Health Reform’s Impact on Litigation

As the American sphere of healthcare innovation progresses, the political and commercial background that facilitates the implementation of procedures and techniques to reduce adverse health outcomes has become a realm of discord and controversy. Because medical advances in America operate under a strict regulatory environment, perturbations in bureaucratic contexts disrupt beneficial movements in the medical sphere.

More recently, the Congressional gridlock stemming from the inability to reach a functional compromise in dispersing health insurance has increasingly diminished the ability of healthcare providers to maneuver the logistics of healthcare. Physicians are mired in confusing, contradictory policy shifts at the federal and state level. The inefficiencies from the highest levels of policymaking then trickle down into individual hospitals and practices, affecting every patient at the individual level. Indeed, a nationally representative survey conducted by the Deloitte Center for Health Solutions reported that only fifty percent of the surveyed physicians had ever heard of the Obama administration’s revolutionary health reform in 2015 for physician reimbursement, known as MACRA1. Unfortunately, the changing health policies have not only created turbulent financial waters, in terms of insurance policies, for physicians to navigate, but have also redesigned the litigatory landscape that physicians must navigate.

Figure 1. An Advertisement Using Easy Pay to Attract Customers2

Dramatic shifts in healthcare policy can help explain the recent explosion general malpractice claims through the country. A study by RAND in 2014 quantifies this impact, estimating a $120 million increase in medical malpractice claims as a response to healthcare reform law3. As legislators continue to revise existing healthcare policies, lawyers can more easily exploit legal loopholes for patients and, as an unintended consequence, undermine the physicians who tried to save their lives. Indeed, the US Chamber of Commerce indicated that these effects are materializing in the real world as advertisements looking for potential malpractice lawsuits increased by 1,400% because of their promise of an easy payday4.

In state legislatures, the issue of malpractice lawsuits, as a consequence of insurance reform, are neglected. Only six states have holistic caps, limits on economic and non-economic damage payouts, for medical malpractice cases, while 19 states have no cap at all5. Without a legislated restriction on predatory litigation targeting physicians, the complications of defensive medicine, the phenomenon in which physicians recommend excessive diagnostic tests and treatments to reduce legal liability, will only be exacerbated, harming the healthcare providers, patients, and economy in one fell swoop. Furthermore, healthcare reform will magnify defensive medicine regardless of the actual direction of medical litigation claims; physicians aggressively practice defensive medicine when they perceive an increase in their liability risk, a common concern generatedby healthcare reform6.

As healthcare reform progresses into its uncertain future, it is essential that improving quality and access constitute the fundamental goals of reform; however, that end is unachievable if healthcare providers must combat legal challenges along with their medical challenges. Consequently, any attempts to implement an equitable health insurance policy without the unintended consequence of commercial exploitation, federal and state legislators need to include tort reforms that both prevent patients and lawyers from taking advantage of employees in the healthcare sector and assuage physicians’ fears of malpractice lawsuits.

Sources:

1. Copeland, B., Phelps, A., & Cruse, C. B. (2017, July 11). MACRA: Disrupting the US health care system at all levels. Retrieved from https://www2.deloitte.com/us/en/pages/life-sciences-and-health-care/articles/macra.html

2. [Advertisement for Malpractice Lawsuits]. (2015, July 26). Retrieved September 22, 2017, from https://www.youtube.com/watch?v=X_kAsEWMcUE

3. Demko, P. (2014, April 14). Reform Update: Obamacare will boost malpractice claims, RAND study says. Retrieved from http://www.modernhealthcare.com/article/20140414/NEWS/304149963

4. Trial Lawyer TV Ads for Medical Malpractice Lawsuits Grew 1,400 Percent in Last Four Years, Study Shows. (2009, September 7).  Retrieved September 22, 2017, from https://www.uschamber.com/press-release/trial-lawyer-tv-ads-medical-malpractice-lawsuits-grew-1400-percent-last-four-years

5. Fact Sheet: Caps On Compensatory Damages: A State Law Summary. (2017, June 22). Retrieved from https://centerjd.org/content/fact-sheet-caps-compensatory-damages-state-law-summary

6. Seabury, S., Jena, A.B. (2016, May 16). Why do so Many Doctors Practice Defensive Medicine? Maybe Because it Works. Retrieved from http://evidencebase.usc.edu/why-do-so-many-doctors-practice-defensive-medicine-maybe-because-it-works/

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