Beyond MICRA: New Ideas for Liability Reform

IN RESPONSE:

Mr. Uzych criticizes the College's position in support of liability reforms that are based on MICRA. These criticisms are misplaced.

Independent analyses have found that traditional tort reforms, such as those called for by the College, have reduced the direct costs of medical malpractice [1]. In fact, liability insurance premiums in California have stabilized since the implementation of these reforms. Moreover, traditional tort reforms will provide a measure of stability and predictability to an otherwise out-of-control system [2].

Whether implementation of these reforms would impede the ability of an injured person to receive compensation, as Mr. Uzych suggests, is open to question. Studies have shown that plaintiffs often sue physicians on the basis of the interpersonal relationship between the parties [3], general dissatisfaction with the health care system, whether an attorney advertises on television, and the claimant's financial circumstances [4]. The imposition of reasonable limits on attorney fees would not affect these factors. Moreover, because the existing system spends 60% of its revenue on administrative costs, primarily for attorney fees, these limits could result in injured persons receiving a larger percentage of an award.

The disassociation between malpractice suits and quality of care makes physicians feel they must perform tests they would otherwise consider unnecessary. Although no agreement exists on the total cost of this “defensive medicine,” it is embedded in our health care delivery system. In fact, most physicians say they perform extra tests to protect themselves from lawsuits [5]. Even if these procedures account for only 5% of all health costs, in a health care system that spends $1 trillion annually, the total would be $50 billion—enough money to cover the uninsured.

Despite his unfounded criticism of the College's approach, Mr. Uzych correctly identifies the goals of a liability system: how to ensure that injured persons receive compensation and how to prevent injuries. Unfortunately, the existing system does neither. Instead, it perpetuates a grossly inefficient method of dispute resolution, hurts the physician–patient relationship, and increases health costs.

For this reason, the College has also advocated the creation and funding of demonstration projects to test no-fault and enterprise liability approaches. As the position paper explains, these approaches have shown promise and could remedy the inherent flaws in the current liability system. They are consistent with changes in health care delivery and integrated approaches to quality improvement. Moreover, these approaches will reduce the tension the existing system creates between the physician and patient.

Pilot projects incorporating these ideas are being developed, and we look forward to their results. Ultimately, what we learn will help policymakers develop a liability system that prevents injuries and efficiently compensates those who are hurt, without imposing undue burdens on physicians.

• Copyright ©2004 by the American College of Physicians