Microsoft Word - Med Liab Report and Recs_FINAL Report with Appendix

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OregonHealthPolicyBoard

Officefor

OregonHealthPolicyandResearch



OregonMedicalLiabilityTaskForce

ReportandRecommendations

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SubmittedtotheOregonHealthPolicyBoard:

December2010

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TableofContents

Page

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MedicalLiabilityTaskForceMembership............................................................................... 3

ExecutiveSummary.................................................................................................................. 4

I. ChargetotheTaskForce.............................................................................................. 6

II. FrameworkforDeliberations....................................................................................... 6

III. Background.................................................................................................................. 7

IV. ReformConceptsSelectedforConsideration ........................................................... 14

V. RecommendationstoSupportandEncourage“DisclosureandOffer”Programs .. 15

VI. GranttoExploreEvidence‐BasedGuidelineSafeHarborApproach........................ 20

VII. AnAdministrativeSystemforCompensatingPatientInjuries................................. 21

VIII. Conclusion .................................................................................................................. 24

Appendix1.LiabilityCostTrends ......................................................................................... 26

Appendix2.TrendsinPhysicianPremiumsforMedicalLiabilityInsurance ...................... 28

Appendix3.TestimonyConcerningtheMedicalLiabilityPremiumSubsidy……..................30

Appendix4.ProposedadditiontoOregon’sInsuranceCode……………………………...34

Appendix5.Statemedicalerrordisclosurelaws................................................................. 35

Appendix6.RecommendedStudy. ...................................................................................... 38

Appendix7.MajorSourcesConsulted. ................................................................................. 41

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MedicalLiabilityTaskForceMembership



Co‐Chairs:

J.MichaelAlexander,JD

Swanson,Lathen,Alexander,

McCann&Prestwich,PC



JosephSiemienczuk,MD

ChiefMedicalOfficer

ProvidenceMedicalGroup‐North

ProvidenceHealth&Services



Members:



RickBennett

GovernmentRelations

AARP



PeterBernardo,MD

GeneralSurgeon,PrivatePractice



JeffreyBildstein,JD

VicePresident

WesternLitigation,Inc



JanetBillups,JD

OHSULegalCounsel

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JimDameron

ExecutiveDirector

OregonPatientSafetyCommission

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CraigFausel,MD

Physician/President&CEO

TheOregonClinic



ScottGallant

SelfEmployed

GallantPolicy

Advisors,Inc.

Members(cont.)

RobertHolland,MD

Physician&MedicalExaminer

GrantCounty

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JodieMooney,JD

DirectorofRiskManagement&

OrganizationalIntegrity

PeaceHealthOregonRegion



LauraPotter

DistrictExecutiveDirector

AmericanCancerSociety



ChristofferPoulsen,DO

EmergencyMedicinePhysician

EugeneEmergencyPhysicians

SacredHeartMedicalCenter



MarkStevenson

PresidentandCEO

CapitalPacificBank



LawrenceWobbrock,JD

TrialLawyer,PC

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Staff:

JeaneneSmith,MD,MPH

Administrator

OregonHealthPolicyand

Research



Lynn‐MarieCrider,JD

PolicyAnalyst

OregonHealthPolicyand

Research

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ExecutiveSummary

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TheMedicalLiabilityTaskForcewasappointedbytheOregonHealthPolicyBoardinMarch

2010todevelopmedicalliabilityreformproposalsforconsiderationbythePolicyBoardand

theLegislature.

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TheTaskForceidentifiedthreepatient‐centeredgoalsforsystemimprovementandagreed

thatsuccessfulmedicalliability

reformshouldfurtherthosegoals.Theyare:

1. Themedicalliabilitysystembecomesamoreeffectivetoolforimproving

patientsafety;

2. Themedicalliabilitysystemmoreeffectivelycompensatesindividualswho

areinjuredasaresultofmedicalerrors;and

3. Thecollateralcostsassociatedwiththemedicalliabilitysystem

(including

costsassociatedwithinsuranceadministration,litigation,anddefensive

medicine)arereduced.



TheTaskForceprioritizedthreereformconceptsforconsiderationbecausetheyseemedto

holdsomepromiseforhelpingachievethegoalsforsystemimprovement:Disclosureand

offerprograms,evidence‐basedguidelinesafeharbors,andhealthcourts.

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TheTaskForcechosenottolookforwaystoreduceindemnitypayments(thatis,payments

toinjuredpatients)primarilybecausenon‐economicdamagecaps—whichhavebeen

imposedinsomestatestoreduceindemnitypayments‐‐cannotbeimposedinOregon

withoutaconstitutionalchangethatthestate’svotershaverejectedtwice.Inaddition,

manymembersoftheTaskForcebelievethatthesystemshouldcompensatemore,not

fewer,individualsharmedbymedicalerrors.

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TheTaskForcemakesthefollowingrecommendationsdesignedtospurprovidersand

facilitiestodisclosemedicalerrorstotheirpatientsand,wherepossible,tooffer

compensationtopatientsharmedbythoseerrors:

• Thelegislatureshouldenactastatuteexplicitlyprovidingthatahealthcare

facilityorprovider’sdutytocooperatewithaninsurerdoesnotpreclude

disclosureofanadverseeventorthereasonsunderlyingittoapatientorthe

patient’sfamilyandthatsuchdisclosuremaynotbethegroundsforrefusalto

defendorforcancellationornonrenewalofcoverage.Thisshouldremove

insuranceconcernsasabarriertofulldisclosure.

• ThelegislatureshouldconsideramendingOregon’s“apology”law,which

precludesuseofstatementsmadetoapatientthatexpress“regretorapology”

forharmthatoccurredduringtreatmenttoproveliabilityinanegligencecaseso

thatthelawclearlyprotectsfacilitiesinadditiontophysiciansandmoreclearly

describeswhatstatementsareincludedinitsprotection.

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• Thelegislatureshouldconsiderrequiringprofessionalsandfacilitiestodisclose

topatientsadverseeventsoccurringasaconsequenceoftheirtreatmentandto

provideexplanationsforthem.

• TheOregonPatientSafetyCommissionshouldworkwithhealthcarefacilities

thatparticipateinitsvoluntaryerrorreportingprogramtoexperimentwith

disclosureprotocolsthatspecifywhattheyshoulddisclosetopatientsunderthe

reportingprogram.

• ThelegislatureshouldconsiderexpandingOregon’svoluntaryreportingprogram

topermitphysicianpracticestoparticipate,recognizingthatconfidential

reportingofmedicalerrorsservesadifferentalthoughcomplementarypurpose

thandisclosureoferrorstopatients.

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TheTaskForcemakesthefollowingrecommendationconcerningtheworkthathasbeen

fundedbyagrantfromtheAgencyforHealthcareResearchandQualitytodevelopa“safe

harbor”programthatchangesmedicalliabilityrulestoencouragephysicianstouse

evidence‐basedpracticeguidelines:

• Toexplorethepotentialvalueofusingevidence‐basedguidelinesasthelegal

standardofcare,policymakersshouldsupportthecompletionofthegrant

activity.

• Asthegrantmovesforward,abroadlyrepresentativesetofindividualsshould

beincludedintheplanningprocess.



TheTaskForceconsideredproposalstoreplacetheexistingmedicalliabilitysystemwitha

newsystemforcompensatingpatientsharmedbymedicaltreatment,eveniftheircarewas

notnegligent.Itisassumedthatsuchaprogramwouldcompensatemoreindividualsthan

thecurrentsystemandwouldinvolveanadministrativeratherthanacourt‐basedsystem

foradjudicatingclaims.TheTaskForcereachedthisconclusion:

• ItwouldbeworthwhilefortheLegislatureortheOregonHealthAuthorityto

sponsorastudytodeterminewhetherornotanadministrativesystemcouldbe

designedthatwouldachievethereformobjectivestheTaskForcehas

enunciatedandifso,whetherimplementationisfinancially,legally,

and

politicallyfeasible.Thestudyshouldbeoverseenbyanunbiasedentitythathas

nottakenapositionfororagainstthehealthcourtsconcept.Itshouldbe

conductedbyawell‐qualifiedteamwithknowledgeoftheexistingmedical

liabilitysystem,knowledgeofadministrativecompensationsystemsinthe

United

Statesandelsewhere,skillineconomicandsocialresearchandmodeling,

legalandactuarialexpertise,andfundingsufficienttodoathoroughjob.



TheTaskForceappreciatestheopportunitytostudytheseissuesandencouragestheboard

tocontinuethiswork.



I. ChargetotheTaskForce



TheMedicalLiabilityTaskForcewasappointedbytheOregonHealthPolicyBoardinMarch

2010todevelopmedicalliabilityreformproposalsforconsiderationbythePolicyBoardand

theLegislature.



TheBoardinstructedtheTaskForcetobeguidedbytheTripleAim,seekingtoimprove

populationhealthby“improvingaccesstocare;”improveaccesstoandexperienceofcare

by“assuringhealthcareprovidersdonotceasetoprovidespecificservicesinresponseto

liabilityconcerns;”andreducepercapitacostsby“reducingthecostsassociatedwith

defensivemedicine.”



Thecharterread:



“TheMedicalLiabilityTaskForcewillinvestigatethecurrentmedicalliabilitysystem

andsuggestopportunitiesforreforminOregonincluding,butnotlimitedto,capson

non‐economicdamageawards,disclosure‐and‐offerprograms,shiftingthe

adjudicationofmedicalmalpracticeclaimstoadministrativepanelsorspecialized

judicialcourts,andthecreationof“safeharbors”wherephysiciansareinsulated

fromliabilityiftheyadheretoevidence‐basedpracticesorpracticeaccordingto

findingsfromcrediblecomparative‐effectivenessresearch(CER).



***



“Recommendationsshouldprioritizepatientsafetyandthereductionofmedical

errors,encouragebettercommunicationbetweenphysiciansandpatients,reduce

theoccurrenceoffrivolouslawsuits,andreduceliabilitypremiums,whilealso

ensuringthatpatientsarecompensatedinanequitableandtimelywayformedical

injuries.”



II. FrameworkforDeliberations



TheTaskForcechosetofocusitsattentiononfindingwaystofurtherthreegoalsforsystem

improvement.Thegoalswereidentified

withthePolicyBoard’spatient‐centricfocusin

mind.Successfulreformwillmean



1. Themedicalliabilitysystembecomesamoreeffectivetoolforimproving

patientsafety;

2. Themedicalliabilitysystemmoreeffectivelycompensatesindividualswho

areinjuredasaresultofmedicalerrors;and

3. Thecollateralcostsassociatedwiththemedicalliabilitysystem(including

costsassociatedwithinsuranceadministration,litigation,anddefensive

medicine)arereduced.



TheTaskForceidentifiedfivequestionsthatshouldbeaskedaboutanyproposaltochange

themedicalliabilitysystem.Theyare:



1. Whatisthelikelyeffectoftheproposalonpatientsafety?

2. Whatisthelikelyeffectoftheproposalonaccesstocompensationfor

patientinjury?

3. Whatisthelikelyeffectoftheproposalonhealthcarecosts?

4. Istheproposalfeasible?

5. Cantheproposalbeimplementedwithoutstatutoryorconstitutional

changes?Ifnot,whatchangesarenecessary?



III.Background



TheTaskForcewouldhavepreferredtobeginitsworkwithacompleteunderstandingof

theproblemofmedicalerrorsinOregon,theperformanceandcostsofthemedicalliability

systeminOregon,andthecollateralcostsofthemedicalliabilitysystem,includingcostsof

administration,litigation,anddefensivemedicine.



Unfortunately,theTaskForcefoundthatinformationisnotavailabletosupportathorough

understandingofthesystemswehavetoday—whichmaybeonereasonthereisno

consensusaroundproposalsforchange.Oregondoesnottrackmedicalerrorsina

comprehensiveway.TheOregonMedicalBoardtrackspaymentsinclaimsagainst

physicians,butthestatedoesnottrackpaymentsinclaimsagainstinstitutionsorother

licensedprofessionals.Oregonknowssomethingaboutthecosttophysiciansoftheliability

systembecausemedicalliabilityinsurerslicensedinOregonmustfilepremiumratesand

totalpremiumwritten;butincreasingnumbersofphysiciansareemployedbyself‐insured

healthcareinstitutions.Thisconfoundseffortstotrendcostorgenerateaggregatecost

figures.



TheTaskForceproceededwithitsworkbasedonthepersonalknowledgeofparticipants,

nationalestimatesoferrorsandliabilitysystemcosts,andpreliminaryinformationsupplied

bystafffrompublicandinsurer

sources.Weofferthefollowingparagraphstohelpinform

ourreaders.



A.PatientSafety



Theseminalauthorityontheissueofmedicalerrorsremainsthe1999Instituteof

Medicine'slandmarkreportentitled"ToErrIsHuman".RelyingontheHarvardMedical

PracticeStudy’sreviewofarandomsampleof1984hospitalrecordsinNewYorkState,

1



theIOMestimatedthatasmanyas98,000individualsdieeveryyearfrompreventable

medicalerrorsinAmericanhospitals.

2

TheHarvardMedicalPracticeStudycountincluded

patientswhodiedinhospitalsduetodiagnosticandothererrorsthatoccurredonan

outpatientbasis.



TheHarvardresearchteamestimatedthenationaleconomicburdenof1984medicalerrors

at$50billionin1989dollars.Abouthalfthecostwasforadditional

healthservices;about

halfforlostearningsandhouseholdproductivity.

Asimilarstudywasdoneusing1992

hospitalrecordsfromColoradoandUtah.Anarticledescribingthestudyestimatedthe

nationalburdenof1992medicalerrorsin1996dollarsat$37.6billionforalladverseevents

and$17billionforpreventableones.Again,abouthalfofthecostswereforadditional

healthservicesandhalfforlostearningsandproductivity.





NostudycomparabletotheNewYorkorColorado/Utahstudieshasbeendonetomeasure

thefrequencyorcostofmedicalerrorsinOregon.TheOregonPatientSafetyCommission

(OPSC)operatesmedicalerrorreportingprograms.Whiletheprogramsprovideimportant

informationtosupportfacilityimprovementprograms,theycannotyetgeneratea

comprehensivepictureofthemedicalerrorsthatoccur.Hospitals,nursinghomes,

ambulatorysurgerycenters,andpharmaciesmayparticipateintheOPSCprograms,but

physicianpracticesmaynot.In2009,thePatientSafetyCommissionreceivedreportsof32

medicalerrorsresultinginpatientdeath.

RelyingondatafromPennsylvania,wherea

mandatoryhospitalerrorreportingsystemhasbeeninplacesince2004,Oregon’sPublic

HealthOfficerestimatedthat1600seriousadverseeventsresultinginpatientharm

occurredin2008inOregonhospitalsalone.

Manyoftheseinjuriescanandshouldbe

prevented.



Brennan,T.A.,Leape,L.L.,Laird,N.M.,Hebert,L.,Localio,A.R.,Lawthers,A.G.,Newhouse,J.P.,Weiler,P.C.,&

Hiatt,H.H.(1991,February7).Incidenceofadverseeventsandnegligenceinhospitalizedpatients:results

oftheHarvardMedicalPracticeStudyI.NewEnglandJournalofMedicine,324(6):370‐6.

Kohn,L.T.,Corrigan,J.M.,&Donaldson,M.S.(1999).ToErrIsHuman:BuildingaSaferHealthSystem.

InstituteofMedicine.Washington,DC:NationalAcademyPress.

Johnson,W.G.,Brennan,T.A.,Newhouse,J.P.,Leape,L.L.,Lawthers,A.G.,Hiatt,H.H.,&Weiler,P.C.(1992,

May13).TheEconomicConsequencesofMedicalInjuries.TheJournaloftheAmericanMedical

Association.267(18):2487–2492.

Thomas,E.J.,Studdert,D.M.,Newhouse,J.P.,Zbar,B.I.W.,Howard,K.M.,Williams,E.J.,&Brennan,T.A.

(1999,Fall).CostsofMedicalInjuriesinUtahandColorado.Inquiry.

In2009,Oregonhospitalsreported127seriousadverseevents,32ofwhichresultedindeath.Oregon

PatientSafetyCommission.(2010,August).HospitalReport.Available:

http://oregon.gov/OPSC/docs/Reports/Hospital‐Report‐081910.pdf

[2010,October14]

OregonDepartmentofHumanServices,PublicHealthDivision.(2009,August).PublicHealthOfficer

CertificationReport2008–OregonPatientSafetyCommissionAdverseEventReportingPrograms.

Available:http://oregon.gov/PHOCertificationReport2008_Final_1.pdf

[2010,October14]

B.AccesstoCompensation



Ourcurrenttortsystem’sprincipalpurposeistoprovidecompensationtovictimsof

negligence.Asitappliestomedicalclaims,itisafault‐basedsystem,meaningthat

compensationmaybeawardedonlyifthemedicalproviderisshowntohaverendered

unreasonablecare.Becausethereisnocomprehensivedataonthenumbersofnegligent

medicalerrorsoccurringinOregoneachyear,itisimpossibletocalculatethedegreeto

whichthetortsystemaccomplishesitsgoal.



Thereisnoquestion,however,thatmanypeoplewhoareharmedbymedicalnegligencedo

notreceivecompensationthroughthetortsystem.Severalstudiesusingdatafromother

stateshavebeenconducted.Foreach,physiciansexaminedhospitalrecordstoidentify

adverseeventscausedbymedicalnegligence.Researchersthenmaptheeventsagainst

recordsofmalpracticeclaims.Thestudieshavefoundthat97.5‐98%ofpatientsinjuredby

medicalnegligencedidnotfileclaims.



Thissuggeststhatthesystemasitnowfunctionsisaless‐than‐perfectvehiclefor

compensatingvictimsofmedicalnegligenceandprobablyanevenlesssatisfactoryvehicle

forcompensationvictimsofpreventablemedicalerrors—thatis,errorsthatcouldhave

beenpreventedhadbestpracticesbeenfollowed.Thereasonswhysofeware

compensated,however,isanissuerequiringfurtherstudy.



C.CollateralCosts



1.Totalsystemcosts



Thecostsofthemedicalliabilitysystem(asopposedtoeconomicburdenofthetreatment‐

relatedinjuriesthemselves)includebothcompensationpaidforinjuryandthesystem’s

collateralcosts—primarilythecostsof

insuranceadministrationandlitigationandcosts

associatedwithdiagnosticandtreatmentactivitiesundertakenprimarilytoavoid

malpracticeliabilityorclaims(thatis,“defensivemedicine”).



Atleastthreeestimatesofthenationalcostofthemedicalliabilitysystemhavebeen

publishedrecently.Theestimatesof“directcost”rangefrom.43%to2%ofnationalhealth

carespending.PublicCitizen,relyingonestimatesofmalpracticepremiumsalone,

estimateddirectcostsat0.46%ofhealthcarespending.

MichelleMelloandcolleaguesat

theHarvardSchoolofPublicHealthestimatedtotaldirectcosts(thatis,indemnity

Localio,A.R.,Lawthers,A.G.,Brennan,T.A.,Laird,N.M.,Hebert,L.E.,Peterson,L.M.,Newhouse,J.P.,Weiler,

P.C.,&Hiatt,H.H.(1991,July25).RelationBetweenMalpracticeClaimsandAdverseEventsDueto

Negligence.NewEnglandJournalofMedicine.325(4):245‐251.Studdert,D.M.,Thomas,E.J.,Burstin,H.R.,

Zbar,B.I.W.,Orav,E.J.,&

Brennan,T.A.(2000,March).NegligentCareandMalpracticeClaimingBehavior

inUtahandColorado.MedicalCare.38(3):250‐60.

PublicCitizen.(2010,March3).MedicalMalpracticePaymentsFallAgainin2009.Available:

www.citizen.org/documents/NPDBFinal.pdf

[2010,October14]

paymentsplusadministrativecosts)at$9.85billionin2008—or0.43%oftotalhealthcare

spending.Theirestimatewasbasedondataonpayments,studiesofdefensecosts,and

studiesofinsuranceoverheadcosts—allcitedinapaperpublishedinHealthAffairs.

9

The

CongressionalBudgetOfficeofferedamuchlargerestimateofdirectcostinaletter

concerningthepotentialsavingsfromspecifictortreformproposals.ThemethodCBOused

togenerateitsestimateof$35billion—orabout2%ofhealthcarespending—isnot

explainedindetail.





Melloandcolleaguessoughttoestimatetheindirectaswellasthedirectcostsofthe

medicalliabilitysystem.Todothat,theyaddedestimatesoflostphysicianproductivityand

defensivemedicinetotheirestimatesfordirectcosts.Theypeggedtotalcostat$55.6

billionayear—withalmost80%ofitresultingfromdefensivemedicine.Iftheirestimateis

correct,thedirectandindirectcostsoftheliabilitysystemare2.4%oftotalhealthcare

spending.



Theproblemwithalloftheseestimatesisthattheyincludebothcompensationand

collateralcost;sowhiletheyareagoodmeasureofthe

burdenofthesystemonhealthcare

practitioners,theyarenotparticularlyusefulinidentifyingthecollateralcoststhattheTask

Forceseekstoreduce.Therefore,weturntostudiesthatseektoparsethesecosts.



2.Costofindemnitypayments



Melloetalestimatedthetotalnationalcostof

indemnitypayments—thatispaymentsto

compensatefortheeconomicandnoneconomicconsequencesofpatientinjuries‐‐at$5.7

billionayearor0.25%ofnationalhealthcarespending.Thecalculationstartedwiththe

totalindemnitypaymentsreportedtotheNationalPractitionerDataBankandamultiplier

developedfromtheliteratureandinsurerrecordstoaccountforindemnitypaymentson

behalfofinstitutions(whicharenotreportedtothedatabank).



UsingMello’smethodologyandNationalPractitionerDataBankfiguresforOregon,the

OfficeforOregonHealthPolicy&Researchestimatesthatindemnitypaymentspaidin

claimsagainstprofessionalsandfacilitiesinOregon

totaledabout$46.4millionin2008 ‐‐

thatis,0.24%ofestimatedOregonhealthcarespending.





TotalindemnitypaymentsmadeforincidentsinvolvingclaimsagainstOregonphysicians

appearstohavetrendedupwardoverthelastdecadeaccordingtodatareportedtothe

OregonMedicalBoard.Whetherthistrulyreflectsagrowingcostburden,however,would

requireadjustingthesepaymentsforinflationandforgrowthinpopulationorinvolumeof

Mello,M.M.,Chandra,A.,Gawande,A.A.,&Studdert,D.M.(2010,September.)NationalCostsoftheMedical

LiabilitySystem.HealthAffairs.29(9):1569‐77.

CongressionalBudgetOffice.(2009,October9).LettertoHonorableOrrinG.Hatch.Available:

www.cbo.gov/ftpdocs/106xx/doc10641/10‐09‐Tort_Reform.pdf

[2010,October14]

TheOfficeforOregonHealthPolicyandResearchhasestimatedtotalhealthcarespendingfor2008at$19.3

billion.

healthservicesprovided—anexercisetheTaskForcedidnotundertake.Formoredetailon

trendsinclaimfrequencyandindemnitypayments,seeAppendix1.



3.Costsofinsuranceadministrationandlitigation



Melloetalestimatedthetotalnationalcostofinsuranceadministrationanddefendant

legalexpensesat$4.13billionin2008—withanadditional$2.0billioninlegalcostsborne

byinjuredpatientsoutoftheirrecoveries.





Iftherelationshipbetweenindemnitycostandadministrationandlitigationcostsinthe

MelloestimatesholdstrueforOregon,malpracticeinsuranceadministrationanddefense

litigationcostswouldhaveconsumedabout$33.6millioninOregonin2008.



4.Costsofdefensivemedicine



Increasedhealthcarecostsassociatedwithdefensivemedicineare

notoriouslydifficultto

measure.Estimatesofshareofhealthcarespendingattributabletodefensivemedicine

rangefromabout0.3%tomorethan7%.



Defensivemedicineresultsinperformanceoftestsandproceduresprimarilytoavoid

malpracticeliability.Measuringitrequiresassessingwhyphysiciansmakethediagnostic

andtreatmentdecisionstheymake.Itwouldbedifficultenoughtodetermineinany

particularcasewhetheradecisiontoorderaparticulardiagnosticimagingstudywasmade

primarilybecausethephysicianbelievedittobenecessaryforthepatient’scareor

primarilytoensurethathisdiagnosiswouldnotbequestionedinamalpracticesuit.The

analysisisyetmoredifficultbecausegoodpatientcareandfearofmalpracticesuitsarenot

theonlyfactorsaffectingphysiciandecision‐making.Forexample,fee‐for‐servicepayment

incentivescanreinforcemedicalmalpracticeincentivestoorderunnecessaryservices.

Becauseofthedifficultyofmeasuringtheextentof

defensivemedicine,membersofthe

TaskForceagreednottoattempttoagreeonitsprevalence.Nevertheless,because

defensivemedicineisalargecomponentofmostestimatesoftotalmedicalliabilitycost,we

addressitbrieflyhere.



Ina2006paperpublishedbytheRobertWoodJohnsonFoundation,MichelleMello,wrote:



“Therearenoreliableestimatesofthenationalcostsofdefensivemedicine.Many

analystshaveattemptedtoestimatethesecosts;allhavefailedtodosoreliably.All

oftheavailablemeasurementmethodologieshaveseriousshortcomings(10,18).

Forexample,somenationalestimatesarebasedontheincrementalcost

increases

associatedwithjusttwoorthreemedicalproceduresordiagnoses.Itissimplynot

possibletoextrapolatesowidelytootherprocedures,becausesomearemore

amenabletodefensivemedicalpracticethanothers.TheOfficeofTechnology

Seefootnote9.

Assessmentconductedacomprehensivereviewoftheevidenceaboutdefensive

medicinecostsin1994andconcludedthatnoneofavailableestimateswerereliable

(32).Muchadditionalresearchhasbeenconductedsincethen,buttheconclusion

remainsthesame.”



Nevertheless,anumberofattemptshavebeenmadetoquantifythedefensivemedicine

phenomenon.Wementionseveralbelow.



OneofthelargerestimatesisdescribedbytheStuartL.Weinstein,pastpresidentofthe

AmericanSocietyofOrthopedists,inapostingonthesociety’swebsite.Hewrites:

“Thestudyquoted

mostoftenisbyDanielP.KesslerandMarkB.McClellan.To

reallyunderstandactualcosts,KesslerandMcClellananalyzedtheeffectsof

malpracticeliabilityreformsusingdataonMedicarebeneficiarieswhoweretreated

forseriousheartdisease.Theyfoundthatliabilityreformscouldreducedefensive

medicinepractices,leadingtoa5percentto9percentreductioninmedical

expenditureswithoutanyeffectonmortalityormedicalcomplications.

“IftheKesslerandMcClellanestimateswereappliedtototalU.S.healthcare

spendingin2005,thedefensivemedicinecostswouldtotalbetween$100billion

and$178billionperyear.”



MostexpertswouldconcedethatWeinstein’sisahighestimate,builtonanassumption

thatfindingsofKesslerandMcClellanwithrespecttoasmallclassofcasescanbe

extrapolatedtothesystemasawhole.



MoreconservativeestimateshavebeenauthoredbytheCongressionalBudgetOfficeandJ.

WilliamThomasandcolleaguesattheCutlerInstituteforHealthandSocialPolicy.The

CongressionalBudgetOffice,basedonareviewofpublishedresearch,estimatedthat

enactmentofapackageoftraditionaltortreforms—includingcapsondamages—would

reducetotalhealthspendingby0.3%.

Thomasetal,basedonanextensiveanalysisof

healthinsuranceclaimsdata,predictedthatwhilereductionsinmedicalliabilitypremiums

wouldresultinasignificantreductionincostsfor2%ofconditions,“acrossallthirty‐five

specialties[studied],savingsassociatedwitha10%percentreductioninmedical

malpracticepremiums

wouldbejust0.132percent.”





Mello,M.M.(2006,January).UnderstandingMalpracticeInsurance:APrimer.RobertWoodJohnson

Foundation.Available:www.rwjf.org/pr/synthesis/reports_and_briefs/pdf/no10_primer.pdf

[2010,October

14]

Weinstein,S.L.,TheCostofDefensiveMedicine.Available:

http://www.aaos.org/news/aaosnow/nov08/managing7.asp

[October21,2010]

Seefootnote10.

Thomas,J.W.,Ziller,E.C.,andThayer,D.A.(2010,September).LowCostsofDefensiveMedicine,Small

SavingsFromTortReform.HealthAffairs29(9):1578‐1584.

Aspartoftheir2010studyofthecostsofthemedicalliabilitysystem,Melloandcolleagues

alsoattemptedtoestimatethecostofdefensivemedicine.RelyingontheKesslerstudy

andothers,theypeggedannualdefensivemedicinecostsforhospitalsandphysiciansat

$45.49billion—orabout1.97%oftotal

healthcarecosts.Theywarned,however,that

“Althoughourfigurewasbasedonmethodologicallystrongstudies,becausethehospital

spendingestimateswerederivedfromanarrowrangeofdiagnoses,thequalityofevidence

supportingoursystem‐wideestimateisbestcharacterizedaslow.”





D.MedicalLiabilityPremiumsinOregon



Medicalliabilitypremiumlevelsaresetbyinsurers.Ratesdiffergreatlybyprovider

specialty.WeexaminedpremiumtrendandOregonpremiumscomparedwithpremiumsin

neighboringstates.



TheMedicalLiabilityMonitorreportspremiumratesformajorcarriersbystateforthree

specialties—internalmedicine,obstetricsandgynecology,andgeneralsurgery.Comparing

averageratesforthesespecialtiesinOregon,Washington,andCaliforniashowspremiums

havebeenlowerinOregonthaninneighboringstatesforeveryyearofthelasttwodecades

withtheexceptionofthreeyears,whenaverageOregonratesforobstetricsandgynecology

exceededCaliforniarates,andoneyear,whenaverageOregonratesforgeneralsurgery

werethesameasCalifornia’s.Toillustrate,seethechartbelow.Foradditionalchartsand

anexplanationoftheMonitor’sreporting,seeAppendix2.



Internal Medicine

Average Premium Rates (CA, OR & WA)

2000

4000

6000

8000

10000

12000

14000

16000

1992

1994

1996

1998

2000

2002

2004

006

008

2010

Year

Average Premium Rate ($)



AlthoughOregonmedicalliabilitypremiumratesarelowrelativetoratesinneighboring

states,premiumratestendtobevolatile,reflectingwhatisknownastheinsurancecycle.

Thisvolatilitymakesitdifficultforphysicianstopredicttheircosts.During“soft”phasesof

Seefootnote9.

thecycle,insurerskeeppremiumslowinanefforttobuildmarketshare.During“hard”

phasesofthecycle,premiumsriseasinsurersprotecttheirprofitability,oftenduring

periodswhereinvestmentreturnsarelow.

Oregoniscurrentlyinthesoftphaseofthe

cycle.Somenationalcommentatorsarepredictingincreasesinclaimsfrequencyandcosts,

however,whichcouldpresageareturntothehardphaseofthecycle.



AccordingtotheDepartmentofConsumerandBusinessServices,Oregon’sinsurance

regulator,Oregon’stwodominantmedical

liabilitycarriers,representing57%ofthe

professionalliabilitymarketinOregon,havedroppedtheirpremiumsanaverageof20%

overthepastfiveyears.

ThechartbelowistakenfromaDCBSpressrelease:



MedicalLiabilityPremiumRateTrendsinOregon

Year NPIC/Doctors Company* CNA

2006‐8.3% +1.9%

2007‐10.2%‐3.2%

2008‐8.9%‐7.6%

2009 0%‐2.5%

2010‐5.1% 0%



Duringthelasthardphaseofthecycle,OregonphysiciansdeliveringbabiesinruralOregon

reportedsoaringpremiums.Thelegislaturerespondedbycreatingamalpracticepremium

subsidyprogramforruralphysiciansin2003.Theprogramisscheduledtoexpirein2011.

Formoredetailabouttheprogram,seeAppendix3.



IV. ReformConceptsSelectedforConsideration



TheTaskForceprioritizedthreereformconceptsforconsideration.Theyweredisclosure

andofferprograms;evidence‐basedguidelinesafeharbors;andhealthcourts.These

conceptsarediscussedindetailbelow.



TheTaskForcechosenottolookforwaystoreduceindemnitypayments(that

is,payments

toinjuredpatients)foratleastthreereasons:Firstandmostimportantly,non‐economic

damagecaps—althoughfavoredbysomegroupsnationally‐‐cannotbeimposedinOregon

withoutaconstitutionalchangethatthestate’svotershaverejectedtwice.Therefore,all

membersoftheTaskForceagreedthatpursuingacaps

strategywouldnotbefruitful.

Second,whilesomeTaskForcemembersaremorecomfortablethanotherswithwhogets

compensatedandhowmuchintoday’sliabilityenvironment,mostmembersofthegroup

Mello,M.M.(2006,January).UnderstandingMalpracticeInsurance:APrimer.RobertWoodJohnson

Foundation.Available:www.rwjf.org/pr/synthesis/reports_and_briefs/pdf/no10_primer.pdf

[2010,October

14]

OregonDepartmentofConsumer&BusinessServices(2010,April15).Pressrelease:Oregonmedical

malpracticeratescontinuetodecrease.Available:

http://egov.oregon.gov/DCBS/docs/news_releases/2010/nr_ins_04_15_10.pdf

[2010,October14]

donotbelievethetotalamountofmoneyspenttocompensatevictimsofmedical

negligenceisexcessive.Mostbelievethatmorepeopleshouldbecompensated.Third,

somephysicianmembersoftheTaskForcenotedthatwhilethevolatilityofmedicalliability

premiumsistroublesomeforhealthcareprofessionals,mosthave

beenabletomanagethe

currentpremiumlevels.AccordingtotheDepartmentofConsumerandBusinessServices,

mostphysiciansandsurgeonsinOregonhaveseendeclinesornochangeinmedical

professionalliabilityinsuranceratesforthelastfouryears.





TheTaskForcealsochosenottoaddresstheimminentexpirationofOr egon’spremium

subsidyprogramforruralphysicians.Theissueisbeingstudiedbyalegislativecommittee.

RatherthanattemptingtoweighinonasubjecttheTaskForcehasnotthoroughlystudied,

theTaskForcechosetodefertothatcommittee.



ThefollowingsectionsofthereportsummarizetheTaskForce’srecommendations,the

thinkingbehindthem,anddifferencesofopinionamongmembersoftheTaskForce.

Recommendationsareshowninboldfacetype.



V. RecommendationstoSupportandEncourage“DisclosureandOffer”Programs



A.DiscussionofDisclosureand“DisclosureandOfferPrograms”



Healthcareprovidersaretrainedtotellpatientsaboutunanticipatedoutcomesthatoccur

inthecourseoftheirmedicalcare.Thatmeanstheyshouldexplaineventsthatcausetheir

patientsharm—includingthetreatingprofessionals’understandingaboutthecauseofthe

event:Wasitoccasionedbyprogressionoftheunderlyingdiseaseprocessorbythe

treatmentitself?Ifbymedicaltreatment,wasitananticipatedriskoftreatment—thatis,

somethingthatisexpectedtohappeninsomebutnotallcases?Orwasitaresultofa

defectinthecarethatwasprovided?Couldithavebeen

prevented?



Nevertheless,historically,medicalculturecoupledwithproviderfearofmedicalliability

lawsuitshasmeantthatmostprovidershavebeenreluctanttodiscusstheseissuesopenly

withpatients.Thiscultureofnondisclosurehasbeenreinforcedbyliabilityinsurers,some

ofwhosepersonnelinstructproviderstheyinsurenottodiscussadverseeventswith

patientsorothers.



Thereisincreasinginterest,however,infosteringdisclosurebecauseitisconsistentwitha

transparent,patient‐centeredapproachtohealthcare.Disclosureisusefulwhetherornotit

isrequired.Itfacilitatespatientparticipationindecision‐makingabouttheircareand

enablesinformedconsent.Inaddition,organizationswithaculturethatfostersdiscussion

ofmishapsarebetterpositionedtoexplorethecausesofpatientinjuriesandprevent

avoidablerecurrences.

Ibid.



Disclosuremaybeagoodbusinesspracticeaswell:Researchsuggeststhatdisclosureof

errorstopatientsmayreduceratherthanincreasetheincidenceoflawsuits;and,when

disclosureiscoupledwithearlyoffersofcompensation,itmayreducelitigationcostsand

thesizeofindemnitypayments.AnarticlepublishedintheSeptemberissueofAnnalsof

InternalMedicineexaminedtheexperienceoftheUniversityofMichiganHealthSystems,

findingthatthenumberofclaimsresultinginlawsuits,thecostofcompensation,andtotal

programcostsdeclinedsignificantlyafteradoptionofadisclosureandofferprogram.





Finally,disclosureofsomeadverseeventsisrequiredbyagenciesliketheJointCommission,

whichaccreditshospitals,andtheOregonPatientSafetyCommission,whichoperatesa

voluntaryerrorreportingprogramforhealthcarefacilities.





TheTaskForceconcludesthatprovidersandfacilitiesshouldbeencouragedtodisclose

adversetreatmenteventsanddiscussthemopenlywithpatients.Theyshouldfurtherbe

encouragedtoofferfaircompensationassoonaspossibletopatientswhohaveclearly

beeninjuredduetomedicalnegligence.Whenpatientsareasked

togiveuptheirrightto

sueinexchangeforanofferofcompensation,providersshouldencouragepatientsto

consultalawyertoassisttheminnegotiatingafairagreement.This“disclosureandoffer”

approachhasbeenadoptedbysomeself‐insuredhospitalsandintegratedhealthsystemsin

Oregon.Providersand

facilitiesthatdonotself‐insure,however,willneedthecooperation

oftheirinsurerstoadoptthisapproach.



Statepolicymakersshouldremoveobstaclestodisclosureandconsiderrequiringitinsome

circumstances.Thechoicetomakeearlyoffersofcompensationwillnecessarilyremain

withindividualself‐insuredentitiesandinsurers.



Kachalia,A.,Kaufman,S.R.,Boothman,R.,Anderson,S.,Welch,K.,Saint,S.,&Rogers,M.A.M.(2010,August

17).LiabilityClaimsandCostsBeforeandAfterImplementationofaMedicalErrorDisclosureProgram.

AnnalsofInternalMedicine.153(4):213‐221.Kraman,S.S.,&Hamm,G.(1999,December21).Risk

Management:ExtremeHonesty

MayBetheBestPolicy.AnnalsofInternalMedicine.131(12):963‐967.

JointCommissionaccreditingstandardsprovidethathospitalsmustinformpatientsof“unanticipated

outcomesofcare,treatment,andservicesthatrelatetosentineleventsconsideredreviewablebythe

Commission.”Licensedpractitionersresponsibleformanagingapatient’scare(ortheirdesignee)must

inform“thepatientaboutunanticipatedoutcomesofcare,treatment,and

servicesrelatedtosentinel

eventswhenthepatientisnotalreadyawareoftheoccurrenceorwhenfurtherdiscussionisneeded.”

JointCommissionStandard:RI.01.02.01‐21.Oregonstatuteprovidesthat“Afteraseriousadverseevent

occurs,aparticipant[inthePatientSafetyCommission’sreportingprogram]mustprovidewritten

notificationina

timelymannertoeachpatientservedbytheparticipantwhoisaffectedbytheevent.

Noticeprovidedunderthissubsectionmaynotbeconstruedasanadmissionofliabilityinacivilaction.”

ORS442.837(4).

B.SpecificRecommendationstoRemoveBarrierstoDisclosure



TheTaskForceconsideredthreepolicyconceptsforincreasingdisclosuretopatientsand

therebyfacilitatingearlyresolutionofmalpracticeclaims.Eachwouldbuildonthe

“apology”lawenactedin2003.Thatlawprovidesthatexpressionsofregretorapology

madebyphysiciansorothersontheirbehalfcannotbeusedtoestablishliabilityina

negligencelawsuitagainstaphysician.



Theapologystatute,whileuseful,hasprovedinsufficienttoeliminateliabilitysystem

barrierstodisclosure.Somephysiciansreportthatmalpracticeinsurerscontinuetoinstruct

physiciansnottodiscusseventsthatcouldleadtolawsuits.Thesephysiciansfearthatif

theydiscloseerrorstheywillbeguiltyof“noncooperation”andtheirinsurersmaybe

entitledtorefusetodefendthemincourt.



Toremoveinsuranceconcerns asabarriertofulldisclosure,thelegislatureshouldenacta

statuteexplicitlyprovidingthatahealthcarefacilityorprovider’sdutytocooperatewith

aninsurerdoesnotprecludedisclosureofanadverseeventor

thereasonsunderlyingit

toapatientorthepatient’sfamilyandthatsuchdisclosuremaynotbethegroundsfor

refusaltodefendorforcancellationornonrenewalofcoverage.(Forlanguagethatcould

beused,seeAppendix4.)



Thelegislatureshouldalsoconsideramendingthe“apology”lawto

expresslyprotect

facilitiesaswellasphysiciansandtomoreclearlydescribewhatstatementsmadetoa

patientareinadmissibleexpressionsof“regretorapology”.





TheTaskForcebelievesthelegislatureshouldalsoconsiderrequiringprofessionalsand

facilitiestodisclosetopatientsadverseeventsoccurringasaconsequenceoftheir

treatmentandtoprovideexplanationsforthem.

Ifamandatorydisclosurelawwere

Thelawreads:

ORS677.082(1)ForthepurposesofanycivilactionagainstapersonlicensedbytheOregonMedical

Board,anyexpressionofregretorapologymadebyoronbehalfoftheperson,includinganexpressionof

regretorapologythatismadeinwriting,orallyor

byconduct,doesnotconstituteanadmissionofliability

foranypurpose.

(2)ApersonwhoislicensedbytheOregonMedicalBoard,oranyotherpersonwhomakesan

expressionofregretorapologyonbehalfofapersonwhoislicensedbytheOregonMedicalBoard,may

not

beexaminedbydepositionorotherwiseinanyciviloradministrativeproceeding,includingany

arbitrationormediationproceeding,withrespecttoanexpressionofregretorapologymadebyoron

behalfoftheperson,includingexpressionsofregretorapologythataremadeinwriting,orallyorby

conduct.

ThegeneralconceptofofferingbroadprotectionappearsinMastroianni,A.C.,Mello,M.M,Sommer,S.,

Hardy,M.,&Gallagher,T.H.(2010,September).TheFlawsinState‘Apology’and‘Disclosure’LawsDilute

TheirIntendedImpactonMalpracticeSuits.HealthAffairs.29(9):1611‐1619.

Onememberexpressedtheview,however,thatmandatorydisclosureshouldnotbeconsideredbecause

thevoluntaryreportinganddisclosurelawisworkingwellnow.

enacted,Oregonwouldjoinsevenotherstates—amongthemCalifornia,Florida,Nevada,

NewJersey,Pennsylvania,andVermont.





Atpresent,OregonfacilitiesthatchoosetoparticipateintheOregonPatientSafety

Commission’serrorreportingprogramarerequiredtodisclosereportableadverseeventsto

thepatient.ORS442.837(4).Neitherhealthcarefacilitiesdecliningtoparticipateinthe

commission’svoluntaryprogramnorindividualhealthcareprofessionalshaveanylegal

obligation

tomakeanydisclosure.Moreover,thecommissionhasnotspelledoutwhatisto

beincludedinthedisclosure.



Finally,theTaskForcerecommendsthattheOregonPatientSafetyCommissionworkwith

healthcarefacilitiestoexperimentwithdisclosureprotocolsthatspecifytheelementsof

therequireddisclosuretopatients.



C.RecommendationsRelatingtoReportingLaws



MembersoftheTaskForcedebatedthevalueofstrengtheningOregon’sreporting

programsasastrategyforencouragingdisclosure.



Oregonlawpermitsbutdoesnotrequirehospitals,ambulatorysurgerycenters,longterm

carefacilities,outpatientrenaldialysisfacilities,free‐standingbirthingcenters,and

pharmaciestoparticipateinthePatientSafetyCommission’sreportingprogram.Physician

practices—regardlessofsize—maynotparticipateintheprogram.





Moststatesnowrequirehealthcarefacilitiestoreportmedicalerrorstoapatientsafety

organizationwhichusesthedatatomeasuretheprevalenceandtypeoferrorsanddevelop

preventionstrategies.Moststatesmakethereportsconfidentialtoencouragecandor.

Somereportingprograms,likeOregon’svoluntaryprogram,requiretheerrortobe

disclosedtothepatientwhileprotectingthereportsthemselvesfromdisclosuretoeither

thepatientorthepublic.



ExpandingparticipationinOregon’sreportingprogrammightresultinincreaseddisclosure

becausethereportingprogramincludesarequirementthatfacilitiesnotifypatientsin

writingwhenaseriousadverseeventoccurs.

Nevertheless,adisclosurerequirementcould

beenactedindependentofthereportingprogram.Therefore,theTaskForcediscussed

whetheranexpandedreportingprogramwouldhaveanyvalueasatooltoencourage

disclosureapartfromtheprogram’snoticerequirement.



Thevaluesandobjectivessupportedbyreporting,disclosure,anddisclosureandoffer

programsaresummarizedinthetablebelow.(An“x”suggeststheprogramwillfurtherthe

valueorobjectivelistedintheleftcolumn.Thetabledoesnotreflectvariationinthe

Forasummaryofdisclosurelaws,seeAppendix5.

ORS 442.837.

degreetowhichaprogramfurthersaparticularobjective.Forexample,whiledisclosureby

itselfmayreducelitigationcost,savingsarepresumablygreaterifanofferandsettlement

occuraswell.)



 Reporting Disclosure Disclosure/offer

Patientrightto

know

 X X

Improvedaccessto

compensation

 X X

Reducedlitigation

cost

 X X

Supportforculture

ofsafety

X X X

Supportforcross‐

institutional

preventionefforts

X 



SomemembersoftheTaskForcebelievethatreportingrequirementshavesupported

developmentofacultureofopennessaboutmedicalerrorsthatfostersdevelopmentof

disclosureprogramsinparticipatinginstitutions.Someofthemareopentothepossibility

thatmandatoryreportinglawswouldincreasethepracticeofdisclosurethattheTaskForce

supports.



Othersmembersarereluctanttoviewreportinglawsastoolsforencouragingdisclosure.

Manyofthemopposeexpansionofreportingrequirementseitherbymakingreporting

mandatoryoropeningtheexistingvoluntaryprogramtoparticipationbyadditional

providers.



TheTaskForcerecommendsthatthelegislatureconsiderexpandingOregon’s

voluntary

reportingprogramtopermitphysicianpracticestoparticipate,recognizingthatthiswould

involvedevelopingapproachestoreportingthatfitthisnewsiteofcareanddealingwith

alargenumberofseparateentities.Itwouldalsobeamajorworkloadincreaseforthe

Commission.Twomembersexpressedreservations,althoughfordifferingreasons.



D.Othermeasurestoencouragedisclosure



Somenationallyrecognizedadvocatesforearlydisclosureandofferprogramshave

suggestedthatstatesofferstate‐fundedfinancialincentivestofacilitiesadoptingthe

programs.Somesuggestcreatingstatereinsuranceorexcessliabilityfundsforproviders

24

Severalmembersofthetaskforcebelievethatchangesinthereportinglawshouldnotbeconsidered.One

believesachangewouldbeunwise,theotherthatitisbeyondthescopeofthetaskforce’scharge.



andfacilitiesthatimplementmodelearlydisclosureandofferprograms.

Suchafund

wouldbedesignedtoprotectfacilitiesfromtheriskthatdisclosingmoreerrorswould

increasetheirmedicalliabilitycosts.TheTaskForcedoesnotrecommendpursuingthis

option,primarilybecausecreatinganewsourceofpaymentforclaimswouldnotseemto

furtherthepriorityobjectivesadoptedasaframeworkfortheTaskForce’swork.In

addition,theevidencetodatesuggeststhatdisclosureandofferprogramsmaymake

businesssenseandexpenditureofpublicdollarsmaynotbeneededtoencouragethem.



VI.Evidence‐BasedGuidelineSafeHarborApproach



Oregonhealthcareleadersandpolicymakershavealonghistoryofcommitmentto

evidence‐basedapproachestohealthcarepolicymaking.Thishasincludeduseof

evidence‐basedpracticeguidelinestoimpr ovethequal ityofcareandreduce costsinthe

healthcaredeliverysy ste m.ThelegislaturehasinstructedtheHealth Re sources

Commission,Oreg on’ smedicaltechnologya ssessmen tentity,todevelopevidence‐based 

guidelinesfor usebyproviders,consumers,andpurchasersinOregonanddirectedthe

healthauthoritytouse theguidelinesinpurchasing forcareinallofthe programsit

manages.Webelievethatincreaseduseof evidence‐basedclinicalpracticeguideline s

andproce ssstandardsbyprovidersmayim provequalityandreduceme dical errors.

OregonhasbeenawardedanAgencyforHealthcareResearchandQualityplanninggrantto

exploreevidence‐basedguidelinesasasafeharbor.Thegrantsupportsdevelopmentofa

proposalforaspecificmedicalliabilityreformthatisdesignedtoimprovepatientsafety.

Overthecourseofthenextyear,theOfficeforOregonHealthPolicyandResearch–with

assistancefromthePatientSafetyCommissionandtheCenterforEvidence‐basedPolicyat

OregonHealth&SciencesUniversity–willleadtheplanningprocess.



Thepurposeoftheplanninggrantisto

craftabroadlysupportedlegislativeproposalthat

willencourageuseofguidelinesbyofferingasafeharborfrommedicalliabilitywhenthey

actinrelianceonstate‐endorsedevidence‐basedguidelines.Theprojectwillexplorea

methodforadoptingguidelinestoaddresstheclinicalsituationsthatresultinsignificant

numbersof

patientinjuriesormedicalliabilityclaims.Theprojectwillalsoexplorelinking

thelegalstandardofcaretocompliancewiththeguidelinesto:

• providephysicianswithgreaterclarityaboutthestandardofcareexpectedofthem

andassurethemthat,iftheyadheretotheguidelines,theywillnotbefoundliable

forharmresultingfromfailuretodosomethingthatisinconsistentwiththe

guidelines,

• givepatientsgreaterprotectionfromsubstandardcare,and

Winter,A.(2010,April1).TheMedicalMalpracticeSystem:AReviewoftheEvidence.Presentationtothe

MedicarePaymentAdvisoryCommission.Available:

http://www.medpac.gov/transcripts/medical%20malpractice%20April%202010_public.pdf

[2010,October

14].ConversationbetweentheMedicalLiabilityTaskForceandAllenKachalia,MD,HarvardSchoolofPublic

Health(2010,September8).

• reducethefrequencyofmedicalliabilityclaims.



Toexplorethepotentialvalueofusingevidence‐basedguidelinesasthelegalstandardof

care,theTaskForcerecommendsthatpolicymakerssupportthecompletionofthegrant

activity.



Asthegrantprojectmovesforward,theTaskForcerecommendsthatabroadly

representativesetofindividualsbeincludedintheplanningprocess.



TheTaskForcehasraisedsomespecificquestionsitexpectsthegrantteamtoaddress:



• Aretherecollectionsofsimilaradverseeventsthatcouldbepreventedifasingle

evidence‐basedguidelinewasconsistentlyfollowed?Havethoseadverseevents

historicallyresultedinsignificantmalpracticecost?

• Wouldtreatingaguidelineasthestandardofcarebelikelytoincreasecompliance

withtheguideline?Reduceadverseevents?Reducelitigationcost?

• Howandbywhomshouldguidelinesbeselectedforspecialstatusinthemedical

liabilitysystem?Basedonwhatcriteria?

• Althoughguidelinescouldnotapplytoallsituationsorsupplantthetraditional

standardofcareinallinstances,couldsuchguidelinesestablishthestandardofcare

inspecificsituations?Ifso,wouldco mpliancewithsuchstandardsinsulatea

physicianfromliabilityormerelybeevidenceofalackofnegligence?Conversely,

woulddeviationfromtheguidelineestablishliabilityormerelybeevidenceof

negligence?

• Wouldguidelinesusedforsafeharborsneedtobeprotocolsinordertoplaytherole

ofsafeharborinthelegalsystem?

• Howcanitbeassuredthattheguidelineswillremainuptodateandnotholdup

desirableinnovation?



VII.AnAdministrativeSystemforCompensatingPatientInjuries



A.Background



InOregonandaroundthecountry,criticsofthemedicalliabilitysystemareproposingto

replacethetortsystemforcompensatingvictimsofmedicalnegligenceandthemedical

liabilityinsurance

systemwithwhatsomecall“healthcourts.”Most“healthcourts”

proposalswouldcreateanadministrativesystemforcompensatinginjuriestopatientsfrom

someorallunanticipatedadverseoutcomesofmedicalcare—notjustmedicalnegligence.

TheTaskForcestudiedtheargumentsofferedbybothproponentsandopponentsofhealth

courtsproposals.



TheTaskForcerejectedtheconceptofcreatinganewcourtsystembutbelievestheremay

bevalueindevelopinganadministrativesystemforcompensatingpatientinjuries.Some

believethatthechangesinournation’shealthcareinsurancesystemoccasionedby

passageofthePatientProtectionandAccountableCareAct

canbeleveragedtoimprove

theliabilitysystemandreducecosts.



Proponentsofhealthcourtsbelieveimplementinganadministrativesystemislikelyto

significantlyimprovethecollectionofdataonunanticipatedadverseoutcomesthereby

supportingsafetyimprovementprograms;fosterdevelopmentofconsensusaroundbest

practicesforavoidingpatientinjury;increase

thenumberofindividualscompensatedby

loweringthebarforrecoverytosomethinglessthannegligence;reducethelegalcosts

incurredbypatientstoestablishtheirclaims;resultinspeedierresolutionofclaims;

producemoreconsistentdecisionsandawards;reduceadministrativecosts,including

defensecosts;andreduceoverutilizationofmedicalproceduresdrivenbythepracticeof

defensivemedicine.





Commentatorscriticalofhealthcourtssharetheproponents’desiretoimprovepatient

safetyprograms,improveaccesstocompensationforvictimsofmedicalerrors,andreduce

collateralcosts,includinginsurance‐relatedcostsandthecostsofdefensivemedicine;but

theydoubtthatanadministrativecompensationsystemwillresultinthehoped‐for

improvements.Theybelievethatestimatesofdefensivemedicinearegreatlyexaggerated.

Theypointoutthatbothdeeplyrootedmedicalcultureandpowerfulfee‐for‐service

paymentincentivesdriveoverutilizationofmedicalprocedures,confoundingeffortsto

measuretheeffectoffearoflawsuitsonutilization.Inaddition,theyareconcernedthat

administrativedecision‐makersmaydisplaypro‐physicianbiasandthatbenefitsavailablein

anadministrativesystemmaybeinadequate.





TaskForcemembers,forthemostpart,areneitherproponentsnoropponentsofreplacing

thetortsystemwithanadministrativecompensationsystem.Theyarepersuaded,

however,thatthemagnitudeofthebenefitsenvisionedbyadvocatesforreplacingthe

existingsystemaregreatandwarrantgivingtheconceptahardlook.

Theyalsobelievethat

theanticipatedbenefitsarenotcertaintomaterialize.Thedesignissuesaremanyand

complexandthepotentialpitfallsareserious.



Thevalueofreplacingtheexistingliabilitysystemisprobablynotsomethingthatcanbe

testedthroughpilotprojectsbecauseitinvolvesestablishinganewandelaboratedecision‐

makinginfrastructureandidentifyingnewsourcesofrevenuetofundtheprogram.

Mello,M.M.,&Kachalia,A.(2010,April).EvaluationofOptionsforMedicalMalpracticeSystemReform.

Medpac.Available:www.medpac.gov/documents/Apr10_MedicalMalpractice_CONTRACTOR.pdf

[2010,

October14].CommonGood.(2006).WindowsofOpportunity.Available:

http://commongood.org/assets/attachments/Windows_of_opportunity_web.pdf

[2010,October14]

PetersJr.,P.G.HealthCourts?BostonUniversityLawReview88:227‐286(2008)Available:

http://www.concurringopinions.com/archives/author/Boston‐University‐Law‐Review



[2010,October27]

Additionally,experiencewithFlorida’sbirthinjurycompensationsystemsuggeststhat,ina

voluntarysystem,thosewhocannotestablishfaultwillelectanadministrativeremedy.

However,thosewhohavesufferedinjuriestheybelievemaystemfromnegligencemay

electthetortremedy,therebyunderminingthefinancialsustainabilityoftheprogram.

Finally,manymembersoftheTaskForcebelievethatthechangesinphysicianculture

necessarytosupportgreatincreasesinerrordisclosureandreductionindefensivemedicine

areunlikelytooccurinavoluntarysystem.Unlessfurtherstudysuggeststhatapilot

programwouldbeworkableandproductive,itappearsthat

replacingthemedicalliability

systemwithanadministrativesystemtocompensatepatientinjurieswillworkonlyifit

appliestoallpatientsstatewide.



B.Recommendation



TheTaskForce,withonememberindissent,concludesthatitwouldbeworthwhilefor

theLegislatureortheOregonHealthAuthoritytosponsora

studytodeterminewhether

ornotanadministrativesystemcouldbedesignedthatwouldachievethereform

objectivestheTaskForcehasenunciatedandifso,whetherimplementationisfinancially,

legally,andpoliticallyfeasible.





Thestudyshouldbeoverseenbyanunbiasedentitythathasnottakenapositionforor

againstthehealthcourtsconcept.Itshouldbeconductedbyawell‐qualifiedteamwith

knowledgeoftheexistingmedicalliabilitysystem,knowledgeofadministrative

compensationsystemsintheUnitedStatesandelsewhere,skillineconomicandsocial

researchandmodeling,legalandactuarialexpertise,andfundingsufficienttodoa

thoroughjob.



C.Scopeoftherecommendedstudy



Theprimarycomponentofthestudyshouldassumethatanadministrativecompensation

systemwouldincludethefollowingbasicfeaturesandbeimplementedstatewide:



• Compensableeventswouldembraceadefinedclassofpatientinjuriesbroader

thantheclassofinjuriescausedbymedicalnegligence.Whileitmaybeunlikely

thatapure“no‐fault”systemiseconomicallyfeasible,a“low‐fault”threshold

couldmakemorepeopleeligibleforbenefits.Compensableeventsmightinclude

averybroadclassofeventsarisingoutofencounterswithmedicalprofessionals

orfacilitiessuchas“treatmentinjuries”(asinNewZealand),“undesired”or

“unexpected”outcomes,”or“avoidable”injuries(asinSweden).



OnememberoftheTaskForcedissentsfromthisrecommendation.Hebelievesthattheeliminationofthe

jurysystemforadjudicatingclaimsofmedicalnegligenceshouldnotbeconsidered— nomatterwhatthe

trade‐offs.

OnememberoftheTaskForcesuggeststhatinsteadofchangingthedefinitionoftheharmorwrongfor

whichtheadministrativesystemprovidesaremedy,themedicalnegligencestandardcouldberetained

whilereducingtheburdenofprooffromthe“preponderanceoftheevidence”tosomethinglesssuchas



• Thesystemwouldcompensatevictimsforbotheconomicdamagesandnon‐

economicdamagescausedbytheinjury.



• Theadministrativesystemwouldbetheexclusiveremedyforeventsthatare

compensableundertheadministrativescheme.Individualsinjuredasaresultof

medicalnegligencecouldnolongerbringasuitfornegligenceincourt.



Thestudyshouldalsoexaminewhetheravoluntaryprogramcanbedesignedthatallows

individualstooptintooroutofanadministrativeadjudicationsystemwhileachievingthe

systemchangeobjectivesoftheproposalandmanagingcosts.



Ahostofsystemdesignissueswouldneedtobeconsideredinboththeprimarystudyand

considerationofvoluntaryprogramoptions.(Foralistofsomeofthedesignissuesthat

shouldbestudied,seeAppendix6.)



Thestudyshouldaddress,firstandforemost,theimpactofeachdesignchoiceonthevalue

oftheadministrativesystemforachievingthegoalsforsystemimprovementandthekey

questionsidentifiedbytheTaskForceattheoutsetofitsworkandwhetherthecostofsuch

asystemissustainable.



D.Timingofthestudy



Foryears,Oregonianshavediscussedthemeritsanddemeritsofthemedicalliabilitysystem

inthecontextofproposedlegislationandproposedballotmeasurestochangethesystem.

Itiscriticallyimportanttogroundthisdiscussioninfact.Aprofessionalstudyofthe

feasibilityofestablishinganadministrativecompensationsystemandtheeffectivenessof

suchasystemascomparedwiththeexistingoneforimprovingpatientsafety,improving

accesstocompensationforinjuredpatients,andreducingcollateralcostsofthemedical

liabilitysystemwillbechallengingbut,ifwelldone,itwillservethestatewell.Thestudy

shouldbefundedassoonaspossible—eitherbytheLegislatureorbyotherpartieswhose

funding

wouldnotbiastheproject.



VIII. Conclusion



“substantialevidence.”Note,however,thattheburdenofproofapplicabletolawsuitsfornegligenceis

thesame“preponderanceoftheevidence”standardthatisgenerallyemployedbyfindersoffactin

Oregon’sadministrativeagencies;the“substantialevidence”standardisusedbyreviewingcourtsto

determinewhetherornottheevidenceis

sufficienttosustainthedecisionofanadministrativefinderof

fact.SeeArmstrongv.Asten‐HillCo.,90OrApp200(1988)(definingsubstantialevidence)andGallantv.

BoardofMedicalExaminers,159OrApp175(1999)(discussingtheconceptsofburdenofproofand

standardofreview).

TheTaskForceappreciatestheopportunitytostudythisissue.Therecommendationsare

designedtofurtherthegoalsofimprovingpatientsafety,improvingthesystemfor

compensatinginjuriessustainedasaresultofmedicalerrors,andreducinginsurance

administration,litigation,anddefensivemedicinecostsassociatedwiththemedicalliability

system.



TheTaskForcehopesthattheefforttoachievethesegoalswillcontinuebyadoptionof

theserecommendations,includingthedevelopmentoflegislativeproposalsrelatingto

disclosure,fullexplorationoftheevidence‐basedguidelinesafeharborconcept,and

commissioningofastudyofthedesignandfeasibilityofanadministrativesubstituteforthe

medicalliabilitysystem.

Appendix1.LiabilityCostTrends



Thecostofindemnitypaymentsisafunctionofthefrequencyofclaimsandaverage

paymentamounts.InOregon,thefrequency ofclaimsfiledagainstphysiciansincourtthat

havebeenreportedtotheOregonMedicalBoardhasbeensomewhatvolatileinthelast

fewyears;onbalance,however,althoughOregon’spopulationhasgrown,therehasbeen

noapparentupwardtrend.(Seechartbelow.)



Frequency of Reported Claims Against Physicians

2002-2009

100

150

200

250

300

350

400

450

500

2002 2003 2004 2005 2006 2007 2008 2009

Year

Number of Claims

Total Number of Claims

Reported

# of Claims with Court

Proceedings

# of Claims without Court

Proceedings

Source: Oregon Medical Board data, 2002-2009.

Note: In 2007, changes were made in recording requirements. Starting July 17,

2007, only claims with lawsuits were required to be reported.



ThenumberofpaidclaimsagainstprofessionalsreportedtotheNationalPractitionerData

Banksurgedin2008;butuntildataisinfor2009and2010,longtermtrendswillnotbe

clear.(Seechartbelow)

Oregon Professional Liability Claims Paid

2004-2008

150

160

170

180

190

200

2004 2005 2006 2007 2008

Year

Number of claims paid

Source: National Practitioner Data Bank.



Thetrendisnotclearwithrespecttodollaramountofpayments.Inareportissuedin

February2008,theOregonMedicalAssociationandCNAHealthProreportedthatthe

averageindemnityamountpaidinphysicianclaimsdeclinedmorethan7.5percentfrom

July1,1999–October10,2005toOctober11,2005–October10,2007.Thereissome

indicationintheOregonMedicalBoarddata,however,thattotalpaymentsmadeincases

filedincourtagainstphysicians(andothers)isrising.Seechartbelow.



Total Indemnity Paid on Behalf of All Defendants in

Lawsuits Against Physicians 2002-2009

$20,000,000

$40,000,000

$60,000,000

$80,000,000

2002 2003 2004 2005 2006 2007 2008 2009

Year

Payment

Source: Oregon Medical Board Malpractice Report Dataset.



Appendix2.TrendsinPhysicianPremiumsforMedicalLiabilityInsurance



MedicalliabilitypremiumsforthethreephysicianspecialtiesarereportedintheMedical

LiabilityMonitor,thepre‐eminentindustrypublication.OHPRstaffaveragedthereported

premiumratesforeachstatebyyearandpreparedthegraphsbelow.



General Surgery

Average Premium Rates (CA, OR & WA)

10000

20000

30000

40000

50000

60000

1992

1994

1996

1998

2000

2002

2004

006

008

2010

Year

Average Premium Rate ($)



OB/Gyn Average Premium Rates (CA, OR & WA)

10000

20000

30000

40000

50000

60000

70000

80000

1992

1994

1996

1998

2000

2002

2004

006

008

2010

Year

Average Premium Rate

Notes:TheMedicalLiabilityMonitorsurveysmajorwritersofprofessionalliability

insuranceforphysicianseachyear.Thesurveyincludesmanualratesforspecificmature

claims‐madespecialtieswithlimitsof$1million/$3million(themostcommonlimits).The

Monitorreportsonthreespecialtiesonlytoreflectthewiderangeof

ratescharged:internal

medicine,generalsurgeryandobstetrics/gynecology.Theratesarethereportedrates

unlessotherwisenotedandshouldnotbeinterpretedastheactualpremiumsanindividual

physicianpaysforcoverage.Theydonotreflectcredits,debitsdividendsorotherfactors

thatmayreduceorincreasepremiums.Ratesreportedalsodonotincludeother

underwritingfactorsthatcanincreasepremiums.Itisestimatedthatthesurveyrepresents

companiesthatcomprise65to75percentofthemarket

nationally.

Appendix3.TestimonyConcerningtheMedicalLiabilityPremiumSubsidyProgram



Beforethe

SenateandHouseInterimCommitteesonJudiciary

May24,2010



Testimonyof

CoryStresinger,Director

DepartmentofConsumerBusinessServices



MynameisCoryStresinger.IamtheDirectoroftheDepartmentofConsumerandBusiness

Services.IamheretodaytoupdatetheCommitteesontheprogramthatsubsidizesmedical

professionalliabilityinsurancecostsforruraldoctors.



 TheprogrambeganwithenactmentofHouseBill3630in2003.Thegoalofthe

programwastoassistinattractingandretainingdoctorsinruralOregon,andparticularly

doctorswhoprovideobstetricservices.Thelegislationwastheresultofescalatingconcern

abouttheavailabilityandaffordabilityofmedicalprofessionalliabilityinsurance,

particularlyforruraldoctorswhoprovideobstetricservices.



 HouseBill3630directedtheStateAccidentInsuranceFundCorporation(SAIF)to

establishareinsuranceprogramformedicalprofessionalliabilityinsurancepoliciesissued

toruraldoctors.Theprogramwassuccessfulinprovidingmedicalliabilityinsurancerate

relieftoruraldoctors,andin2007,thelegislatureenactedSenateBill183toextendand

modifytheprogramforanadditionalfouryears,through2011,butwithintheoriginal

fundinglimitsetin2003.



 Inrecognitionoftheroleplayedbynursepractitionersinprovidingmedicalcarein

ruralOregon,theprogramwasexpandedtoincludesomenursepractitionerswhohavea

ruralpractice.Inaddition,thedefinitionofqualifying“rural”areawasmodifiedtoexclude

areasconsidered“urbanized”byU.S.Census

definitionssuchasAshland(exceptforthose

doctorsandnursepractitionerswhoprovideobstetriccare).Also,inordertobeeligiblefor

theprogram,doctorsandnursepractitionershadtobewillingtoserveMedicareand

Medicaidpatients.



 Theprogramcontinuestoprioritizeobstetriccare,andthosewhopracticeobstetrics

continuetoreceivethehighestsubsidies–80percentforobstetriciansandnurse

practitionerscertifiedforobstetriccareand60percentforfamilypractitionersorgeneral

practitionerswhosepracticeincludesobstetrics.Doctorsandnursepractitionersin

specifiedprimarycarefieldssuchaspediatricsandfamilypracticereceivesubsidiesupto40

percent,whilesubsidiesfordoctorsandnursepractitionersinnon‐primarycarefields

declineoverthefouryearperiodfromnotmorethan35percentin2008,to25percentin

2009,andto15percentin2010and2011,basedonavailablefunds.



 Attachedaretheexpendituresbyyearfortheprogram,aswellasdatashowingthe

totalnumberofmedicalprovidersparticipatingintheprogramsinceitsinceptionandthe

numberofprovidersparticipatingbycounty.Atotalofabout$29.1millionhasbeenspent

throughcalendaryear2009.Enrollment

during2009was881,consistingof827doctorsand

54nursepractitioners,andSAIFexpendedabout$3.7millionforcalendaryear2009.

Enrollmentforthefirstquarterof2010iscurrently753doctorsand48nursepractitioners.

Thenumberofdoctorsandnursepractitionersreceivingsubsidiesinagivenyearmay

not

equaltheenrollmentforthatyearforvariousreasons.Forexample,requestsforsubsidies

maynotoccurinthesamecalendaryearinwhichthesubsidywasprovided.



 Thefundingfortheprogramcamefromcreditagainstworkers’compensation

assessmentspaidbySAIF.TheseassessmentsarecollectedfromOregonemployersfor

administrationofOregon’sworkerscompensationsystem.Underthelaw,theprogram

costswerecappedat$40million,basedonaone‐timesurplusinthisworkers’

compensationaccount.However,thatsurplushaslongsincegoneandthisaccountisnota

sustainablesourceoffundingforthisprogram,althoughtherewillbesufficientfunds

availableforthelasttwoyears.



 Theprogramcontinuestoprovidemedicalprofessionalliabilityinsuranceraterelief

forbothruraldoctorsandnursepractitioners.Itshouldbenotedthatthemedical

professionalliabilityinsurancemarkettendstobycyclical,andrateshavebeendecliningin

recentyears.RatesforOregon’stwolargestinsurershavegonedownanaverageof20

percentsince2006:



Appendix4.ProposedAdditiontoOregon’sInsuranceCode



(1)

(a) “Adverseevent”meansanegativeconsequenceofpatientcarethatis

unanticipated,isusuallypreventableandresultsinorpresentsasignificantriskof

patientinjury.

(b) “Claim”meansawrittendemandforrestitutionforaninjuryallegedtohavebeen

causedbythemedicalnegligenceofahealthpractitionerorlicensedhealthcare

facility.

(2)Aninsurermaynotdeclineorrefusetodefendahealthpractitionerorahealthcare

facilityagainstaclaimarisingfromanadverseeventforanyreasonthatisbasedonthe

disclosuretothepatientorthepatient’sfamilybythehealthpractitionerorfacilityof

theadverseeventorinformationrelatingtothecauseoftheadverseevent.

Appendix5.StateMedicalErrorDisclosureLaws



State Oregon Pennsylvania

Covered

entities

hospitals, ASCs, dialysis centers, nursing

homes, and pharmacies (voluntary)

Hospitals, ASCs, and birth centers

(mandatory)

What must be

reported?

Serious adverse events specified by rule--

e.g., in the case of hospitals, "any

unanticipated, usually preventable

consequence of patient care that results in

patient death or serious physical injury,

including the events described in Appendix

Serious events, incidents, and infrastructure

failures.

A serious event is "an event, occurrence or

situation involving the clinical care of a

patient…that results in death or

compromises patient safety and results in

an unanticipated injury requiring the

delivery of additional health care services to

the patient."

An incident--like a serious event--

compromises patient safety, but it does not

result in unanticipated injury or require the

delivery of additional health services.

An infrastructure failure is "an undesirable

or unintended event, occurrence or

situation involving the infrastructure of a

medical facility or the discontinuation or

significant disruption of a service which

could seriously compromise patient safety."

What must be

disclosed?

Reportable events [See reporting

requirement.]

Serious events [For definition see reporting

requirement.]

How? in writing In writing

When? in a timely way Within 7 days of the event

Who is

responsible?

the facility The facility is responsible for disclosure;

health care workers (includes facility

employees and physicians authorized to

practice in the facility) must report.



State New Jersey California Florida

Covered

entities

all health facilities including

outpatient clinics, labs, and

pharmacies

Hospitals (mandatory) Hospitals, ASCs, mobile

surgery facilities, and

licensed health care

practitioners (mandatory)

What must

be reported?

Serious preventable adverse

events.

A serious preventable

adverse events is "an event

that is a negative

consequence of care that

results in unintended injury

or illness" AND "could have

been anticipated and

prepared against, but occurs

because of an error or other

system failure" AND "results

in death or loss of a body

part, or disability of loss of

bodily function lasting more

than seven days or still

present at the time of

discharge from a health care

facility"

Adverse events (multipage

definition which tends

toward events resulting in

death or serious (but not

necessarily permanent)

disability.

"Adverse incidents that

result in serious harm to the

patient." Adverse incident

means "an event over which

health care personnel could

exercise control and which is

associated in whole or in

part with medical

intervention, rather than the

condition for which such

intervention occurred" AND

which had one of a laundry

list of rather serious

consequences.

What must

disclosed?

Serious preventable adverse

events and allergic

reactions. [For definition see

reporting requirement.]

An adverse event defined as

"an event that is a negative

consequence of care that

results in unintended injury

or illness, which may or may

not have been preventable"

that involves an allergic

reaction.

Adverse events [For

definition see reporting

requirement.]

"Serious adverse incidents"

[Undefined, but see

definition of adverse incident

in reporting section.]

How? In person if patient in facility;

by telephone if patient is no

longer in the facility and a

face-to-face meeting cannot

be arranged; by certified

mail if facility cannot contact

the patient by phone.

Contents of the notification

must be documented in the

patient's medical record.

"inform" "inform"

When? No later than the end of the

episode of care

By the time the report is due

(within 5 days after the error

was detected)

"as soon as practicable"

Who is

responsible?

the facility The facility Facilities and licensed

providers



State Vermont Washington

Covered

entities

Hospitals (mandatory) Hospitals (mandatory)

What must

be reported?

"Adverse events" that by

rule must be reported.

(Rule adopts NQF list)

"Adverse event" is defined

as "any untoward incident,

therapeutic misadventure,

iatrogenic injury, or other

undesirable occurrence

directly associated with

care or services provided

by a health care provider or

health facility" ?

What must

disclosed?

"Adverse events" that

cause "death or serious

bodily injury."

Only requirement is for

hospital to have a policy in

place to assure that "when

appropriate, Information

about unanticipated

outcomes is provided"

How? "disclose" unspecified

When? unspecified unspecified

Who is

responsible? The hospital The hospital



Appendix6.RecommendedStudy.



Thefeasibilitystudyshouldaddressthefollowingdesignissues,amongothers.Itshould

identifyalternativedesignchoicesandevaluatetheirimpactonobjectivesidentifiedinthe

TaskForce’sframeworkformedicalliabilityreform:



• Compensabilitystandard:Whatoptionsaretherefordefiningtheinjuriestobecovered

bythesystem?



• Filingofclaims:Shouldclaimsbeconsideredonlyiffiledbytheinjuredpatientorher

representativeorfamily?Shouldprovidersberequiredtoaffirmativelyadvisethe

patientofanymedicaleventthatmeetsthethresholdforaclaimforbenefitsanddirect

hertotheagencythatprocessesclaimsasinothersystems?Shouldprovidersbe

requiredtofilesuchclaimsonbehalfoftheinjuredpatientasintheworkers

compensationsystem?



• EconomicLosses:Whatlosseswillbereimbursed?

o MedicalCosts:Willcompensablelossesincludemedicalcostsastheydointhe

workers’compensationsystemorshouldallfinancialresponsibilityformedical

costsrelatedtotheinjurybebornebythehealthinsurerand/ortheinjured

patient?Ifmedicalcostsarecompensable,howwillresponsibilityforthose

costsbeapportionedanddetermined?Shouldresponsibilitybeapportionedin

theadministrativeproceeding,withthecollateralsourceruleabolished?Or

shoulditbetheresponsibilityofthefundtocollectfromahealthinsurerwithout

involvingtheinjuredpatient?

o Deathbenefits:Shoulddeathbenefitsbepayable?Istheworkerscompensation

systemagoodmodel?

o Lumpsumpaymentorongoingresponsibilityforlosses:Willlosses—suchas

predictedcostsofmedicalcare,non‐medicalcaresuchashomecareorskilled

nursingcare,andlostwages—bepaidinalumpsumorwilllossesbepaidbythe

administrativesystemonanon‐goingbasis?Ifonanongoingbasis,whowill

decidewhatneeds

arerelatedtotheinjuryanddeterminewhatservicesare

necessaryandwhatwillbepaidforthem?Willexpensesbereimbursedtothe

patientorpaiddirectlybythesystem?



• Non‐economicLosses:Shouldnon‐economicdamagesbepaidaccordingtoaschedule?

Howwillschedulesbeestablishedandupdated?



• Responsibility:Howwilltheadministrativesysteminterfacewiththetortsystemin

casesinwhichsomeoneotherthanaprofessionalorahealthcareinstitutionbearssome

responsibilityfortheinjury(e.g.,defectivemedicaldevice)?



• Administration:Willtherestillbeinsurancecarriersthatacceptordenyandpayclaims?

Willtherebeasinglestatefundoutofwhichclaimsarepaid?



• Financing:Whowillpayfortheadministrative/adjudicativeapparatus?Whowillpay

forthecostofclaims?



• Attorneyfees:Howwillinjuredpatients’lawyersbepaid?(Bythesystem?Outofthe

injuredpatients’recovery?



• Appeals:Whomayappealanadversedeterminationbytheadministrativeadjudicator?

Shouldtheappealbetakentothecourtofappealsinthesamemannerandreviewed

underthesamestandardasdecisionsincontestedcases?Whoshouldpaycostson

appeal?

I

Thestudyshouldaddressthespecificquestionslistedbelow:



• PatientSafety

o Whatisthelikelyeffectofreplacingthemedicalliabilitysystemwithan

administrativecompensationsystemonpatientsafety?

o Willitcreatemoreorlessincentiveforhealthcareprovidersandfacilitiesto

investinpreventionofmedicalerrors?

o Willtheeffectonsafetyincentivesdependonhowthesystemisfinanced?

o Willtheproposedchangesupportthesafetyimprovementinfrastructuremore

orlesseffectively?

o Willsomeadministrativesystemdesignssupportpatientsafetyimprovement

moreeffectivelythanothers?



• Accesstoandadequacyofpayment

o Whatisitslikelyeffectonaccesstoandamountsofcompensationforpatient

injury?

o Howwouldthechoiceofcompensabilitystandardandotherdesignchoices

affectnumbersofinjuredindividualscompensatedoramountsofrecovery?

Whowillsufferasaconsequenceofanypaymentreductions?



• Relationshiptothehealthcaresystemandhealthinsurancecosts

o Howwillanadministrativeprogramaffecthealthinsurancecosts?

o Howwillitaffectthepracticeofdefensivemedicine?



• Federalissues

o IsERISAimplicatedbyanadministrativeprogram?

o Howwouldfederalpayersinteractwithit?

o Wouldtheyhaveliensagainstrecoveries?



• Stateconstitutionalissues(righttojurytrialandrighttoremedy)

o Cananadministrativeprogrambeimplementedtoreplacethetortsystem

withoutstatutoryorconstitutionalchanges?

o Ifnot,whatchangesarenecessary?

o Willsomesystemdesignspassconstitutionalmusterandothersnot?



• Financialfeasibility

o Whataretheanticipatedtotalcostsoftheprogram?

o Howdothosecostscomparetothoseofthecurrentsystem?



• Politicalfeasibility

o Arehealthcareprovidersandinstitutionsthatcurrentlytakedirectresponsibility

forpayingforthecurrentliabilitysystemintheformofpremiumswillingto

financethenewadministrativesystem?Ifnot,whois?

o Whocanbeexpectedtosupportoropposetheconcept?



Replacingthecurrentsystemwithanadministrativeonewouldbotheliminatejurytrialsandlimitdamages

totheextentthatcompensationisscheduledinsomeway.Althoughtheultimatereactionofanygroupto

theresultsofastudycannotbepredictedwithcertainty,itcanbeanticipatedthattrial

lawyerswho

representinjuredOregoniansandothergroupswhohaveopposedpreviouseffortstoimposecapson

damagesmayviewanadministrativesubstitutefortherighttoajurytrialfornegligenceasanassaulton

fundamentalrightsandvigorouslyopposeit.

Appendix7.MajorSourcesConsulted.



“AdjudicatingSevereBirthInjuryClaims,”AmericanJournalofLaw&Medicine,34,no.4,

2008,pages531‐533.



Alfonso‐Zaldivar,Ricardo.“LimitingMedicalLawsuitsCouldSave$41B,”SanFrancisco

Chronicle,10/1/09,http://sfchronicle.us/cgi‐

bin/article.cgi?f=/n/a/2009/10/09/national/w113642D64.DTL



Berwick,DonaldM.,ThomasW.Nolan,JohnWhittington.“TheTripleAim:Care,Healthand

Cost”HealthAffairs,27,no.3,2010,pages759‐769.



Blumstein,JamesF.“MedicalMalpracticeStandard‐Setting:DevelopingMalpractice‘Safe

Harbors’asaNewRoleforQIOs?”VanderbiltLawReview(2006)



Carrier,EmilyR,etal,

“Physicians’FearsofMalpracticeLawsuitsAreNotAssuagedByTort

Reforms,”HealthAffairs,29,no.9(2010),pages1585‐1592.



“CBOScoringofTortReform,”CongressionalBudgetOffice,10/9/9,

http://www.cbo.gov/ftpdocs/106xx/doc10641/10‐09‐Tort_Reform.pdf



CenterforJusticeandDemocracy,“ClinicalPracticeGuidelinesasLegalStandards—the

WrongCureforHealthCare.”



Clinton,HilaryRodhamandBarackObama,“MakingPatientSafetytheCenterpieceof

MedicalLiabilityReform,”NewEnglandJournalofMedicine,5/25/06,

http://content.nejm.org/cgi/content/full/354/21/2205



CommonGood,“WindowsofOpportunity:IdeasforImprovingMedicalInjury

Compensation”(2006).



“Doctors’FearsDriveCosts,”TheNewYorkTimes,10/5/09

http://www.intelihealth.com/IH/ihtIH/E/333/343/1345381.html



Gingrich,NewtandWayneOliver,“Sellingoutdoctorstopayofflawyers,”Politico9/5/09

http://www.politico.com/news/stories/0909/26707.html



Harper,Amber.Harperisgeneralcounseltotheorganization"CommonGood,"whichisan

advocateforhealthcourts.ShepresentedtotheTaskForceduringitsmeetingofAugust4,

2010.



“Healthcarerunbytriallawyers,”Editorial,WashingtonPost,8/27/09

http://www.washingtontimes.com/news/2009/aug/27/health‐care‐run‐by‐trial‐lawyers/



Howard,Phillip,“HealthReform’sTabooTopic,”TheWashingtonPost,7/31/09,

http://www.washingtonpost.com/wp‐

dyn/content/article/2009/07/30/AR2009073002816.htm



Howard,Phillip,“JustMedicine,”NewYorkTimes,4/1/2009.



“IsBetterPatientSafetyAssociatedwithLessMalpracticeActivity?Evidencefrom

California,”RAND(2010)http://www.rand.org/pubs/technical_reports/TR824/

Kachalia,Allen.KachaliaisMedicalDirectorforQualityandSafetyforBrigham&Women’s

Hospital.HealsoholdsanappointmentattheHarvardSchoolofPublicHealthwherehe

teachesacourseontheLawandClinicalMedicine.TheTaskForcespokewithhimabout

hisresearchonthedisclosure

programatUniversityofMichiganandotherissuesduringits

meetingofSeptember8,2010.



Kachalia,Allen,etal.“DoesFullDisclosureofMedicalErrorsAffectMalpracticeLiability?

TheJuryIsStillOut,”JointCommissionJournalonQualityandSafety,29,no.10,2003,

pages503‐511.



Kachalia,Allen,etal.“LiabilityClaimsandCostsBeforeandAfterImplementationofa

MedicalErrorDisclosureProgram,”AnnalsofInternalMedicine,153(4),2010,pages213‐

222.



LeCraw,Linda.,“UseofClinicalPracticeGuidelinesinMedicalMalpracticeLitigation,”

JournalofOncologyPractice,3,no.5,2007.



Leonhardt,David.“MedicalMalpracticeSystemBreedsMoreWaste,”NewYorkTimes

http://www.nytimes.com/2009/09/23/business/economy/23leonhardt.html



Martin,SusanTaylor,“Canadakeepsmalpracticecostsincheck,”St.PetersburgTimes,,

http://www.tampabay.com/news/article1021977.ece

,7/27/09.



Martinis,Cheryl,“Oregonmedicalmalpracticeratescontinuetodecline,”Departmentof

Consumer&BusinessServices,2010.



Mastroianni,AnnaC.,etal.“TheFlawsinState‘Apology’and‘Disclosure’LawsDiluteTheir

IntendedImpactonMalpracticeSuits,”HealthAffairs,29,no.9,2010,pages1611‐1619.



“MedicalMalpracticePremiumsContinuetoFall,PublicCitizen,3/3/10

http://www.citizen.org/documents/NPDBFinal.pdf

Mello,MichelleM.,andThomasH.Gallagher.“MalpracticeReform–Opportunitiesfor

LeadershipbyHealthCareInstitutionsandLiabilityInsurers,”NEngJMed,362,no.15

2010,pages1353‐1356.



Mello,MichelleM.,andAllenKachalia.“EvaluationofOptionsforMedicalMalpractice

SystemReform:AReporttotheMedicarePaymentAdvisoryCommission(MedPAC),”

www.medpac.gov/documents/Apr10_MedicalMalpractice_CONTRACTOR.pdf

.



Mello,MichelleM.andTrovenBrennan,“TheRoleofMedicalLiabilityReforminFederal

HealthCareReform,”NewEnglandJournalofMedicine,7/2/09,

http://content.nejm.org/cgi/content/full/NEJMp0903765



Mello,MichelleM,etal,“NationalCostsoftheMedicalLiabilitySystem,”HealthAffairs,29,

no.9,2010,pages1569‐1577,2010.



MelloMichelleM.,“OfSwordsandShields:TheRoleofClinicalPracticeGuidelinesin

MedicalMalpracticeLitigation,”UniversityofPennsylvaniaLawReview,2001.



Necochea,Lauren.“HealthCourts:

AnAlternativeforResolvingMedicalLiabilityClaims,”

RWJFResearchHighlightno.12,2006.



OregonProfessionalPanelforAnalysisofMedicalProfessionalLiabilityInsurance,“AReport

onFactorsImpactingMedicalMalpracticeInsuranceAvailabilityandAffordability,”2004.



Peters,Jr.,PhilipG.“HealthCourts?”BostonUniversityLawReview,2008.



Plautz,Jason.“HealthCarePushRevivesTortReformDebate,”NationalJournalOnline

9/1/09http://www.nationaljournal.com/njonline/no_20090831_5711.p hp



“RobertGibbsistalkingmedicalmalpracticereform,”BlueCommonwealth,10/4/09

http://www.bluecommonwealth.com/showComment.do?commentId=4129



Semel,MarcusE.,etal.“AdoptingASurgicalSafetyChecklistCouldSaveMoneyand

ImprovetheQualityofCareinU.S.Hospitals,”HealthAffairs,29,no.9,2010,pages1593‐

1599.



Siegal,Gil,etal.,“AdjudicatingSevereBirthInjuryClaimsinFloridaandVirginia:The

ExperienceofaLandmark

ExperimentinPersonalInjuryCompensation,”AmericanJournal

ofLaw&Medicine,34,no.489,2008.



SpotlightonMalpracticeReform,RobertWoodJohnsonFoundation,1/7/2010

http://www.rwjf.org/pr/product.jsp?id=53988



Studdert,D.M.,etal.,"CantheUnitedStatesAfforda‘No‐Fault’SystemofCompensation

forMedicalInjury?"LawandContemporaryProblems,60,no.2,1997.pages1–34.



Thomas,J.William,etal,“LowCostsofDefensiveMedicine,SmallSavingsfromTort

Reform,”HealthAffairs,29,no.9,2010,pages1578‐1584.



Thomsen,Mark.“Malpractice‘reform’won’tfixhealthcareorsavemoney,”TheCapital

Times,10/1/09http://host.madison.com/ct/news/opinion/column/guest/article_7e4a5f20‐

ae01‐11de‐805a‐001cc4c03286.html