Federal Medical Malpractice Reform - Case Study Example

? Federal Medical Malpractice Reform of Institute: Outline 0 Introduction 2.0 Key Concepts of Federal Medical Malpractice Reform 3.0 Driving and Restraining Forces 4.0 Stakeholders, 5.0 Contributing Factors that Led to Failure. 6.0 Conclusion 7.0 References Federal Medical Malpractice Reform There have been rapid and recent developments in the American medical health care systems that have warranted review of various sectors for instance, Health Care Law. Prime amongst them medical liability system whose role in driving up patient’s medical expenses has not gone unnoticed. The American Medical association and several Congressional work groups including the Simpson-Bowles commission and the Domenici-Rivlin Debt Reduction Task Force have voiced strong opinion that reform in the sector lies at the heart of servicing federal deficit and securing justice for injured patients. The Congressional Budget Office has estimated that in the next decade up to $ 62.4 billion will be spent on a defective medical malpractice system. In light of these facts and the majority public support for reform in the sector, the failure of the bipartisan malpractice reform bill at the senate that was slated to cap non-economic damages at $250, 000 and indeed countrywide failure to comprehensively enact reform legislation requires a return to the drawing board. Medical liability reform is at the heart of health care access. Key Concepts of Malpractice Reform The sky-rocketing premium costs incurred in covering doctors from malpractice suits much publicized court cases involving physicians has been argued to be behind the cut-backs in risky medical procedure that deprived ordinary Americans much needed medical services. This feature termed defensive medicine has ramifications that go beyond just the health department. In certain states physicians are planning to move to states where premiums are lower and insurers are exiting the industry. The problem is partly judicial as out-of-control jury awards have caused the unrestrained rise in costs, (Pozgar, 2011). Because of these hefty insurance costs that are passed on to patients, they drive inflation in the medical sector. Thus any health plan that is directed at liability reform should have measures aimed at stabilizing these rising costs. Of importance is the cap on non-economic damages which has the effect of stemming surges of indemnity losses by lowering the severity of claims and consequently premiums. Non-economic damages, sometimes termed hedonic damages, compensate harms that are hard to quantify. Every aspect of malpractice award can be quantified save for this and left to the discretion of the jury. The cap could be enhanced by allowing punitive damages. These have also been shown to have a significant impact on costs tied to the medical malpractice system (Kachalia & Mello, 2011). An offset for collateral payment could also lower the financial exposure of physicians and also the multiplicity of suits at which damages are collected. There have been recent developments that have impacted how much premium health care providers paid and the possible exposure risked. Among these are; physician exit of carriers in the market that offer affordable rates and over which physicians have some degree of control; growth of hospital self-insurance that creates a risk pool enabling more high-risk features; by affiliating with their institutions, hospitals that buy policies for their doctors stabilize insurance costs passed to doctors and finally the emergence of joint underwriting associations and patient compensation funds that cover losses exceeding the care provider’s policy limit. Other developments work to raise these costs. These are claim-made policies as opposed to occurrence policies that leave wide berth for a multiplicity of suits on which further damages are collected since they are filed once a year; increases in re-insurance costs are passed on to the doctors by their primary insurers. A dip in investment returns also causes insurers to hike premiums. There has been a ‘health courts’ proposal that seeks to phase out the traditional malpractice common-law state trial system with constitutionally created federal health courts that will be administrative in nature which may take care of the current loopholes of the judicial system. These and other emerging measure packages form the basis of medical liability reform. Some of those mentioned are mostly state level but because Congressional efforts acting on state reform have been unable to map out a comprehensive legislative framework for malpractice reform. Driving and Restraining Forces The factors fuelling the high premium costs are translated into the bulwarks against federal malpractice reform while those driving down these high premium costs are those aiding reform. It is these factors that federal legislation should be directed at in trying to enact medical malpractice reform. It is important to understand the relationship between rising costs in premium and health care. It is rising costs in the health care sector that cause increases in malpractice law by causing a proportionate rise in premium costs. The factors underlying the huge rise in health care costs have been narrowed down to six; one of which is obvious malpractice liability. The rest include: technology, with breakthroughs in modern medicine and state-of-the-art treatment whose demand increases yearly but they come with significantly pricing; prescription drugs which are more in use now than they have ever been besides change to expensive drugs and over-all inflation has caused an increment in costs; under-funding of public health programs and plans like Medicaid and the deficits are passed on to the system and regulations imposed by the federal government incur administrative costs on insurers which cumulatively add costs in the health sector. Increased consumer demand is also a factor driving costs. The pace at which jury awards are being given and the significantly large amounts is one of the factors causing escalation in the high insurance premium costs. A cause directly restraining federal malpractice reform is that notion that medical malpractice reform fell in the exclusive control of state while healthcare planning and tort law were the jurisdiction of the federal government. Another argument affecting reform in general is the idea that health and medicine are sectors of the economy plagued by failure. It is hard for patients to make quality judgments on the products they receive and harder for service providers to judge on the quality of their services even after they have offered them. Besides, there is disproportion in the information between patients and care givers. These factors have been argued by some such as Kenneth Arrow as justifying government intervention. But congress isn’t constitutionally authorized to impose substantive state tort law rules though it can pass procedural laws the state is the repository of power controlling civil justice. Working against federal government intervention is the fact that bad law injurious to patience once enacted becomes difficult to remove. Further malpractice suits help patients and imposing general restrictions on the right to sue for medical negligent will be beneficial to some while hurting others. Besides political disagreements between Republicans and Democrats on the overall health care plan, with Republicans viewing the plan as a determination of when the aged die, compounds the general problem of reform. Stakeholders The malpractice framework is made up of many players. There are the physicians and subjects of the malpractice suits; the patients who are the victims of care-giver negligence; the insurance providers who cover the healthcare givers and tort reformers who seek to regulate the system among others. The tort reformers and doctors attack the current malpractice framework for its hefty, unpredictable and whimsical jury awards, its greedy lawyers and frivolous claims all which translate into costs passed onto the patient (Boumil & Hattis, 2011). The system is deeply flawed with accusations of patient compensation being withheld, under-compensation and high cost reflected in healthcare costs. But this isn’t to say that the malpractice framework is defunct, deterrence is one of its primary functions and it does achieve this to some degree. Nevertheless, it is in dire need of review. The winners One of the obvious gainers of federal malpractice reform is the doctors and generally health care givers. Excessive awards and the other factors driving high premium costs are causing medical practitioners to move to states where costs are lower or out of the industry as a whole. Hospitals may even be furnished with incentives for changes. Besides under a reformed system doctors would only have to pay for those losses that they had caused and malpractice defendants will be able to put an annuity that generates monthly or periodic payments. Another is the patients. In the current malpractice framework patients with medical conditions requiring risky medical procedures will be high-risk to practitioners thus defensive medicine will make doctors avoid such procedures. Reform will make such defensive medicine unnecessary. At its heart, malpractice reform seeks to protect patients. Accidental deaths would be significantly reduced. The losers Insurers are the primary losers. With malpractice reform the big business is significantly reduced and with such reforms being aimed at the root of rising premium costs the insurance industry is sure to shoulder the burden of a revised system. They will be unable to pass on the high prices to the end consumers. Collateral damage may result from some reform. Because malpractice reform is wide and far-reaching, without limitation, it may impact negatively in unintended ways. Specifically, there have been reforms in reforming states that have been linked to reform that is discriminatory towards women and which by reducing women’s compensation have been associated with women’s death and this even in neighboring states. Factors Contributing to Reform Failure Medical liability reform faces many challenges some of which include the following: Lack of data in the industry makes some of the judgments on which conclusions are made mainly through impressions which may be colored by personal biased opinion and self-interest. The malpractice system is motivated especially by political interests. The Republican Tea Party has been touted as supporting tort reform only as an antithetical reactive strategy to ‘Obamacare’ Malpractice reform is a complex process and more complex still is the issue of political will. Political consensus is vital to passing legislation on any important issue of which malpractice reform is one of them. Democrats view tort reform proposals as purely experimental and historically they have always opposed tort reform. There is little chance of passing in a house controlled by Democrats. There are calls for the issue of malpractice reform to be debated not as a political referendum on personal injury litigation but as an issue of health policy. Another factor is lack of stakeholders’ support. The American Association of justice formerly the Association of Trial Lawyers of America opposed the recent malpractice reform proposal terming it a takeover by federal government of issues that have been the control of states. Of course at the heart of this objection is to the damage caps. There has been a consumer organization that has objected to the Gang of Six which was not a meaningful compromise but a bone thrown to republicans. Stakeholder politics is an abiding theme in malpractice reform. There is hostility from the insurers and fear of losing physician support by a raft of guidelines that doctors think will take away their discretion. Federal reform raises questions as to the separation of power and federalism concerns. Tort law is mostly state law, made and modified. The current environment that is resistant to government control over federal health care, an approach to medical malpractice reform which favors centralism is precarious politically. All this turns on the degree of budgetary savings that occurs from the proposed legislation. The questions of whether malpractice reform is necessary as a public policy and whether when fitted into the general health care plan it achieves its objectives and could the health care package be better achieved by omitting them are yet to be answered. There are some who think that the problems of health care concern health care alone and that no amount of reforms in the malpractice system will change the health sector. As always, everything hangs in the court of public opinion. The case for malpractice reform can be no different especially because it is the most publicized aspect of the health care sector. Public opinion would be the basis of political argument for malpractice reform. Unfortunately, public opinion is almost always whimsical and easily enflamed especially on key issues. There is another camp that is calling for the doing away with the malpractice system instead of a raft of measures that will do nothing to aid an already rotten apple. The system is poorly structured in the managing of cost injury and improving safety, the justice system is near inhuman to patients and the tell-tale signs of large jury awards and baseless claims are merely a drop in the ocean (Baker, 2005). Such division on the way forward and such radical and divergent thinking is more a stumbling to reform in the sector. Conclusion While the failed legislation can be ruled out as a matter of political maneuvering what is clear is that the malpractice system is in a state of disrepair and that urgent and far-reaching reforms are necessary to save it. Introducing legislation capping non-economic and punitive damages is a start. There is need for more debate on the subject as public opinion is divided and there is no coherence in the political sphere either. Perhaps this issue is one that needs to be debated among technocrats first as a policy issue before it is released to the court of public opinion. One thing however cannot be denied: the importance of malpractice reform in the health care system. Legislation on the issue needs to pass in the senate but after wide consultations. References Pozgar, George D. (2011). Legal Aspects of Health Care Administration. Publisher: Jones and Bartlett. ISBN-13: 9780763780494 Baker, Tim. (2005). The Medical Malpractice Myth. Publisher: University of Chicago Press. ISBN 0226036480 Kachalia A and Mello MM. (2011) New Directions in Medical Liability Reform. Publisher: Massachusetts Medical Society Boumil, Marcia Mobilia and Hattis, Paul A. (2011) . Medical liability in a nutshell. Publishers: West. ISBN 0314232931.   Read More