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The Fall of the Hippocratic Oath: Defensive Medicine, Medical Liability, and Healthcare Costs

By   /  April 1, 2005  /  6 Comments

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A recently reaffirmed 1974 law effectively protects privatized managed healthcare companies from civil lawsuits, including malpractice. The Employee Retirement Income Security Act (ERISA) allows managed healthcare companies to be sued only for compensatory damages. When a patient is subjected to unnecessary harm or abuse, the companies responsible for their well-being are not held accountable. Instead, the attending doctor bears the brunt of legal action, too often for unfounded claims or situations for which they were not responsible. A 1996 Harvard study by Torian Brennan further found a direct correlation between severity of injury and monetary reward in malpractice cases, with no correlation to actual negligence. This fact is evidence that doctors are presently subject to an unjust and distorted legal system.

With few statewide caps on payouts from malpractice lawsuits, the awards from these cases have risen. According to Jury Verdict Research, the average malpractice award in 2002 was $1,010,858, with 42% of plaintiffs winning their cases. The average award in 1997, just five years earlier, was $500,725. These large payouts have driven drastic hikes in malpractice insurance premiums and put many physicians out of business. In January of 2005, Family Medicine reported that malpractice insurance premiums rose 98.5% for family physicians in Florida in the past year alone. Similarly, a New England Journal of Medicine study found that the average cost for malpractice coverage per physician for OB-GYNs in New Jersey increased from $34,616 in 2000 to $78,818 in 2003. This represents a 128% increase in just four years. These excessive insurance premiums have forced many doctors to limit their services or abandon medicine all together, a trend that will eventually threaten Americans’ access to suitable healthcare.

In this atmosphere of blame and compensation, it is little wonder that many physicians have become more cautious in their methods of medical practice and entered the realm of defensive medicine. Perhaps the best example symptomatic of this state of affairs is obstetrics. Sometimes while a child is being delivered, it can become stuck in the birth canal for too long without oxygen. This deprivation of oxygen leads to fetal distress and ultimately to brain damage or death. Although there may be no blatant negligence, the delivering doctor is liable for the pain and suffering of the family involved if it can be established that any decision he made led to that outcome. The situation is further complicated by fetal heart monitoring technology that is dubious at best. If, however, the doctor orders a Caesarean section operation to avert the possibility of fetal distress, he is not held liable. As a result, the fear of future litigation has driven many obstetricians to prematurely and unnecessarily order Csections.

This defensive course of action is detrimental for a variety of reasons. First, such an operation subjects the mother and baby to unnecessary risks. Although the obstetrician may no longer be liable, there are inherent risks to any operation that could be otherwise avoided by a normal birth. In this circumstance, the physician has failed in his role as a doctor. Second, aside from letting the patient down, defensive medicine is a serious financial drain on the healthcare system. Every test and operation ordered on the basis of liability protection costs money. Unwarranted consultations, diagnostics, and in-patient treatment all drive up the cost of health care.

While a multitude of studies have been produced that argue the exact extent of this financial burden, all seem to agree that defensive medicine is a costly practice. According to the most recent Bush administration estimates, rising malpractice insurance premiums and defensive medicine cost Americans at least $28 billion a year. As a result of their legal position, however, the doctors involved see the professional cost of not acting in this manner as potentially much higher than the global effect on health costs. The practice of defensive medicine can be seen as a physician’s adaptation to his current litigious environment. Defensive medical practices are not just limited to obstetrics and surgery: Other examples include yielding to unjustified patient requests to avoid quarrels, ordering extreme numbers of tests to avoid blame for having missed an issue, and avoiding dangerous procedures against better judgment.

A tension exists between patient compensation and physician liability, leaving both parties dissatisfied. Given the present state of legal affairs, the situation is such that many doctors are being sued for malpractice. Many of these claims are invalid but still waste the time and money of the doctor being sued. Every minute spent in the courtroom is one less minute in the hospital potentially saving lives. Some of these lawsuits are legitimate, but distinguishing them from the rest can be difficult. The current jurybased system has proven itself biased and failed at the equitable dispensation of justice. Patients truly harmed by the improper actions of their doctor do deserve compensation.

However, the lack of restrictions on payouts has skyrocketed the sums awarded to patients in a system documented to be slanted in the patient’s favor. Juries are none too compassionate when it comes to dead babies, regardless of blame. These large awards drive up the cost of malpractice insurance, leaving many doctors unable to afford the cost of practicing medicine. Trauma and maternity units across the country have simply been closing, and life-saving specialists have been forced to quit medicine. Doctors who attempt to stay afloat by practicing defensive medicine are equally guilty of patient endangerment and raising healthcare costs. The American healthcare system is currently afflicted. In our ever more litigious society, the rise of managed healthcare giants shielded from legal action has effectively situated physicians on the front of legal liability. This precarious position has driven many doctors, particularly those in high-risk fields, to go on the defensive and protect themselves from lawsuits by altering their practice of medicine. To lower their risk of being sued for malpractice, these doctors order unnecessary tests and procedures so that any retrospective investigation does not find them at fault should something go wrong. This is the basis of defensive medicine, a scourge on the healthcare system that is a direct result of liability loopholes and increased litigation. The unequivocal concern, however, is the financial drain of these lawsuits and resultant defensive practices, which results in increased healthcare costs. This vicious Catch-22 of cause and effect may seem irresolvable, but recent attention has brought the issue to the forefront of national affairs.

Tort reform – fundamental change in the nature of medical liability – was a major issue in the 2004 election. It is evident that the current system is inadequate, having done little more than degrade the sacrosanct doctorpatient relationship. A major debate has raged over statewide and federal caps on malpractice suit awards, which would establish a glass ceiling on payouts and, in theory, lower malpractice premiums. Such systems have been attempted in states like Missouri, where a $350,000 cap on damages was instituted in 1986. A loophole in the wording of the law, however, allowed for doctors to be sued on multiple counts for the same offense, bringing payouts back into the millions. A similar $250,000 compensation cap was instituted in California in 1975 under the Medical Injury Compensation Reform Act (MICRA). MICRA is taken by some as a paradigm of tort reform and by others as its greatest failure. Former California Governor Jerry Brown, who signed the law, later stated that he would not recommend it for the nation because in the interlude he “witnessed yet another insurance crisis and found that insurance company avarice, not utilization of the legal system by injured consumers was responsible for excessive premiums.”

The success of this sort of tort reform will be based largely on its implementation. Alternative compensation systems have been proposed which involve review panels of doctors and lawyers that make decisions on malpractice issues, bypassing the court system altogether. Such systems hold the great advantage of lowering court fees and malpractice premiums while perhaps offering more equitable outcomes than the current judiciary system. Such an approach is the basis of the American Medical Association’s National Specialty Societies Medical Liability Project with the Alternative Dispute Resolution Model. These models, which use malpractice panels rather than trials, may be able to reimburse injured patients while reducing physician liability. Furthermore, alternative decision models have the potential to reduce the legal pressure at the root of defensive medicine.

While the diagnosis and prognosis are clear, the cure for defensive medical practices is not so lucid. The limits of fiscal argument and medical patience will soon be reached. Healthcare costs will rise too high or enough doctors will be forced from their occupation to awaken the public to this growing crisis in American health care. Attacking the ultimate cause of defensive medicine means reform of the current medical liability infrastructure. Defensive medicine, thus, is symptomatic of a diseased liability system.

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