Georgia Physician Magazine

By
Robert Betz, Ph.D.,
and Carolyn Hickey

At Issue
Medical liability reform and patient safety initiatives top federal and state legislative agendas.

When a medical company's budget for expected claims and litigation significantly outweighs its annual budget for research and development, a serious problem exists. Patients permanently damaged from medical mistakes and doctors abandoning their professions for fear of litigation increases (all as healthcare costs continue to swell) further exacerbate this problem. Reform of this problem rests on two directly related public policy issues: medical liability system changes and implementation of patient safety initiatives.

In Washington and in most state capitols, these issues have been added to our lawmakers' health policy vernacular and top most legislative agendas. Businesses and insurance companies have been pitted against lawyers and consumer advocates in this highly contested battle. As part of the larger picture of President Bush's tort reform, changes to the medical liability system are at the pinnacle of his health agenda for the 109th Congress.

In February, the President signed into law a measure transferring a majority of litigation to federal courts, in theory making it more difficult for class-action lawsuits to multiply. Bush and his Republican counterparts hope this act will provide the necessary momentum to enact medical liability legislation that has failed miserably in previous Congresses.

Legislation recently introduced by two U.S. senators aims to cap non-economic damages at $250,000. Seven times in the past decade, the U.S. House has passed similar proposals, which either died or were filibustered in the Senate. However, due to Republican gains in both chambers, this Congress will be the most favorable in several decades for supporters of curbing jury awards.

As Congress ramps up for another encore of this debate, 27 states already have enacted laws capping jury awards to victims of medical mistakes from $250,000 to $1 million. Additionally, insurers in some states have agreed to temporarily reduce premiums as trade-offs for limits on awards.

Georgia is one of those states. On Feb. 16, Gov. Sonny Perdue signed into law Health Care Tort Actions, legislation that will most likely take Georgia off the American Medical Association's list of medical liability crisis states. With the backdrop of Atlanta's Northside Hospital during the signing, the first bill enacted this session will help control Georgia's rising double-digit liability insurance premiums.

Health Care Tort Actions law means:

Joint and Several Liability is replaced with Proportionate Share Liability, whereby a defendant would only be responsible for his relative share of the damages in question.
Liability for non-economic damages is limited to a total of $1,050,000, with $350,000 limitation on providers and $350,000 per facility, up to $700,000, from all medical facilities.
No physician or healthcare provider will be liable for a claim arising out of emergency care in a hospital emergency department, obstetrical unit or surgical suite, unless it is proven by clear and convincing evidence that the provider showed gross negligence.
Expert witness rules require the "expert" to have either practiced or taught in the area of practice or specialty at issue for three to five years preceding the alleged negligence. This includes the Daubert standard for all cases.
Apologetic conduct or statements are prohibited from being admitted into evidence as an admission of liability.
An offering party may obtain litigation costs if the verdict is not at least 25 percent more favorable than the offer.
The plaintiff must file suit in a county where the most culpable defendant resides. Suits filed against individuals moderately involved simply because they live in more verdict friendly counties are discouraged.

Complementing this measure, one of the largest medical professional liability insurers in the state, MAG Mutual Insurance Company, pledged to rollback premiums by 10 percent, so long as the Georgia Supreme Court upholds the $350,000 cap. According to MAG Mutual, this rollback is valued at $20 million for the state's physicians.

Current legislative proposals are truly empty unless measures addressing patient safety initiatives are jointly implemented.

In February, the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) stated that the current medical liability system "fails patients because it does not effectively deter negligence, truly offer corrective justice or provide fair compensation to those who have been injured through the care process."

Among the 19 recommendations proposed, JCAHO advocates for creating an office in the U.S. Department of Health and Human Services (HHS) to set national priorities for patient safety, establish "pay-for-performance" strategies, strengthen physician accountability mechanisms and encourage adherence to clinical guidelines aimed at improving quality and reducing liability risk.

The Commission's redesign of the medical liability system aims to ensure "compensation for injured patients while encouraging healthcare providers and practitioners to report their errors, learn from their mistakes and take action so the same errors do not occur again."

In its bi-annual March report to Congress, the Medicare Payment Advisory Commission (MedPAC) recommends designing "a pay-for-performance program that rewards both improvement and attaining or exceeding certain benchmarks." MedPAC advises creating a budget-neutral program by setting aside a small portion of budgeted payments (1 percent to 2 percent) that will be redistributed based on performance.

Information technology also will play a vital role in improving quality and measuring improvements in pay-for-performance programs.

Among other states, Georgia's legislature has begun to address the need for electronic health records. On March 3, the state Senate passed S. 204, which will allow any provider to "create, maintain, transmit, receive and store records in an electronic format." The bill awaits House action.

Robert Betz, Ph.D, is president of Robert Betz Associates Inc. (RBA), a well-established federal healthcare policy consulting firm located in the Washington, D.C., area. Additionally, he serves as the president and CEO of the Health Industry Group Purchasing Association (HIGPA) and executive director of the American Association of Eye and Ear Hospitals (AAEEH). Betz is also an adjunct professor at The George Washington University, specializing in political science and health policy. For more information about RBA, visit www.robertbetz.com. Carolyn M. Hickey was a contributing author to this article.