Imagine having a job you love. Imagine it’s a job you spent years preparing for and took on a huge student debt just so you could fulfill your dream of having this particular career. Now imagine that each and every day you live with the stress that one false move, action or misinterpreted word could risk everything you own and your ability to continue to do what you love. That’s the occupational hazard of being a Doctor. Law enforcement professionals and firefighters face jeopardy that is obvious and acknowledged by society—and even honored.  But the Physician is often not viewed with much sympathy.

For Patients who are unhappy with their medical treatment for a variety of reasons from the benign (having unreasonable expectations about the progress and extent of recovery) to the malignant (“wrong” diagnosis, medical device failure or pharmaceutical complications) the focal point of Patient anger and legal recourse is first and foremost the Physician, always the Physician. A lawsuit is one of the most emotionally traumatic experiences a Doctor can experience. In fact, a lawsuit, even a frivolous one, has driven many fine Physicians from the practice of Medicine.

It’s easy to see why malpractice lawsuits have become so prevalent. The broad category of “medical error” is the third leading cause of death in America. Only heart disease and cancer kill more people each year. And the Physician, as the steward of individual medical treatment, is the poster child for blame by the public, even when the legal grievance is beyond the control of the Physician.  On the other hand, people have been harmed in various and sometimes deadly ways as they have navigated the medical industry. Aren’t they entitled to be compensated for their unquestionable damages? No one would seriously say they aren’t.

So, it all comes down to money and quality of care. The question, in a nutshell, is how do we reform the system in just ways that cut costs and relieve unnecessary burdens on Doctors, but allows legitimate claims to go forward and be compensated fairly.

Being A Doctor Comes At A High Price

First, let’s examine the burden on the Physician. Most Physicians begin their career in a financial hole with anywhere from $200,000 to half a million in student debt. And they have a lot of catching up to do with their peers for the years they have missed advancing in the workplace while still in school.  All too soon the cold reality of the cost of doing business hits them as they establish their medical practice.

Welcome to the world of malpractice insurance. The cost of it is crushing and varies depending on the chosen specialty. For instance, on average, medical malpractice insurance can cost internal Medicine providers anywhere from $50,000 to as much as $150,000 per year, according to a 2017 study reported by Capson Physicians Insurance Company. On the other hand, on average, medical malpractice insurance can cost OB/GYN providers anywhere from $85,000 to as much as $200,000 per year. That’s because specialists are more likely than primary care Physicians to be named in a malpractice lawsuit.  Surgeons and OB/GYNs lead all other specialties in being sued. As costly as it is, the insurance is vital to Physicians. Most can expect to face at least one malpractice claim over a 30-year career. The insurance companies assert that the rates are so high because the payouts for a successful suit is staggering.

Payouts Reach New Highs

LeverageRx published its 2019 Medical Malpractice Payout Report earlier this year revealing that last year, total malpractice payouts in the United States reached $4.03 billion, that’s billion with a ‘B.  It represents a 2.9% increase from the previous year. While the number of payouts decreased 1.5%, the average malpractice payment grew 4.4% in 2018 from the previous year. It was the second consecutive year that overall malpractice payouts have increased.

And where you practice makes a difference. New York continues to lead the nation in total malpractice payouts and highest per capita, with over $685 million in 2018, an increase of 11.3% from the prior year. Meanwhile, Vermont experienced a 486% increase in total payout amount, growing from $1,536,500 in 2017 to $9,006,250 in 2018.

Again, according to the LeverageRX report, females accounted for nearly 56% of total payouts in 2018, whereas males accounted for approximately 44%. The 50-59 Patient age group saw the highest payout count and payout amount, totaling 2,307 cases for $762,599,700. As for how malpractice payouts were paid, settlements accounted for 96% of all payments in 2018. And this is even more frustrating and demoralizing for Physicians who believe they have done nothing wrong and must accept the insurer’s decision to settle their case.

Defensive Medicine Complicates The Issue

While the debate on tort reform to drive down the cost of malpractice insurance and health care continues to fail to reach a consensus among legislators, Doctors and hospitals are engaging in a practice called defensive Medicine to preempt lawsuits. But it is arguably having the opposite effect on costs.  According to the white paper “Reducing Cost and Waste in American Medicine: A Physician-Led Roadmap to Patient-Centered Medical Care,” presented earlier this year, “Defensive medicine is a rarely discussed, but significant, driver of skyrocketing healthcare costs. All too often, physicians order tests they do not think will likely be helpful, but they do so guard against a possible lawsuit, and to demonstrate that they ‘have done everything.’ During hearings at the Senate HELP committee in 2018, Dr. Brent James of the National Academy of Medicine stated that at least 30% and as much as 50% of all money spent on health care may be unnecessary.”

So that brings us back to the thorny issue of tort reform. On the surface, anything that leads to capping awards for successful medical malpractice lawsuits would seem to drive down costs by eliminating the need for defensive Medicine and lower malpractice insurance premiums because of lower payouts by insurance companies. Putting aside for the moment the argument that it penalizes those who legitimately need more compensation than the cap allows for legitimate claims, tort reform in theory seems like welcome relief for beleaguered Physicians. It plays into the assertion by insurance companies that premiums are so high because the payouts for a successful suit is staggering. But it’s complicated.

A Law And Medical Expert Weighs In

Dr. Sarah Diekman, founder, activist and editor-in-chief of JusticeInMedicine.com received her Doctor of Medicine from Indiana University and is in her final year of law school. As such, she brings a unique and important perspective to this topic. In an exclusive interview Dr. Diekman shares her surprising views with Physician’s Outlook.

“Tort reforms leads to Doctors working more hours and seeing more Patients. I think the number one reason that Doctors work too much is because of tort reform. That being said, I agree 100% with the litigation process being traumatizing to Doctors. I can’t even count the number of times that a Doctor has shared with me their lasting trauma from being sued,” Dr. Diekman said.

What leads her to this conclusion is what she has observed when tort reform has been enacted. “I worked in a state that had an absolute cap on medical malpractice damages and even more protection for teaching hospitals. The absolute cap was overturned a couple of years ago by the state Supreme Court based on two legal principles that boiled down to: the insurance companies were keeping all the extra money and the savings were not getting passed onto Doctors.” The process lacked so much transparency that as Dr. Diekman noted, “Most Doctors in the state were saying we should pass tort reform when in fact we already had it!”

The result of this so-called reform creates different problems for Physicians. As Dr. Diekman explained, “The Doctors pay the same amount of malpractice premiums while the insurance companies pocket the extra money. Then the administrators increase the RVU demands [the compensation based on how much work is required to treat a Patient] and Patient loads on Physicians. The administrators know that they won’t be sued because of the tort cap, so they figure it is time to see more Patients and make more money.”

Like any of the best-intentioned actions taken to resolve problems, there are always those who will twist things to their advantage and game the system. “The origin of the word tort means twisted,” Dr. Diekman said.  “Torts were created to protect against the careless and twisted side of human nature. I believe that the vast majority of Doctors are ethical and will practice Medicine to the best of their abilities no matter what. However, I don’t believe the same of hospital executives. I believe that most c-suites [corporate officers and directors offices] are driven by profit and the only thing that keeps them from over-extending Physician workloads and Patient volumes is the fear of being sued.”

Dr. Diekman believes that there are ways to ensure fairness for Patient plaintiffs while protecting Physicians from having their careers and lives upended by high malpractice judgments and premiums. It starts with using a precise scalpel rather than a butcher knife to the reform process. She explained, “One thing that most Doctors fear is the bad outcome suits in cases where a Patient got really unlucky, but a Doctor did not fall below a standard of care (which is supposed to be the only way that they can be sued in negligence/malpractice). I think we see jury verdicts for plaintiffs in these cases because society really hungers for a safety net to protect from profoundly bad luck, but this needs to be addressed directly instead of mixing it up with medical malpractice. I think that an insurance plan to protect against no fault bad results would protect a lot of Physicians. This is not currently done in any state that I know of.”

Health Care Industry, Heal Thyself

Finally, Dr. Diekman believes that the medical industry should do a better job of policing itself, but not with the kind of board or reviewers that can be compromised. She suggests, “We have seen different models of boards and reviewers that serve as gate keepers to lawsuits in different states. Such a panel is capable of corruption. It also has the potential to serve its highest purpose. I think that one way to keep these boards/panels/tribunals honest is to blind the names of the submissions and mix in cases from Doctors who are claiming they are being retaliated against for asserting their legal rights or rights with the ACGME [The Accreditation Council for Graduate Medical Education, the body responsible for accrediting the majority of graduate medical training programs for Physicians in the United States]. My thought is that if a board would not choose to move forward with a malpractice case against an attending Physician, they should not be able to fire a resident or whistleblower over it. It could serve as a much independent review for Doctors who are being blacklisted and add peer pressure to the board to consider that some Doctors need to be sued.”

To be clear, Dr. Diekman strongly supports emotional and logistical support for Physicians who are involved in malpractice suits. “In law school, we talk a lot more about legal malpractice than in medical school. I think there is a lack of understanding of the process and when someone is in it, it is absolutely earth shattering,” she explained. “As a community, I think we need anonymous support networks, possibly like the AA model. Additionally, we should push for federal legislation to make sure such networks would be in compliance with HIPPA. Doctors need understanding and support from their own community while going through the process.”