AMA Calls on Congress to Reform Dysfunctional Medical Liability System

The AMA says now is the time for a national solution to an ineffective, and often unfair, mechanism for resolving medical liability claims.

In a statement to the US House of Representatives Committee on the Judiciary, AMA Chair Ardis Hoven, MD, said that our current litigation system is “an ineffective, and often unfair, mechanism for resolving medical liability claims” and called on Congress to enact a federal approach to resolving medical liability cases.

Saying the system is increasingly irrational and inefficient and “driven by time-consuming litigation and open-ended non-economic damage awards,” Hoven noted that things have gotten so bad that one AMA report found that there are now “an average of 95 medical liability claims filed for every 100 physicians, almost one per physician.” The statement also notes that more than 60% of physicians over the age of 55 have been sued for malpractice, and that the number of claims per 100 physicians is “more than five times greater for general surgeons and obstetricians/gynecologists than it is for pediatricians and psychiatrists,” reflecting the wide variation in liability between medical specialties.

Other statistics and claims made in the statement include:

  • Although 64% of medical liability claims in 2009 were dropped or dismissed, defense costs for these averaged more than $26,000 per claim (with dropped claims accounting for 35% of total defense costs).
  • Defense costs for claims that were tried in court “averaged over $140,000 per claim for defendant victories and over $170,000 for plaintiff victories.”
  • The practice of defensive medicine adds billions of dollars to health care costs, with one study estimating the cost of defensive medicine to be between $70 and $126 billion per year.
  • The Department of Health and Human Services has estimated that Medicare spending alone “would have been reduced by $17 to $31 billion per year with comprehensive liability reforms, including but not limited to reasonable limits on non-economic damages.”
  • The Congressional Budget Office has estimated that “nationwide implementation of medical liability reforms, including caps on non-economic damages, would reduce total US health care spending by about 0.5 percent, or $11 billion,” reforms that would reduce federal budget deficits by “$54 billion over the next 10 years.”

All of this wasted and misallocated money adds up. According to Hoven’s statement, “Every dollar that goes toward medical liability costs and defensive medicine is a dollar that does not go to patients who need care, nor toward investment in patient safety and quality improvements or health information technology systems.”

Hoven said that the AMA favors comprehensive liability reform based on California’s Medical Injury Compensation Reform Act of 1975 (MICRA) and similar comprehensive medical liability insurance and tort reforms enacted in Texas. Components of MICRA that the AMA would like to see adopted on a national scale include caps on non-economic damages of $250,000 for injured patients (coupled with unlimited economic damages), the establishment of “reasonable statutes of limitations” for filing claims, and creating a sliding-scale for attorney contingent fees, which would maximize the recovery for patients.

The statement calls for the introduction of the “Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 (similar bills have been proposed in previous sessions of Congress). The HEALTH Act “would help repair the medical liability system, while ensuring that patients who have been injured receive just compensation,” by providing “the right balance of reforms by promoting speedier resolutions to disputes, maintaining access to courts, maximizing patient recovery of damage awards with unlimited compensation for economic damages, while limiting non-economic damages to a quarter million dollars.” Although the AMA calls for a national approach to liability reform, this statement notes that the HEALTH Act would allow states to retain and/or implement “greater procedural and substantive protections for physicians than those provided under the HEALTH Act,” protects current and future state cap laws on economic, non-economic, and punitive damages “regardless of whether the amount is greater or lesser than $250,000,” and protects “any issue addressed under state law (eg, standards of care) that is not addressed in the HEALTH Act.”

The statement concludes by calling on Congress to take the necessary steps to “increase access to medical services, reduce the defensive practice of medicine, improve the patient-physician relationship, help prevent avoidable patient injury, support physician practices and the jobs that they create, and curb the single most wasteful use of precious health care dollars—the costs, both financial and emotional, of health care liability litigation.”

Tell Us What You Think!

Do you have confidence in the AMA's ability to effect change in this area?

Can California's experience with MICRA be reproduced in other states?

In your opinion, what is the most important step we can take to reduce the effects of so-called "defensive medicine" and decrease the risk associated with medical practice?

Does the medical profession do enough to identify, discipline, and/or censure the small number of physicians who account for the majority of malpractice claims?

Do you favor the adoption of tort reform proposals other than those put forth by the AMA?