PALM BEACH, FLA. – Tort reform significantly decreased surgical malpractice lawsuits by nearly 80% in one Texas academic medical center.
The legislation, passed in 2003, also significantly reduced legal costs and malpractice insurance premiums for individual surgeons, Dr. Ronald Stewart said at the annual meeting of the Southern Surgical Association. In 2002, malpractice insurance premiums were $10,000 per surgeon. By 2010, the premium had dropped to $2,700, and it is projected to be $2,000 per surgeon in 2011.
"Obviously this is a complicated and potentially controversial issue," Dr. Stewart said in an interview. "However, our study was aimed at a simple question: Did the risk of surgical lawsuit decrease following tort reform? There’s no question in my mind that the legislation was directly responsible for these changes" in the surgery department of the University of Texas Health Sciences Center, said Dr. Stewart, the department’s interim chair. "Limiting economic incentives really does decrease malpractice case load and cost."
In 2003, Proposition 12 placed a $750,000 cap on noneconomic damages in medical malpractice lawsuits and limited an individual physician’s liability to $250,000. "UTHSCSA physicians’ liability is capped at $100,000, I believe, under the provision of public servant," Dr. Stewart said.
He and his colleagues compared prevalence, incidence, and risk and cost in general surgery and reviewed the frequency of lawsuits in the entire department (10 divisions) from 1992 to 2010. They used data from two hospital databases. One records all surgical procedures since 1979, and the other contains information on all malpractice claims filed since 1976.
Liability cost was defined as any monetary award to a plaintiff, legal cost as the cost incurred defending the suits, and total litigation as the sum of those costs.
From July 1992 to June 2010, 98,513 surgical procedures were performed and 28 lawsuits were filed. Most (25) were filed from 1992 to 2003 (the prereform period). About half (13) were decided in favor of the plaintiff, and the remainder in favor of the surgeon. The liability cost of the suits was $5.56 million and the legal cost $1.6 million – for a total litigation bill of $7.16 million. The annualized cost was almost $600,000.
Of the three suits filed since 2004, one is still pending, and there were no plaintiff payouts in the other two, according to Dr. Stewart. Total legal costs of $3,345 translate into about $500 per year.
Besides frequency and cost, prevalence also significantly decreased, he said. Before tort reform, malpractice suit prevalence was 40/100,000 surgeons. After tort reform, it was 8/100,000, for a relative reduction of almost 80% (risk reduction, 0.21).
These changes led directly to the significant reductions in malpractice insurance premiums, which dropped by $8,000 per surgeon, Dr. Stewart said.
His cost analysis didn’t control for any confounding factors, such as improved disclosure, decreased errors, or quality improvement practices. "These factors may have been responsible for some decreased malpractice lawsuits, but it is very likely that tort reform was the primary driver for the observed decrease," he said.
The study did more than simply point out cost savings, said Dr. Benjamin Li, a discussant with Louisiana State University Health Sciences Center. "It does not even measure more indirect costs, such as the practice of defensive medicine, the cost of recruiting surgeons into a high-risk medical malpractice environment, and the loss of opportunity to correct systems errors due to the inhibition of open discussion of medical errors for fear of malpractice suits," he said.
Tort reform can improve the physician/patient relationship, Dr. Stewart said in an interview. "I believe a major problem of the tort system was that it fostered an adversarial relationship between surgeon and patient, which, when present, is directly counter to good patient care."
However, he noted, not everyone believes the law was – and remains – a good one. The Texas Trial Lawyers Association declined to comment on the issue, referring questions instead to Texas Watch, which defines itself as "a nonpartisan, advocacy organization working to improve consumer and insurance protections for Texas families ... providing a counter to wealthy special interest lobby efforts."
The decrease in lawsuits, plaintiff payouts, and malpractice premiums is no surprise to Alex Winslow, executive director of Texas Watch. "The question is what that really means," he said in an interview. "While insurance companies and physicians are shielded and make more money, patients continue to suffer the burden of crushing medical errors. This does not mean there are less medical errors; it just means that patients have no means to hold doctors accountable."