Month: October 2014

Three new studies have proven that laws limiting the amount which an injured patient can recover from the careless physician who hurt them  do not have their desired effects and  that those laws actually increase  physician errors.  Those studies show that putting a “cap” on the amount of damages that an injured patient can actually recover from their careless physician reduces the incentives to be careful.   Those studies also show that  these “tort reform” measures:

1.     actually increase  physician errors;
2.     do not result in any healthcare cost savings; and
3.     do not increase the number of physicians in the state.

The basic principle underlying the field of Economics is that people respond to incentives of any kind. If you want something to occur, setting up a system which rewards that behavior will make it occur more often. Punishing the behavior will make it occur less. It’s simple common sense, but it’s also proven time and again to be an accurate predictor of human behavior.  Society has many different examples.  Rob someone and you’ll go to jail.  Speed and you’ll get a ticket.  Work hard to help your employer’s earnings increase, and your stock options will increase in value.

The basic idea behind “tort reform” completely contradicts this obvious, commonsense principle. One of the most common methods of “reforming” the tort system is to limit, or “cap,” the amount that a careless person has to pay to the person that they injured, regardless of what the injury is.  These laws require the court to   completely ignore the jury’s decision and a rewrite the verdict to a certain preset, “one-size-fits-all” amount if the  independent and objective decision  of the jury is more than what the law’s limits.

Apart from the obvious unfairness of making the jury’s careful judgment meaningless, these laws also limit the financial exposure of the careless person, which is the exact opposite of what we should be doing. In other words, these laws decrease the incentive to be careful in the future. That is exactly the opposite of what we as a society should be doing.  It’s only by holding careless people fully and completely accountable to pay fair compensation to the person that they’ve injured that we give people incentives to be careful.

Since people respond to incentives, decreasing the “punishment”  for  physician carelessness predictably means the carelessness will increase. Physicians obviously don’t want to hurt their patients.  But in this time of physicians being completely overrun and having little time to devote to each patient due to being stretched very thin because of  health insurance company limits on how much they’ll pay and having to cram in as many patient visits as they can, it’s not surprising that reducing accountability results in more patient errors.  For more information on these studies, see below.

The following appeared on http://centerjd.org/content/fact-sheet-new-studies-show-caps-damages-ruin-health-care on October 29, 2014:

NEW STUDIES SHOW: “CAPS” ON DAMAGES RUIN HEALTH CARE
(Printable PDF)

It is now indisputable that “caps” on compensation in medical malpractice cases (so-called “tort reform”) harm not just injured patients and their families. They are also wrecking health care for everyone else. Three new studies by esteemed academics in the field of medical malpractice research confirm for the first time that “caps” lead to more medical errors, higher health care costs and no increase in patient care physicians.[1]

MORE MEDICAL ERRORS[2]

The authors examined five states that enacted caps during the last “hard” insurance market (2003 to 2005)[3] where standard Patient Safety Indicators (PSIs)[4] were also available for at least two years before caps passed (to allow for comparison). They then compared these data to other “control” states. They found “consistent evidence that patient safety generally falls” after caps are passed. Specifically:

“We find a gradual rise in rates for most PSIs after [caps were passed], consistent with a gradual relaxation of care, or failure to reinforce care standards over time.”

“The decline is widespread, and applies both to aspects of care that are relatively likely to lead to a malpractice suit (e.g., … foreign body left in during surgery), and aspects that are unlikely to do so (e.g., … central-line associated bloodstream infection).”

“The broad relaxation of care suggests that med mal liability provides ‘general deterrence’ – an incentive to be careful in general – in addition to any ‘specific deterrence’ it may provide for particular actions.…”

“We find evidence that reduced risk of med mal litigation, due to state adoption of damage caps, leads to higher rates of preventable adverse patient safety events in hospitals.”

HIGHER HEALTH CARE COSTS[5]

The authors examined health care spending trends in nine states that enacted caps during the last “hard” insurance market (2002 to 2005)[6] and compared these data to other “control” states. They found that “damage caps have no significant impact on Medicare Part A (hospital) spending, but lead to 4-5% higher Medicare Part B (physician) spending” [emphasis in the original]. The reasons may have to do with physicians practicing riskier medicine in “cap” states, such as performing “high-risk services or procedures,” which they avoid in states where the tort system’s “general deterrence” function (noted above) works properly. The authors note:

“Damage caps have long been seen by health policy researchers and policymakers as a way to control healthcare costs. We find, in contrast, no evidence that adoption of damage caps or other changes in med mal risk will reduce healthcare spending. Instead, we find evidence that states which adopted [caps] during the third wave of med mal reforms have higher post-cap Medicare Part B spending.…”

“[O]ne policy conclusion is straightforward: There is no evidence that limiting med mal lawsuits will bend the healthcare cost curve, except perhaps in the wrong direction. Policymakers seeking a way to address rising healthcare spending should look elsewhere.”

NO INCREASE IN PHYSICIANS[7]

The authors examined physician supply in nine states that enacted caps during the last “hard” insurance market (2002 to 2005)[8] and compared these data to other “control” states. They found “no evidence that cap adoption predicts an increase in total patient care physicians, in specialties that face high med mal risk (except plastic surgeons), or in rural physicians.” Specifically:

“[W]e find no evidence that the adoption of damage caps increased physician supply in nine new-cap states, relative to twenty no-cap states.”

“Consistent with this analysis, we also find no association between med mal claim rates and physician supply in state and county fixed effects regressions over 1995-2011.”

“Physician supply does not seem elastic to med mal risk. Thus, the states that want to attract more physicians should look elsewhere.”

NOTES

[1]Bernard S. Black, David A. Hyman and Myungho Paik, “Do Doctors Practice Defensive Medicine, Revisited,” Northwestern University Law & Economics Research Paper No. 13-20; Illinois Program in Law, Behavior and Social Science Paper No. LBSS14-21 (October 2014), http://ssrn.com/abstract=2110656; Bernard S. Black, David A. Hyman and Myungho Paik, “Does Medical Malpractice Reform Increase Physician Supply? Evidence from the Third Reform Wave,” Northwestern University Law & Economics Research Paper No. 14-11; University of Illinois Program in Law, Behavior and Social Science Research Paper No. LBSS 14-36 (July 2014), http://ssrn.com/abstract=2470370; Bernard S. Black and Zenon Zabinski, “The Deterrent Effect of Tort Law: Evidence from Medical Malpractice Reform,” Northwestern University Law & Economics Research Paper No. 13-09 (July 2014), http://ssrn.com/abstract=2161362.

[2]Bernard S. Black and Zenon Zabinski, “The Deterrent Effect of Tort Law: Evidence from Medical Malpractice Reform,” Northwestern University Law & Economics Research Paper No. 13-09 (July 2014), http://ssrn.com/abstract=2161362.

[3]Florida, Georgia, Illinois, South Carolina and Texas. Illinois’ and Georgia’s caps were found unconstitutional in 2010, but that is the last year examined by the authors and so had no impact on their results.

[4]PSIs are the “standard measures of often preventable adverse events, developed by the Agency for Healthcare Research and Quality (AHRQ).” They include operative and post-operative errors, infections, birth-related errors and cases at risk, like hospital-acquired pneumonia.

[5]Bernard S. Black, David A. Hyman and Myungho Paik, “Do Doctors Practice Defensive Medicine, Revisited,” Northwestern University Law & Economics Research Paper No. 13-20; Illinois Program in Law, Behavior and Social Science Paper No. LBSS14-21 (October 2014), http://ssrn.com/abstract=2110656.

[6]Florida, Georgia, Illinois, Mississippi, Nevada, Ohio, Oklahoma, South Carolina and Texas.

[7]Bernard S. Black, David A. Hyman and Myungho Paik, “Does Medical Malpractice Reform Increase Physician Supply? Evidence from the Third Reform Wave,” Northwestern University Law & Economics Research Paper No. 14-11; University of Illinois Program in Law, Behavior and Social Science Research Paper No. LBSS 14-36 (July 2014) http://ssrn.com/abstract=2470370.

[8]Florida, Georgia, Illinois, Mississippi, Nevada, Ohio, Oklahoma, South Carolina and Texas.
Fact Sheet: New Studies Show: “Caps” On Damages Ruin Health Care

Fact Sheet

Medical Malpractice

Has An Insurance Company Denied Your Claim Because The Policy Was Previously Canceled? If So, There Is A Significant Chance That You Still Have A Valid Claim Against The Insurance Company

Many times, an insurance company will deny a claim on the grounds that the company had supposedly previously canceled the insurance policy. While that may be true in some situations, many of those claims against the insurance company are actually valid because the insurance company did not properly follow the legal requirements in order for it to validly cancel a policy.

Missouri laws spell out exactly what an insurance company has to do in order to properly and validly cancel an insurance policy. The law, and court decisions interpreting and applying the law, specifically describe the steps that an insurance company has to go through to properly cancel a policy. Similarly, if the language in the policy itself specifically describes what the insurance company has to do to properly cancel policy, then the insurance company has to comply not only with Missouri law, but also with the policy requirements.

If the insurance company does not properly take all of these steps, then the policy has not been canceled, and the insurance company can be forced to pay any valid claims under the policy even after the supposed cancellation date.

The main requirement is that the policy cancellation notice has to say that the policy is canceled now. And most policy cancellation notices do not say that, but instead say that the policy will be canceled sometime in the future.

Why Would The Insurance Company Not Follow The Rules On Properly Canceling Policies?

So why would a sophisticated insurance company not properly follow the rules? Why would they send out an invalid notice of cancellation, knowing that they might still be on the hook for any claims?

The answer is simple: Money. Almost all policy cancellation notices are sent out because the insured hasn’t made their premium payment to the insurance company. In many of these situations, the insurance company intentionally disregards the legal requirements, because it wants the insured to still send in their premium payment, and they’re afraid  that if they send out the proper wording, that won’t happen. In order to send a proper valid cancellation notice under Missouri law, the insurance company has to essentially say:

“Your policy is now canceled.”

But insurance companies don’t want to do that, because if they said it that way, the policyholder would think it’s too late to send in a late payment, and would look elsewhere to buy a new insurance policy. So instead of wording it correctly, insurance companies typically send out notices saying something like:

“If we don’t receive your payment in the next 10 days, it will be canceled.”

Because a valid cancellation notice must say that the policy is canceled now, this type of wording is inadequate. If the insurance company uses this type of wording, it is not enough to properly cancel the policy.

What Happens If A Cancellation Is Invalid?

If an insurance company sends out an invalid cancellation notice, then as a general rule courts will disregard the cancellation notice and treat the policy as continuing in full force and effect until the end of the policy period. There are limits on how long the court will do that for, though they are typically taken into consideration on a case-by-case basis. An experienced attorney can help you analyze your particular situation. We are happy to help. Call Curran Law Firm at 417-823-7500 or visit our website at www.CurranLawFirm.com.

Who Has To Prove Whether The Policy Was Canceled?

The burden of proving that an insurance policy was canceled is on the person claiming that it was canceled, which is almost always the insurance company. See O’ Connor v. State Farm Mutual Automobile Insurance Company, 831 S.W.2d 748, 751 (Mo.App.S.D. 1992) citing Farrar v. Mayabb, 326 S.W.2d 337, 341 (Mo.App. 1959).

What Should I Do If My Claim Has Been Denied Due To A Policy Cancellation?

If your claim is been denied by an insurance company because it claims that policy was previously canceled, you should consult with a knowledgeable attorney experienced in dealing with insurance companies. We are happy to help. Call Curran Law Firm at 417-823-7500 or visit our website at www.CurranLawFirm.com.

 

 

Taking Away Rights Of Injured Patients To Sue Careless Doctors Does Not Reduce Medical Costs

Many states have laws which severely limit the rights of injured patients to sue physicians for malpractice. These laws typically say that if a trial is held and the jury finds that a doctor did provide substandard care to a patient and issues a damages verdict in favor of the patient, the judge is required to ignore the jury’s verdict and reduce the damages to a preset maximum amount. Think about that for a minute. These laws only apply to cases where a jury found that the doctor had actually acted carelessly. In other words, these laws don’t even apply to frivolous lawsuits, because if the jury made up of the general public finds that the doctor acted carelessly, then the lawsuit obviously isn’t frivolous.

The 7th Amendment to United States Constitution guarantees every citizen the right to a jury trial. The Missouri Constitution also guarantees every citizen the right to a jury trial. Many of these laws have been found to be unconstitutional because in fact they take away the right to a jury trial. A jury trial is meaningless if the judge is going to overrule the jury’s decision and reduce the verdict, which is what these laws require.

Many people who argue in favor of those laws claim that it’s necessary to limit verdicts because doing so will reduce medical costs, the theory being that without those limits doctors will be required to “practice defensive medicine” so as to protect themselves. The theory goes that because of the fear of lawsuits doctors will order unnecessary tests to use to defend themselves in case they get sued, driving up medical expenses. There has never been any evidence to support that position, but they have made that argument for many years anyway.

Today, the New England Journal of Medicine, the most prestigious medical journal in the United States, published an article completely disproving that theory and showing that these laws do not produce any significant reductions in medical expenses. The article is entitled “The Effect Of Malpractice Reform On Emergency Department Care.” The following summary of the article is quoted directly from the New England Journal of Medicine’s website as it exists today, October 16, 2014 (http://www.nejm.org/doi/full/10.1056/NEJMsa1313308?query=TOC&#Top):

“The Effect Of Malpractice Reform On Emergency Department Care

Daniel A. Waxman, M.D., Ph.D., Michael D. Greenberg, J.D., Ph.D., M. Susan Ridgely, J.D., Arthur L. Kellermann, M.D., M.P.H., and Paul Heaton, Ph.D.  N Engl J Med 2014; 371:1518-1525October 16, 2014DOI: 10.1056/NEJMsa1313308

Background

Many believe that fear of malpractice lawsuits drives physicians to order otherwise unnecessary care and that legal reforms could reduce such wasteful spending. Emergency physicians practice in an information-poor, resource-rich environment that may lend itself to costly defensive practice. Three states, Texas (in 2003), Georgia (in 2005), and South Carolina (in 2005), enacted legislation that changed the malpractice standard for emergency care to gross negligence. We investigated whether these substantial reforms changed practice.

Methods

Using a 5% random sample of Medicare fee-for-service beneficiaries, we identified all emergency department visits to hospitals in the three reform states and in neighboring (control) states from 1997 through 2011. Using a quasi-experimental design, we compared patient-level outcomes, before and after legislation, in reform states and control states. We controlled for characteristics of the patients, time-invariant hospital characteristics, and temporal trends. Outcomes were policy-attributable changes in the use of computed tomography (CT) or magnetic resonance imaging (MRI), per-visit emergency department charges, and the rate of hospital admissions.

Results

For eight of the nine state–outcome combinations tested, no policy-attributable reduction in the intensity of care was detected. We found no reduction in the rates of CT or MRI utilization or hospital admission in any of the three reform states and no reduction in charges in Texas or South Carolina. In Georgia, reform was associated with a 3.6% reduction (95% confidence interval, 0.9 to 6.2) in per-visit emergency department charges.

Conclusions

Legislation that substantially changed the malpractice standard for emergency physicians in three states had little effect on the intensity of practice, as measured by imaging rates, average charges, or hospital admission rates.”

As this study shows, these unconstitutional laws also don’t do anything to reduce medical expenses.   All laws overriding jury decisions should be eliminated, in accordance with the requirements of the United States Constitution.  Holding people accountable is the only way to get them to change their conduct, in order to protect all of us.