim would have made me wince. In principle, of course, medical malpractice claims are supposed to encourage physicians to practice high-quality medicine. In practice, however, there are lots of reasons to think they don’t. First, only a tiny fraction (maybe about 2%) of those injured by medical negligence ever sue. Plus, many of the lawsuits that are actually filed (maybe around one-third of them) don’t appear to involve any negligence at all. The mismatch between negligence and claims attenuates the incentives that physicians have to adjust their practice patterns to avoid lawsuits.

    Second, the tort system’s primary leverage is financial: it penalizes those whose conduct we’d like to change. But almost all physicians have malpractice insurance, and a physician found liable for malpractice typically won’t see his or her insurance rates go up as a result. The financial signal just doesn’t get through.

    Third, physicians can’t always anticipate what the law expects of them. A physician is supposed to act like a reasonably competent physician would have acted under the circumstances. Often, however, there’s no consensus about how best to treat a given patient. What’s a physician supposed to do?

    For these and many other reasons, I had basically written off malpractice as a tool for promoting high-quality care. Two recent studies, however, have pushed me to reconsider. The first is from Joanna Schwartz at UCLA, who interviewed dozens of hospital risk managers and received survey responses from hundreds more. The paper is worth a full read, but what caught my attention was the following:

    [T]he vast majority of my interviewees and survey participants report that litigation data has proven useful to hospital patient safety efforts. Lawsuits reveal allegations of medical negligence and other patient safety issues that fall through the cracks of hospitals’ other reporting systems; depositions and discovery materials surface previously unknown details of adverse events; analyses of claim trends reveal problem procedures and departments; and closed claims files serve as rich teaching tools.

    In other words, malpractice claims generate information that hospitals can then—at least in principle—use to improve patient care. That’s so even though malpractice claims are weak and often-misleading signals about quality problems: they still provide some information about what’s actually happening on the hospital floor. And when you’re trying to improve patient care, information is key. Schwartz’s study has limitations, not the least of which is that it relies on interviews with risk managers who may overestimate the usefulness of malpractice claims to their efforts. But especially as hospitals acquire more and more physician practices, it seems worth exploring further the link between malpractice and hospital quality-improvement efforts.

    A second study, this one by Michael Frakes at Cornell, is even more surprising. Historically, the law has set the standard of care for physicians with reference to what a reasonable local physician would have done under the circumstances (known as the “locality rule”). In some states, however, the locality rule has over the past half-century given way to a national standard that measures a physician’s conduct against what a reasonable physician in the United States would have done.

    Frakes exploited this shift to run a nifty experiment: when states moved from the locality rule to the national standard, did physicians in those states begin to practice more like physicians in other states? Turns out they did. As Frakes writes:

    Focusing on obstetric and cardiac practices, I find evidence of regional convergence in the utilization rates of the targeted treatments and diagnostic procedures upon the abandonment of a locality rule. For instance, in the case of cesarean deliveries, I find evidence consistent with a convergence effect in which 40% of the gap between state and national utilization rates is closed in connection with the adoption of a national-standard rule.

    This floored me. I would have bet a substantial sum of money that the change to a national standard—a change that most physicians are completely unaware of—would have had at most a trivial effect on physician practice. I was wrong.

    Contrary to what some have argued, what the Frakes study suggests is not that the national standard or the locality standard is the right approach. To make that judgment, you’d have to know more about which treatments work best for which conditions. (For what it’s worth, Frakes doesn’t find an effect on outcomes in his study.) What the study does suggest, however, is that tinkering with malpractice law has the potential to aid in improving quality of care. Imagine, for example, that physicians were given safe harbors from malpractice liability if they adhered to evidence-based practice protocols. Such safe harbors might powerfully encourage adherence to the protocols.

    Neither the Schwartz nor the Frakes study, of course, remotely suggests that the benefits of the malpractice system outweigh its substantial costs. I’m still skeptical about that. Nor is malpractice reform likely to do much to curb runaway spending on health care; I’m with Aaron in thinking that economic incentives, not liability concerns, are the big problem there. But they do suggest a modest silver lining to an otherwise grim story. The tort system can’t fix all the quality problems that plague medicine. But maybe—just maybe—it can help.

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    • One of my biggest disappointments in the implementation of ACA was the decision to punt on essential health benefits (i.e., the decision by HHS to allow each state to choose a “benchmark plan” rather than adopting a national standard). Few experts have commented on the decision, which I assume is because they either support ACA and don’t want to criticize or don’t support ACA and have no complaints about less than perfect (my view) implementation. So here is a guest post by a Univ. of Michigan law professor who has written an article on the very subject (which is available for download on the Social Science Research Network web site). It’s an excellent article, devoted mostly to the legality of the method/procedures used by HHS in choosing the benchmark plan approach. But the article also includes the authors’ comment that HHS took the approach at least partly as the result of politics, namely to avoid a partisan battle in defining essential health benefits. I agree with the authors, but only with this qualification: the administration had already politicized essential health benefits with its decision to include birth control pills. What if the administration had not, would HHS have gone with national standards? That such an important issue would turn on a $70 per month benefit (the cost of birth control pills) is depressing.

    • It seems that what you have concluded is that malpractice is a two edged sword. We can’t do without it while on the other hand with it we cause all sorts of problems.

      One of the problems not mentioned is that malpractice creates the silence of physicians. If a physician makes a mistake the best thing for health care quality is for that mistake to be discussed by everyone. It is near impossible in health care not to make mistakes so one should recognize the difference between a mistake, negligence and a medical professional practicing above the level of their knowledge and ability. This is something malpractice generally doesn’t concern itself with.

      When I worked a short stint in the chemical industry many years ago (in WV) I took note that they knew how many mistakes would be made over an interval of time and worked towards increasing that interval. Mistakes in the type of chemical plant I worked in could blow up an entire building, but most mistakes were small without loss of life or limb and each mistake was studied. A free ham was given out to all employees if there were no accidents over a period of time longer than expected. That encouraged a lot of cooperation spreading knowledge of where danger lurked.

    • Here’s the central problem with the malpractice system: it is based on a lie.

      The lie is as follows:

      Physicians must break a “standard” of care in order to be guilty of malpractice.

      This is not true.

      A “standard” can not be set by one person. Yet in malpractice cases, a single person (hired gun expert) is the one who determines whether a “standard” was broken. And that person has a PROFOUND motivation to lie/mislead people on a jury.

      Jury members are incapable of deciding whose hired gun expert is right, and therefore the claim that phsyicans have to break a “standard” of care in order to be guilty of malpractice is a lie.

    • Does this imply that providers have insufficient information about themselves? Are alternate approaches then possible?

    • The current system for compensating injured patients has many shortcomings, arbitrariness being a major one: it’s unpredictable, and depends on many variables that have little to do with the physician’s conduct. An alternative is a no-fault system: compensate the injured patient for whatever actual damages she sustains without regard to the physician’s conduct. See, both systems reward the injured patient without regard to the physician’s conduct,, it’s just that under no-fault it’s explicit, avoids the transaction costs (trials, etc.), and is predictable.