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Bar News - July 16, 2010


Opinion: Evidence Shows Tort Reform No Cure for Rising Health Costs

By:


Kevin F. Dugan
 

Holly B. Haines
In the current economy, rising healthcare costs are a concern to everyone: consumers, employers, insurers and medical care providers. With a stated purpose of providing "increased access to more affordable healthcare and health insurance in our state" by "lessen[ing] indirect costs that drive up health care;" SB468 was introduced to the General Court in January 2010 as an act relative to tort reform. The bill was referred to the Senate Commerce, Labor and Consumer Protection Committee, which held a hearing on March 16, 2010. After the hearing, on March 18, 2010, the Committee reported that the bill was inexpedient to legislate.

Much of the data presented at the hearing came from national and state reports on patient safety initiatives and annual quality care and disparity reports, which conclude that increasing patient safety and eliminating preventable healthcare errors are the keys to reducing healthcare costs. Other data published by the National Practitioner Data Bank (NPDB) show that medical malpractice payments fell in 2009 to the lowest number of payments since 1999. In fact, the analysis of the NPDB data published in Healthcare Finance News on March 10, 2010, showed that healthcare spending rose 83 percent between 2000-2009, while medical malpractice payments fell by 8 percent during the same time period.

Controlling and reducing healthcare costs is a laudable goal, which everyone should be in favor of regardless of political affiliation. When introducing SB468, the act relative to tort reform, however, the intent of the bill was stated as being a bill to bring rationality to the tort system, not to reduce healthcare costs or improve the quality of care being provided to New Hampshire citizens. The provisions of the bill were targeted specifically to limit the compensation injured citizens could be awarded in civil lawsuits for their injuries and included capping compensation for non-economic damages such as pain and suffering, physical impairment or disfigurement; providing for periodic payments of damages for future medical care; limiting contingency fees for litigation; and, limiting liability for providers of emergency care and treatment. As with all legislation, the ends must justify the means. In this case, the end goal stated in the legislation was to reduce the costs of healthcare and increase access to more affordable healthcare. The means in the provisions of the legislation do not achieve this end goal, because they were aimed at tort reform and not healthcare reform.

A tort is generally defined by Black’s Law Dictionary (7th Ed.) as a civil wrong for which a remedy may be obtained. Part I, Article 14 of the New Hampshire Constitution recognizes the common law of torts by guaranteeing our citizens a legal right to a remedy for all injuries they receive to their person, property or character. Tort reform is defined by Black’s as a movement to reduce the amount of tort litigation usually involving legislation that restricts tort remedies or that caps damage awards. The tort reform debate has been ongoing in New Hampshire for decades, generally in the medical malpractice arena and annually pits doctors against lawyers on the floor of the legislature. Advocates for tort reform in this arena argue that it will reduce health-care costs and lower insurance premiums. Opponents of tort reform in this arena argue that it denies injured citizens the recovery they deserve for their injuries. What no one disputes is that the most effective way to reduce medical injury claims is to reduce the incidence of medical injuries. In order to do this, the means must focus on reducing preventable medical injuries and improving patient safety, not limiting the constitutional rights to remedies guaranteed to New Hampshire citizens.

The results of recent studies conducted by the Center for Medicare Services (CMS), the US Department of Health and Human Services Agency for Healthcare Research and Quality (AHRQ), the National Quality Forum (NQF), HealthGrades, and the Rand Corp. suggest that most preventable patient injuries are the result of failures of complex healthcare systems. Identifying the root cause of the systemic failures through methods such as adverse event reporting systems is the most important tool to protect patients, to reduce preventable injuries, and to reduce healthcare costs. In 2006, working with the NQF, CMS began implementing its adverse-event reporting system to help reduce and eliminate the occurrence of "never events," which are those serious and costly healthcare errors that should never happen in the provision of medical services. The Medicare program found that these "never events" cause serious injury or death to Medicare beneficiaries and result in significantly increased costs to the Medicare system to treat the results of the errors.

"Never events," which are coded as medical misadventures by the ICD-9, include, but are not limited to, surgery on the wrong body part, foreign bodies left inside patients after surgery, mismatched blood transfusions, major medication errors, preventable post-operative deaths, and preventable hospital-acquired infections. As part of its Medicare Modernization and Deficit Reduction Act, CMS is working to reduce or eliminate payments to hospitals and medical providers for "never events" to make hospitals take responsibility for these events and to prevent them from occurring in the future. The first step in this process began in FY 2008 when CMS reduced payments to providers for treatment of hospital-acquired infections. The summary from the NQF is that patient mortality from medical misadventures is high. Most medical misadventures are preventable and are "never events." The costs to society and the health care system for these events are significant because they generally result in death, permanent disability, prolonged hospital admissions, and significant follow-up care.

According to the March 2010 HealthGrades Seventh Annual Patient Safety in American Hospitals Study, which is based on adverse events reported by hospitals to CMS for Medicare beneficiaries, there were almost one million adverse patient safety events reported for more than 900,000 hospitalized Medicare beneficiaries between 2006-2008, which resulted in almost 100,000 patient deaths and $8.9 billion in excess healthcare costs. A recent study of preventable patient injuries in California from the Rand Corp., a nonprofit research organization, found a direct link between reductions in medical malpractice claims when preventable patient injuries were reduced. These findings were based on reported adverse hospital events in that state from 2000-2005 and medical malpractice filings during the same time period. This link between patient safety and medical malpractice claims makes clear that the focus should not be on tort reform; it should be on healthcare reform to fix the system, reduce system costs and improve patient care.

Jim Guest, the president of Consumer Reports, recently observed that when one passenger jet crashes, killing all of the people on board, all involved government and private industries immediately spring into action to determine the cause of the crash and how to prevent such a catastrophe from happening again. At the same time, more than 100,000 people per year are dying from preventable healthcare errors and hospital infections, which is the equivalent of a jumbo passenger jet crashing every other day, yet limited efforts are being taken to prevent these unnecessary deaths from occurring. If the ends are to justify the means, and the end goal is to reduce healthcare costs, the means should be aimed at doing so by reducing preventable patient injuries, deaths and healthcare errors, and not restricting the constitutional rights of New Hampshire citizens to be compensated for their injuries.

The national data from all reporting agencies is consistent and clear. Reducing preventable healthcare errors is the quickest way to reduce the overwhelming costs of health-care. It is healthcare reform and not tort reform that is needed to fix the system, and this is why SB468 was inexpedient to legislate.

Kevin F. Dugan and Holly B. Haines are attorneys with the firm Abramson Brown & Dugan in Manchester.

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