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Analysis of New Studies on Medical Malpractice: Restricting Patients’ Legal Rights Has Little Relation to Physician Supply

June 1, 2005

Analysis of New Studies on Medical Malpractice: Restricting Patients’ Legal Rights Has Little Relation to Physician Supply

Otherwise, Impact on Quality of and Access to Health Care Remains Unknown

WASHINGTON, D.C. – With the release of several academic studies this week on medical malpractice, medical liability law and physician reaction to the perceived threat of being sued, Public Citizen offers the following initial appraisals from the consumer and patient perspective. Ultimately, what’s most important in the debate over medical malpractice is encouraging the best outcomes for patients while preserving victims’ rights to seek full compensation for injuries suffered, Public Citizen believes. In examining medical liability, these studies generally do not address patient care, the impact on patients or their families of restricting the ability to recover damages, or the effect the legal system can have in serving to deter bad outcomes.

1) Impact of Malpractice Reforms on the Supply of Physician Services,Journal of the American Medical Association, June 1. This study finds, on the surface, a very modest association between overall number of physicians and changes in a state’s medical liability law. But upon closer examination, the study fails to take into account important factors that can significantly influence where a physician decides to practice:

  • The study controlled for factors such as population growth, political orientation of a state’s governor and legislature, and number of medical residents. But it should also have included other factors that can be significant, if not determinative, such as cost of living, quality of life, taxation, quality of schools and health of the local population. California, for example, has the strictest limits on malpractice awards, yet the California Medical Association found 43 percent of doctors it surveyed in 2001 planned to leave practice within three years.
  • The study’s finding of additional doctors in states that have enacted “direct” medical liability changes – that is, changes affecting patient recovery of damages directly – was quite modest, only 3.3 percent. This is for the period 1985-2001, a time when the overall physician population grew by about 65 percent. By itself, the 3.3 percent figure does not suggest what the proper number of doctors should be, nor does it address the quality of or access to health care that patients should be entitled to receive. 
  • The study’s principal finding was differences in rates of growth among states. It did not find a loss of physicians in states that have not enacted liability law changes. Even in states without changes, there was strong growth in the number of physicians.
  • Other medical liability law changes that states have made – that is, “indirect” changes that don’t directly affect how much patients can be granted in damages – were associated with smaller, not larger, growth in physician supply. Such indirect changes include restricting patients’ lawyers’ fees or requiring that damages be paid over time.
  • As the authors acknowledge, the study’s approach “has significant limitations.” Perhaps the most important is that the study does not take into account what happened prior to the study period. The authors say: “We cannot exclude the possibility that the increase in physician supply we observed in states adopting reforms during our study period was simply a consequence of those states having more room for growth, because those states had fewer physicians (initially). We controlled for differences in baseline levels of supply but not for differences in baseline growth rates in supply.”

2) “Have State Caps on Malpractice Awards Increased the Supply of Physicians?,” Health Affairs, June 1. This study finds an even smaller association between restricting patients’ legal rights and the number of doctors in an area – a 2.2 percent increase in the supply of physicians between 1985 and 2000 in counties that are part of states that have restricted legal rights. But it veers off course in flatly asserting a direct causal relationship its data don’t support:

  • This study assembles different variables in an effort to explain the impact of award caps on number of doctors. This is standard research practice. But the report conclusively states that caps cause an increase in the supply of physicians – something this kind of modeling cannot establish. This assertion comes despite a limitation similar to one noted above, as the authors acknowledge that data limitations mean they could not examine the impact of any liability law changes enacted before their study began.
  • This study claims to include more variables that could account for a doctor’s decision about where to locate, such as tax rates or cultural factors. But it is not spelled out in the study, or in supplementary material available on the Internet, what these variables were or how accurately they capture the effects involved.

3) “Defensive Medicine Among High-Risk Specialist Physicians in a Volatile Malpractice Environment,” Journal of the American Medical Association, June 1. This research, based on a mail survey of physicians in specialties claimed to be at high risk of litigation, looks at whether doctors’ anxiety over being sued causes them to practice “defensive medicine.” The survey defined defensive medicine as performing unnecessary tests or making unneeded referrals, plus avoiding difficult procedures or patients thought to be litigious. Ninety-three percent of 824 physicians responding reported practicing defensive medicine.

The report has a major limitation because it is based on a self-selected group of respondents who are probably more likely to report practicing defensive medicine than doctors who did not choose to respond. As the authors note: “Physician self-reports of defensive medicine may be biased toward giving a socially desirable response or achieving political goals.” As a 1994 study on defensive medicine from the Congressional Office of Technology Assessment said: “If physicians are asked how often they practice defensive medicine in survey questionnaires, they may be inclined to respond with the answer most likely to elicit a favorable political response and thus exaggerate their true level of concern about malpractice.”

  • The report is also based on physician specialties in a single state (Pennsylvania), meaning its findings may not be generalizable to other locations, the authors say.
  • Echoing previous survey findings, this report found no link between individual physicians’ tendencies to practice defensive medicine and those doctors’ own liability experience and exposure. Thus, rather than acting on the reality of their own personal history in such matters as being sued or obtaining malpractice coverage, physicians may instead be acting more out of “collective anxiety.”

“These reports once again underscore the fact that lawsuits are not responsible for rising medical malpractice insurance costs and are not driving doctors away from any state,” said Public Citizen President Joan Claybrook. “Like all Americans, doctors choose to live in a particular place because of such things as   the quality of life, level of taxation and the quality of educational opportunities for themselves and their families. Caps punish the most severely injured patients and do nothing to reduce insurance rates.”

A fourth study released this week echoes earlier research by Public Citizen. “The Growth of Physician Medical Malpractice Payments: Evidence from the National Practitioner Data Bank,” also appearing in the June 1 issue of Health Affairs, says the growth of malpractice payments made on behalf of doctors is less than previously thought and is consistent with increases in the cost of health care itself. Focusing on courtroom judgments is misleading, because judgments – versus settlements between parties – account for fewer than 4 percent of cases, the study said. Malpractice payments as a fraction of national health care spending have not risen significantly, it said.

In April, Public Citizen released its report, “Medical Malpractice Payout Trends 1991-2004: Evidence Shows Lawsuits Haven’t Caused Doctors’ Insurance Woes.”It found that malpractice payouts to patients have been flat since 1991 and show a significant decline since 2001, when the so-called “crisis” of escalating malpractice insurance rates began. It also found that the medical liability system is not one of “jackpot justice,” in which patients go to court and score big awards based on flimsy claims. Instead, those with minor injuries receive little compensation, while the great bulk of malpractice awards are for cases involving major, debilitating injuries, or death.

To read Public Citizen’s April report, click here.