Bench & Bar

SEP 2014

The Bench & Bar magazine is published to provide members of the KBA with information that will increase their knowledge of the law, improve the practice of law, and assist in improving the quality of legal services for the citizenry.

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dis- e ased one), wrong site, or wrong patient pro- c edure. The Joint Commission Center on Transforming Healthcare recently reported, h owever, that as many as 40 wrong site, wrong side and wrong patient procedures happen every week in the U.S. 14 Even re- m arkably few of these patients ever file a claim. Researchers in Colorado found that of patients who were operated on in error ( wrong patient) or who received operations on the wrong site, only 21.5 percent ever filed a claim or a lawsuit. 15 Equally astound- ing is a simple comparison of the typical annual number of medical negligence pay- outs (38,363) 16 compared to the number of estimated annual deaths caused by pre- ventable medical error (238,337) 17 , and that doesn't even account for the cases resulting in severe injury short of death. In Kentucky alone, there are an estimated 2,700 deaths a year caused by preventable medical error, to say nothing of the number of severe in- jury cases not resulting in death. 18 Yet, ac- cording to the Kentucky Department of In- surance, there were only 498 total claims of medical negligence in 2013. 19 So, if there is no "medical liability crisis," and the number of medical negligence claims has always been small and is only getting smaller – even in an environment with an astonishing number of preventable medical errors – and the overwhelming ma- jority of those claims are meritorious, then why has the insurance industry and other special interests been spending so much energy and money trying to push through "tort reform," starting with medical review panels, in Kentucky? I think it's safe to say it doesn't have anything to do with promot- ing patient safety or lowering the costs of health care in our state. As lawyers, we understand that accounta- bility drives safety and a lack of accountabil- ity disincentivizes carefulness. Our nation's and commonwealth's founders created a tort system with two express goals: (1) to compensate and make whole, to the extent possible, any citizen who is harmed by a wrongdoer, and (2) to deter wrongdoing in the first place and, thereby, make every- body safer. It is imperfect, but it is the greatest legal system any civilization has ever known. In terms of accountability, it works remarkably well. Many states have fallen for the "tort re- form" swindle – and those states have ex- perienced first-hand what happens when you create obstacles to accountability. A study from the American College of Emer- gency Physicians found that safety im- proves when injured patients can hold neg- ligent hospitals or physicians accountable and gets worse when there is less account- ability. 2 0 The states with aggressive legisla- tion limiting patient access to the legal sys- tem scored lowest in patient safety. Overall, the 10 states tort reform groups claim to have the "best liability environment" (i.e. more tort reform) have a D+ score for pa- tient safety. By contrast, the 10 states tort reform groups claim to have the "worst lia- bility environment" have a B- for patient safety, above the C+ national average. The 25 states with the "best liability environ- ment" (again, more tort reform) all rank be- low the national average for patient safety. Every single one. 21 Similarly, data collected from the non-parti- san Commonwealth Fund show healthcare in states that cap damages in medical negli- gence cases tends to be of lower quality than healthcare in states that do not. 22 A study from Tulane University found that states with more accountability experienced lower rates of mortality. 2 3 A University of Texas analysis found that insulating medical providers from liability was detrimental to patient safety and concluded, "The widely held belief that fear of malpractice liability impedes efforts to improve the reliability of health care delivery systems is unfound- ed." 24 And, another peer-reviewed study noted, similarly, that medical negligence "reforms" resulted in lower healthcare quali- ty and increased infant mortality. 25 On the other hand, there are many exam- ples of hospitals and entire medical special- ties that have increased accountability or reformed dangerous practices, often in re- sponse to lawsuits and jury awards, and ex- perienced dramatic patient-safety results, not to mention economic savings. Hospitals that have embraced full disclosure of med- ical errors 26 have found the number of neg- ligence claims and their related costs de- cline. The Veterans Affairs (VA) hospital in Lexington has been a leader in the field by offering a strong disclosure program cou- pled with quick and fair offers of compensa- tion when appropriate. Average settle- ments at the institution are now around $15,000, as opposed to $98,000 at other VA hospitals. 27 Maybe the most dramatic example is in the area of anesthesiology. In the 1970s, anes- thesiology was one of the highest risk med- ical specialties. In order to improve patient safety and reduce doctors' medical negli- gence costs, the American Society of Anes- thesiologists created the Closed Claims Project to analyze data from lawsuits. Re- searchers were able to identify system fail- ures and implement comprehensive prac- tice changes. The results yielded a dramatic improvement in patient safety and, in the process, anesthesiologists drastically low- ered their inflation-adjusted malpractice in- surance premiums. 28 Before the Closed Claim Project, one of every 10,000 people who went under anes- thesia died from the procedure. After the project, that number changed to one of every 200,000. Before the lawsuit analysis project, anesthesiologists were responsible for 7.9 percent of all negligence claims. Af- terward, that number was more than cut in half to 3.8 percent. When adjusted for infla- tion, the average malpractice premium for anesthesiologists dropped between 1985 and 2002. This type of accountability not only reduces costs for the hospitals and physicians who embrace it, it literally saves lives, and its savings to the health care system are dra- matic. Preventable medical errors, especial- ly those that do not kill the patient, lead to billions of dollars in additional health care costs each year. A 2010 report released by the Office of the Inspector General at the U.S. Department of Health and Human Services (HHS) found that one in seven Medicare patients are injured during hospi- tal stays and that adverse events during the course of care contributes to the deaths of 180,000 patients every year. These adverse events, just in the Medicare system, cost the government and taxpayers an addition- al $4.4 billion annually. 29 While some insurance programs have start- ed to alter their reimbursement plans, the majority of healthcare providers and facili- ties actually are compensated for the sub- sequent procedures needed as a result of the preventable medical errors they com- mitted. In the year 2000, when the estimat- ed deaths from preventable medical error was measured at 98,000, the Institute of Medicine estimated that the corresponding costs ranged from $17 billion to $29 billion annually. 30 Today studies have found the costs of preventable medical error to be $1 trillion every year. 31 It is worth mentioning here that the tort re- form lobby's claim that the "medical liability crisis" is causing physician shortages and doctors are fleeing states with no liability barriers for ones with "reform" are, like their other claims, objectively false. Accord- 19 B&B; • 9.14 F E AT U R E : T O R T S article continued on pg. 21

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