AARP on Medical Malpractice Reform

AARP wants malpractice reform that focuses on consumers

· It’s not just physicians who need malpractice reform. Consumers injured by medical errors are also served badly by the tort system, and real reform requires going beyond the doctor vs. lawyer debate.

· The tort system does a poor job of compensating people injured by medical errors. It is slow, expensive, and most injured people get nothing at all. 

· The tort system also encourages providers to cover up mistakes in order to avoid lawsuits, rather than report errors in order to learn how to prevent them.

· Consumers need reforms that will ensure that injured people get fair compensation and that errors are reported so we learn how to prevent them.

We need to move beyond the debate over caps

· Proposals to set unreasonable limits on pain and suffering awards do not help injured people get compensation or reduce errors.

· In fact, in the current system, such caps could make it even harder for people who are injured to get fair compensation. And they are unfair to older people with limited income potential who thus get little in economic damage.


Real reform should lead to fair compensation and error reduction


· The Institute of Medicine (IOM) has proposed demonstration projects to test reform designed to fix what’s broken for consumers.

· IOM has proposed testing non-judicial, no-fault alternatives to the tort system for medical errors (but not for other types of harm to patients, such as nursing home negligence). 

· These alternatives could foster fair compensation and error reduction -- the goals of consumer-oriented reform. 

Compensation could be fast and fair

· Under the IOM proposal, people with legitimate cases of medical injury could be identified and compensated appropriately.

· Payments would be based on “avoidability” of errors rather than “negligence.”

· Amounts would be preset in schedules for specific categories of errors, which would provide reasonable limits that may help stabilize malpractice premiums.

· Providers would have to report errors and make payments promptly, which would help injured people get fair compensation.

Errors could be reduced so fewer people would be injured


· By requiring providers to report errors, the IOM claims that experts would be able to analyze system-wide errors and find ways to prevent them.

· The result could be a system in which patient safety is continually improved.

· With fewer errors, the cost of compensating injured people could decline. 

These tests involve explicit trade-offs that require careful consideration

· Consumers could get fast, fair and sure payment by giving up jury trials.

· Providers could get reasonable limits on financial exposure for reporting and prompt payment.

· AARP believes that, before major changes are made to the current system, it is worth testing these trade-offs for reform that could:

o stabilize malpractice premiums, 

o ensure fair compensation, 

o reduce errors and promote patient safety, and 

o reduce total costs over time.


The Institute of Medicine Tort Reform Demonstration Proposals


The Institute of Medicine (IOM) is calling for demonstrations to test no-fault, non-judicial systems for medical malpractice. These would replace the existing tort system with administrative systems. The IOM proposes two specific models:

Ø Provider-Based Early Payment: The Federal government would reinsure self-insured or experience-rated provider groups that agree to identify and promptly compensate patients for avoidable injuries.

Ø Statewide Administrative Resolution: States would grant all health care providers immunity from most tort liability in exchange for mandatory participation in a state-sponsored system to compensate patients for avoidable injuries.

The IOM approach involves explicit trade-offs for both providers and consumers. In these demonstration projects, consumers would trade jury trials for faster, fairer and surer compensation. Providers would trade mandatory reporting and prompt payment for reasonable limits on financial exposure. 

Compensation would be based on “avoidability” of errors instead of “negligence.” Awards would be preset for specific categories of errors, providing the stability needed to contain malpractice premiums more fairly than the unreasonable caps on non-economic damages that are commonly proposed. A specific objective of the demonstrations would be to determine the total cost of fairly compensating injuries outside courts. That would also help identify the total dollar benefit of reducing avoidable injuries and a way to track improvements and savings over time. In such an alternative system, IOM believes case resolution would be much faster and administrative costs would be much lower. The Institute contends that honesty, transparency, and trust in the doctor-patient relationship would be promoted. And, substantially more injured patients could be compensated. In fact, because of that, the IOM says reasonable award limits tailored to error categories are “an essential attribute of any affordable non-judicial system.”

The explicit trade-off between reasonable caps and mandatory reporting for providers is critical to the IOM approach. It replaces negative incentives that now encourage providers to hide errors and practice defensive medicine with positive incentives to report and reduce errors through evidence-based methods. That could bring stability and predictability to the system and lower costs for both liability insurance and overall health care spending. And, importantly, it creates a system in which patient safety is continually improved. Forgoing the determination of fault, says the IOM, will thus help rather than harm quality.

Unlike traditional tort reform proposals such as unreasonable caps, the IOM demonstration projects are designed to compensate substantially more injured consumers and establish incentives and systems for continual quality improvement that could lead to fewer injuries. 

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