Running Head: POLICY BRIEF 3

Policy Brief #3 Carol Thelen The Catholic University of America School of Nursing

POLICY BRIEF #3 Executive summary High quality, accountable, affordable health care is a basic need in society. An important mechanism to ensure accountability, and indirectly, quality, is the availability of a system of redress for when injury, otherwise known as tort, has occurred in health care. In Maryland,

malpractice lawsuits are the mechanism to discern whether injury has occurred, who is responsible for causing the injury, and who is responsible for compensating for the injury. In Maryland, this form of common law has been modified in a few respects by legislation to comprise the current tort resolution system. It is an important mechanism to help assure accountable quality, and to resolve the sequelae of specific medical errors. However, health care affordability may be impinged by the tort system. Benefits and costs of malpractice suits may especially affect primary care for our citizens across the State through several mechanisms, including possible flight of practitioners. Our citizens using primary care may also be particularly affected by the effects of the malpractice tort system on practices led by advance practice registered nurses (APRNs), who provide care for an increasing proportion of the people of the U.S., often at a cost saving compared to physicians and often in communities or populations with limited access to providers. Earlier Efforts to Address the Problem Marylands statutory changes to civil law represents attempts to balance cost with retention of a functional system to compensate injuries. Other efforts to reform the tort system in other jurisdictions led to mixed and ambiguous results. More strikingly different alternatives to a juried tort system include the institution of specialized health courts; the use of arbitration in lieu of courts, and no-fault systems such as birth injury compensation in Virginia.

POLICY BRIEF #3 Scope and Severity of the Problem The Problem for Individuals and Society High quality, accountable, affordable health care is a basic need in society. The current

Maryland tort resolution system is an important mechanism to help assure accountable quality, and to resolve the sequelae of specific errors. The current systems resolution of malpractice claims can benefit our citizens but it also incurs costs to individuals and society. Benefits and costs of malpractice suits affect primary care for our citizens across the State through several mechanisms. Our citizens using primary care may be particularly affected by the effects of the malpractice tort system on APRN-led practices. Effects may differ in the short and long terms. The Main Reasons Alternate Policies Should be Considered Recent increases in premiums for malpractice insurance, concurrent with increased public debate concerning health care access and costs, have led some observers to proclaim the existence of a tort reform crisis. The potential for slowing the rise of health care costs makes it imperative to consider improving the current system. The need to consider new options may be particularly acute in light of the expected deficiencies in access to primary care (AAMC, 2011). Additionally, a growing awareness of deficiencies in healthcare safety and quality (IOM, 2001) make it clear that safeguards must be incorporated. We need to head off true crises with a solution to maintain safety, quality, accountability at acceptable costs. Analytic Approach The analytic approach to determine the best policy will be to consider evidence about costs and benefits of two or more options. Evidence may be derived from comparing different tort systems, analyzing pilot studies, and accepting analogy as an appropriate lens to preview future or expected results.

POLICY BRIEF #3 Nature of the Problem

Maryland citizens may experience increased costs in primary care due to malpractice torts. Furthermore, malpractice torts may affect the costs and availability of primary care provided by APRNs. The costs may be quantifiably economic, such as the cost of corrective procedures or the costs of lost worker productivity, but in a broader perspective costs include difficult-to-measure opportunity costs and social costs. For example, opportunity costs may include lost health care access; social costs may include decreased trust, or an offended sense of fairness. Lawsuits are one option among several for discerning and resolving claims of medical malpractice. In Maryland, suit is the historic and present mechanism to resolve claims. In a suit, a court considers the claim of an injured party against the actions of a defendant, discerning the validity of the claim and to holding a negligent party responsible for compensation. The problem at present is that some features of the tort system are believed to cause unnecessary or unacceptable costs, such as high premiums for malpractice insurance, flight of providers from the market, or decreased access to health care for high risk patients. These possible effects of the suit system, and others, have resulted in legislated changes to tort systems in many U.S. jurisdictions. Recently tort reform has been subject to renewed debate nationwide. Voters sense of fairness, regarding both the claimant and the defendant, has been a key element of recent public debate concerning malpractice tort reform (McClellan, 2006). Some observers, noting the apparently irreconcilable opinions of voters, clinicians, and patients, have gone as far as describing tort reform as a public crisis (Peterson, 2006). In particular, patients cared for by Advance Practice Registered Nurses (APRNs), or potentially cared for by those providers may see changes in availability and cost of care.

POLICY BRIEF #3 Who are the Stakeholders? Concerning malpractice tort reforms effects on primary care and APRN-led practices in

Maryland, the most important stakeholder is the patient. Other priority stakeholders in descending order are: Maryland Association for Justice, the Nurse Practitioner Association of Maryland (NPAM), the Maryland Academy of Advanced Practice Clinicians, Med Chi, the Maryland Nurses Association (MNA), the state Medicaid administration, the Board of Nursing, and the Board of Physicians, and consumer/patient advocate organizations. See Table A in the Appendix for additional stakeholder analysis. What are the Goals and Objectives for the Solution? A potential successful solution will yield the outcomes of stable or improved health of Maryland citizens while balancing health effects with cost effects. The aims of safe, effective, patient-centered, timely, efficient, and equitable care (IOM, 2001), will be enhanced. What are the Potential Solutions? A potential solution for tort reform is to stabilize medical malpractice tort reform in Maryland at the current legislative status, with no additional constraints on the evolution of common law. Alternately, propose a revision of Maryland statute modeled on the Texas reform of 2003. How can the Effectiveness of the Solution be Measured? Measures of effectiveness of tort reform should be measured in both the short and long range. They include the criteria: (a) the number of citizens who have access to primary care, (b) cost of primary care per citizen, (c) cost of health care per citizen, (d) health of citizens, (e) decrease in medical errors, (f) effectiveness of identifying, correcting, and compensating for medical errors.

POLICY BRIEF #3 Proposed Policy Options What are the Options? Allow the law to remain in its current status. Alternately, the pass a bill to revise the law to

include the provisions of the malpractice tort reform adopted in Texas in 2003. Key features of current Maryland law and Texas law follow; additional features are in Appendix B. Feature Joint and Several Liability Summary of Key Options to Revise Malpractice Tort Law Current Maryland Law Post-2003 Texas Law Joint defendants are jointly and Each defendant is liable only for that severally liable; each must assume portion of the claimant's damages that is and bear the responsibility for the equal to his percentage of responsibility; misconduct of all. settling defendants and responsible third parties are considered when calculating that percentage. A joint defendant who pays more A defendant who pays more than his than his pro rata share has a right of share of a judgment has a right of contribution against other joint contribution against other defendants defendants who have not paid their who have paid less than their pro rata share. percentages. Exception: settling defendant cannot be compelled to pay contribution and has no right to contribution unless he is vicariously liable for another settling defendant. Recoverable non-economic Non-economic damages capped at (including wrongful death) capped $250,000 from all doctors and other at $500,000 plus $15,000 for each individuals. Non-economic damages year after 1995. Non-economic capped at $250,000 per institution, for a damages include pain and suffering, total of $500,000 from all institutions. inconvenience, physical Wrongful death (economic, nonimpairment, disfigurement, loss of economic, and punitive) capped at consortium, and other non$500,000 adjusted annually for inflation pecuniary damages, but not punitive since 1997, plus the cost of any damages. The damage cap applies necessary medical or custodial care. Cap to each "direct victim" of the tort applies to the total recovery, not and all claiming injury by or separately to each defendant. through him. Exemplary damages capped at the larger of the following: (a) noneconomic damages capped at $750,000 plus two times economic damages, or (b) $200,000. Exception: certain types of intentional criminal conduct.

Contribution

Damage Caps

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Summary of Key Options to Revise Malpractice Tort Law Feature Current Maryland Law Post-2003 Texas Law Statutes of File within 5 years after injury / 3 File within 2 years after injury, Limitations years after injury discovery / 3 years completion of treatment or after wrongful death. hospitalization, including health care Exception: for minors clock begins liability claims for death. Exceptions: (a) to run at age 11 for minors, at any time until age twenty; (b) possibly 10 years for claimants who did not have a reasonable opportunity to discover the wrong and bring suit (untested). Contributory Any negligence by a claimant Claimant's action is barred if his or will bar his recovery completely. "percentage of responsibility" is greater Comparative than 50 percent, and if less than 50 Negligence percent or less, the claimant's recovery is diminished in proportion to this percentage. [does not apply to claims for exemplary (punitive) damages] Vicarious A hospital may be held A hospital may be held responsible for Liability responsible for negligent acts of negligent acts of independentlyindependently- contracted contracted physicians if the claimant physicians if the claimant reasonably believed the physician to be reasonably believed the physician to an agent of the hospital, based on the be an agent of the hospital. hospital or the physicians actions. Expert Claimant must file a certificate Claimant must provide expert reports Testimony from a qualified expert that the addressing liability and causation, within standard of care was violated and 120 days of filing the malpractice claim, caused the injury, within 90 days of or the court must with prejudice dismiss filing the malpractice claim. the case and award reasonable attorney fees. (McCullough, Campbell, & Lane, 1998; McCullough, Campbell, & Lane, 2007) How Would the Options Solve the Problem? If legislation were enacted in accord with the Texas tort reforms, costs to insurers are likely to be reduced. The decreased costs may be reflected in decreased premiums to providers, and in turn may be reflected in decreased costs to patients. What Externalities Would be Connected to Each Alternative? Constraints on suits may decrease the number of malpractice suits, and decrease the stress on providers, possibly resulting in decreased provider flight, or even increased provider availability

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(Mehlman, 2006). However, in light of expected increased production of new APRNs, increases in provider availability, especially to underserved populations traditionally served by APRNs, the effect may be nil. Decreased numbers of suits may also result in decreased accountability and quality, as well as decreases in legitimate compensation to injured parties. What Constraints are Likely and What is the Political Feasibility of Each Alternative? Physicians groups may favor Texas 2003-style tort reform as it could be perceived as reducing malpractice burdens. Attorneys groups and patient advocate groups may vigorously oppose tort reform (Center for Justice and Democracy, 2011). Some citizens favor Texas tort reform as they perceive lawsuits unfair to providers and placing an expensive burden on society. Others may resist that style of tort reform as they perceive the health of individuals to be threatened by the health care system and unfair to individual patients.

POLICY BRIEF #3 Policy Recommendations Criteria for Recommending the Preferred Alternative

Criteria to determine the best policy for possible tort reform, related to primary care and APRN practice will include measurements of (a) number of citizens who have access to primary care, (b) cost of primary care per citizen, (c) cost of health care per citizen, (d) health of citizens, (e) decrease in medical errors, (f) availability of means to identify and correct/compensate for medical errors which have occurred. The evidence that tort reform has resulted in improvements to the criteria is ambiguous at best, therefore the recommended alternative is to not adopt tort reform in the style of Texas 2003 resolutions. For example, the U.S. Government Accounting Office could not determine the extent to which differences in premiums and claims payments across states were caused by tort reform laws or other factors that influence such differences (USGAO, 2003), primarily because of limited available data. Evidence by comparing U.S. states indicates that premiums for malpractice insurance are lower when tort liability is restricted, but even large savings in premiums can have only a small direct effect on health care spending because they amount to less than 2 percent of that spending (Beider, 2004). Beiders Congressional Budget Office issue summary also describes how other possible effects of limiting tort liability potentially could save money, but have very little concrete evidence of savings, including the effects of reducing defensive medicine, prevention of widespread lack of health care access, or conversely, even effects on increasing medical injuries (Beider, 2004). Description of Preferred Alternative The preferred alternative is to take no action, therefore, it is perhaps best described by what it is not. The non-preferred alternative includes reducing statutes of limitations, increasing recovery

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for negligent claimants, making liability proportional among defendants, decreasing damage caps, increasing immunities for government entities, and increasing pretrial mediation. Implementation Strategy The legislature is recommended to consult priority stakeholders to outline the intention to retain the current course of evolving common law, in lieu of strong evidence which may be presented by the stakeholders that further tort reform in Maryland will yield increased health of her citizens at reasonable costs. Limitations and Possible Unanticipated Outcomes If physician flight from primary care occurs as has been threatened, APRNs may enter primary care in greater numbers. Monitoring and Evaluating Policies To evaluate trends in health care quality and costs, the following could be monitored: (a) the number of citizens who have accessed to primary care in Maryland per year; (b) the cost of primary care and (c) the cost of total health care per citizen; (d) key indicators of citizen health, such as infant birth weight, new incidence of key infectious diseases, new incidence of serious chronic illness, and death rates, among other indicators; (e) decrease in medical errors, (f) effectiveness the system identifying, correcting, and compensating for medical errors perhaps by comparing rates of iatrogenic injury to rates of compensation.

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POLICY BRIEF #3 Appendix A Stakeholders Name Level of PolicyMaking Authority 1 to 5 Low to High

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Role in Policy Process where appropriate

BeneficiaryPolicy

Provider/Group

Legislator

Regulator

State governor State delegates and senators Maryland Association for Justice MedChi, The Maryland State Medical Society Private medical insurers Medicare administration Medicaid administration Individual patients: Medicaid Individual patients: non-Medicaid AANP ACNP Pharmaceutical companies Medical device companies Outpatient surgical organizations Medical rehab organizations Long term care organizations Patient advocacy organizations (inc. AARP, RWJ, NAS/IOM) Individual APRNs AMA State Board of Nursing State Board of Physicians Nurse Practitioner Assoc. of Maryland Maryland Academy of Advanced Practice Clinicians Maryland Hospital Association Maryland Nurses Association Home care organizations State Dept. of Health Federation of State Medical Boards

5 3 1 1 2 2 1 1 1 1 1 1 1 1 1 1 1 1 3 2 1 1 1 1 1 3 2

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Other

POLICY BRIEF #3 Name Level of PolicyMaking Authority 1 to 5 Low to High

12 Role in Policy Process where appropriate

BeneficiaryPolicy

Provider/Group

Legislator

Regulator

Individual physicians

12

Other

POLICY BRIEF #3 Appendix B Additional Features of Maryland and Texas Malpractice Law

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Summary of Additional Features of Maryland and Texas Malpractice Law Feature Current Maryland Law Post-2003 Texas Law Periodic Courts and arbitration panels If future damages are at least Payments permitted to order that future $100,000, the court must order periodic damages be paid in the form of payment of future medical costs if any periodic payments, subject to party requests it, and may order periodic adequate security. Upon the death payment of other future damages on of a claimant receiving periodic request as well. Future payments may be payments, the unpaid balance for funded by an annuity contract. Payments future medical expenses reverts to for future loss of earnings continue after the defendant. a recipient's death, but other payments terminate. Collateral Evidence of the claimant's Claimant's recovery cannot be reduced Source Rule receipt of payments from collateral by benefits paid from a source other than sources may not be admitted to the defendant, such as health insurance. reduce his damages. Pre-Judgment No recognition of pre-judgment Pre-judgment interest is recoverable in Interest interest on tort claims for personal personal injury and wrongful death cases injury. at the same rate as post-judgment interest, between 5 and 15 percent, without compounding, beginning the earlier of the 180th day after written notice of a claim or the date a lawsuit is filed. No prejudgment interest on future damages or exemplary damages. Patient No patient compensation fund or No patient compensation fund or Compensation program of state-sponsored program of state-sponsored liability Funds liability insurance for physicians. insurance for physicians.

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Summary of Additional Features of Maryland and Texas Malpractice Law Feature Current Maryland Law Post-2003 Texas Law Immunities State has waived sovereign A unit of government is liable for immunity $100,000 per claim. personal injury or death caused by the However, immunity applies with negligence of an employee acting within respect to punitive damages and his scope of employment if it is caused pre-judgment interest. Claimant by a condition or use of tangible must provide written notice of his personal or real property. Thus, giving claim within one year of the injury. the wrong medication uses tangible If the claim is denied, a lawsuit personal property, and therefore must be filed within three years actionable, but failing to give the right after the cause of action arises or medication is not the claim is barred. Damages are capped against units of Liability of any local government: $250,000 for each person government capped at $200,000 and $500,000 for each single occurrence per claim and $500,000 per in claims against state, municipality, or occurrence. Local governments emergency service organization; immune from liability for punitive $100,000 for each person and $300,000 damages. for each occurrence against other units Charitable hospitals carrying of local government. liability insurance not less than The state and its political subdivisions $100,000 are not liable for are immune from liability for punitive damages above the limits of damages. coverage. However, that immunity does not extend to the employees of charitable hospitals. Statutory Cap When attorneys' fees are in No limit on the amount an attorney on Attorneys' dispute, the claimed fees must first may recover in fees in a medical Fees be approved by the arbitration malpractice action. panel or court Arbitration A State arbitration panel is An arbitrator or screening panel is not available to determine liability of required, but counties may adopt the defendant(s) and to itemize and alternative dispute resolution systems, apportion damages. Any party may and pretrial mediation is routine in many reject the panel's findings, but Texas venues. Legislated standards are those findings are admissible and used for mediation, mini-trials, presumed correct in any moderated settlement conferences, subsequent court proceedings, summary jury trials, and arbitration. unless vacated by the court. If a A health care provider can not require subsequent verdict is not more or request that a patient sign an favorable to the rejecting party, the agreement to arbitrate liability unless the rejecting party is liable to the other provider uses a prescribed form for costs. requiring the signature of the patient's attorney (McCullough, Campbell, & Lane, 1998; McCullough, Campbell, & Lane, 2007)

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POLICY BRIEF #3 Resources

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American Academy of Nurse Practitioners (AANP). (2011a). Nurse practitioners in primary care fact sheet. Retrieved from http://www.aanp.org/NR/rdonlyres/9AF1A29F-5C82-415198CB-22D1F20A9BD9/0/NPsInPrimaryCare324.pdf Association of American Medical Colleges (AAMC). (2011, August). Recent studies and reports on physician shortages in the U.S. Retrieved from https://www.aamc.org/download/100598/data/recentworkforcestudiesnov09.pdf Beider. (2004). Limiting Tort Liability for Medical Malpractice. Retrieved from http://www.cbo.gov/ftpdocs/49xx/doc4968/01-08-MedicalMalpractice.pdf Boodman, S. G. (2004, September 20). Insuring controversy: When malpractice premiums jump, some docs ask patients to 'donate' to the cause. Washington Post. Retrieved from http://www.washingtonpost.com/wp-dyn/articles/A36957-2004Sep20.html Buppert, C. (2011). Nurse Practitioners Business Practice and Legal Guide. Sudbury, MA: Jones and Bartlett Publishers. Congressional Budget Office (CBO) Director. (2009,Oct. 9). CBOs Analysis of the Effects of Proposals to Limit Costs Related to Medical Malpractice (Tort Reform) Retrieved from http://cboblog.cbo.gov/?p=389 Congressional Budget Office (CBO). (2009, Oct. 23). H.R. 3596, Health Insurance Industry Antitrust Enforcement Act of 2009 (CBO Cost Estimate) Elmendorf. (2009). CBO's Analysis of the Effects of Proposals to Limit Costs Related to Medical Malpractice ("Tort Reform") Retrieved from http://www.cbo.gov/ftpdocs/106xx/doc10641/10-09-Tort_Reform.pdf Gawande, A. (2005, November 14). The Malpractice Mess: Who pays the price when patients sue doctors? Retrieved from http://www.newyorker.com/archive/2005/11/14/051114fa_fact_gawande?currentPage=all Health Care Expenditures per Capita by State of Residence, 2004 http://www.statehealthfacts.org/comparemaptable.jsp?cat=5&ind=596 Howard, P. K. (2009, October 15). Why Medical Malpractice Is Off Limits. Retrieved from http://online.wsj.com/article/SB10001424052970204488304574432853190155972.html Institute of Medicine (IOM). (2001). Crossing the QUALITY Chasm - A new health system for the 21st century (report brief). Kasprak. (2008). Nurse Malpractice. Retrieved from http://www.cga.ct.gov/2008/rpt/2008-r0483.htm Klick, J., & Stratmann, T. (2010). Medical malpractice reform and physicians in high-risk specialties. Journal of Legal Studies, 36: S121. doi:10.2139/ssrn.453481 McCarthy, K. (2010, March 5). Would medical malpractice reform fix our health-care system? Retrieved from http://news.consumerreports.org/health/2010/03/would-medicalmalpractice-reform-fix-our-healthcare-system.html McClellan, F. (2006). Medical malpractice law, morality and the culture wars: A critical assessment of the tort reform movement. Journal of Legal Medicine, 27: 1. Retrieved from http://www.lexisnexis.com.proxycu.wrlc.org/hottopics/lnacademic/? McCullough, Campbell & Lane. (2007, June 27). Summary of Medical Malpractice Law, Texas. Retrieved from http://www.mcandl.com/texas.html

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McQuillan, L. J. (2009, October 29). CBO Underestimates Benefits of Malpractice Reform. Retrieved from http://online.wsj.com/article/SB10001424052748703573604574491690229571588.html Mehlman, M. J. (2006). The shame of medical malpractice. Journal of Legal Medicine, 27: 1 Retrieved at http://www.lexisnexis.com.proxycu.wrlc.org/hottopics/lnacademic/? Mello. (2006). Understanding Medical Malpractice - A Primer. Retrieved from http://www.rwjf.org/pr/synthesis/reports_and_briefs/pdf/no8_primer.pdf Naylor, M. D., & Kurtzman, E. D. (2010). The role of nurse practitioners in reinventing primary care. Health Affairs, 29(5): 893-899. doi: 10.1377/hlthaff.2010.0440 Peterson, B. (2006). The malpractice surcharge: A simple answer to rising malpractice rates or a greater threat to quality patient care? Journal of Legal Medicine, 27: 1. Retrieved from http://www.lexisnexis.com.proxycu.wrlc.org/hottopics/lnacademic/? Studdert. (2006). Claims, Errors, and Compensation Payments. U.S. General Accounting Office (GAO). (2003). Medical malpractice: implications of rising premiums on access to health care 6. Retrieved from http://www.gao.gov/new.items/d03836.pdf White & Hagen (2006). Medical Malpractice Tort Limits and Health Care Spending Retrieved from http://www.cbo.gov/ftpdocs/71xx/doc7174/04-28-MedicalMalpractice.pdf WSJ (2008, December 1). Messing With Malpractice Reform. Retrieved from http://online.wsj.com/article/SB122809479886668021.html

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