The HEALTH Act of 2011: Another doomed Congressional effort at malpractice liability reform

June 1, 2011

Once more, ob/gyns are being teased with the prospect of federal medical liability reform.

Once more ob/gyns are being teased with the prospect of federal medical liability reform. Such a bill currently is advancing in the US House of Representatives. The legislation, the Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011, HR 5 (112th Congress, 1st session 2010-2011), would introduce major changes, long sought by physicians in general and ob/gyns in particular, that would make a more just and efficient medical tort system.

The Congressional Budget Office (CBO) has reported that if the reforms included in HR 5 reduced malpractice premiums by 10%, total national healthcare spending would be reduced by about 0.5%, or $11 billion per year.1 Enactment also would reduce the federal budget deficit because the Act contains provisions that would decrease spending by Medicare, Medicaid, the Children's Health Insurance Program, and the Federal Employees Health Benefits program. Indeed, it has been estimated that states at the top quintile of malpractice liability insurance payments have 4.2% higher total Medicare spending and 7% higher spending on physicians.2

Moreover, a study by the Massachusetts Medical Society estimates potential cost savings from such medical tort reform measures could be much higher. In a study of nearly 900 physicians, about 83% reported practicing defensive medicine, with an average of 18% to 28% more tests, procedures, referrals, and consultations and 13% more hospitalizations ordered for defensive reasons.3 Such practices were estimated to cost a minimum of $1.4 billion per year in Massachusetts alone. Extrapolating from US Census data, because the commonwealth's population is about 2.1% of that of the nation as a whole, the potential national healthcare savings from tort reform could exceed $50 billion per year.4

The Act's primary components are designed to reduce unjust elements of the current system and insure more equitable awards while discouraging frivolous litigation and predatory practices. Elements include:

The CBO expects that these changes would lower costs for healthcare both directly and indirectly: directly, by lowering premiums for medical liability insurance; and indirectly, by reducing the use of defensive prescriptions for healthcare services by providers pressured by the threat of financially catastrophic and/or career-damaging unjust malpractice suits. Those reductions in costs would in turn lead to lower spending in federal health programs and to lower private health insurance premiums.

The impact on ob/gyns

The American College of Obstetricians and Gynecologists (ACOG) has long supported professional liability insurance reform at the state and federal levels. Leaders of ACOG repeatedly have called on Congress to pass federal reforms and posited that finding an alternative to the tort system for resolving medical malpractice claims is critical to the well-being of the field and for insuring that America's mothers have ready access to obstetricians.

A prime impetus for ACOG's position is its Survey on Professional Liability. The Survey has been performed several times, and was last completed in 2009.5 It asked whether ob/gyns had made any practice changes since January 2006 because of the affordability or availability or both of professional liability insurance and the threat of lawsuits. Of the 5,644 responses to this question, 59.2% reported having made 1 or more changes to their practice.

Of respondents who reported making changes to their obstetric practice as a result of the risk or fear of professional liability claims or litigation, 30.2% decreased the number of high-risk obstetric patients, 29.1% reported increasing the number of cesarean deliveries, and 25.9% stopped offering and performing trial of labor after prior cesarean deliveries. Another 13.9% decreased the number of total deliveries, and 8.0% stopped practicing obstetrics altogether.

The average for all paid claims by responding ob/gyns was $512,049. The average payment for claims involving a neurologically impaired infant was an extraordinary $1,055,222. Other average payments for obstetric claims included "other infant injury-major" ($486,997) and "stillbirth/neonatal death" ($254,280). Average payments for gynecologic claims included "failure to diagnose breast cancer" ($299,467), another major source of emotionally laden but often scientifically unjustified verdicts, and "patient injury-major" ($288,832). Clearly, the emotional and financial tolls exacted by these sad statistics are not sustainable in the long term.5