Medical malpractice: What remedy?

Claims for clinical mistakes have been rising in both number and amounts of compensation sought over recent years. What can be done?
OECD Observer
In October 2006, 16-year-old Lisa Norris died at home in Scotland after receiving 17 overdoses of radiation treatment for a brain tumour. Nearly 200,000 people could be dying each year in the US because of in-hospital medical errors, suggests a 2004 study by healthcare company Health Grades. According to a recent survey conducted for the European Commission by Eurobarometer, four out of five Europeans think that medical error is an important issue in their country, and nearly one in four said that they or a member of their family had been personally affected by clinical mistakes.
Medicine is supposed to cure; when instead it kills or injures, front-page headlines soon convey the dismal tidings. When medicine does its daily job correctly, there is no news to report unless a spectacular–and preferably simple to explain–breakthrough is involved.“Someone’s got to be summonsed,” said Mrs Ramsbottom in a humorous poem by Marriott Edgar, when her son Albert was swallowed by Wallace the lion at Blackpool zoo. Today, hospitals, doctors, health claims insurers and politicians in many of the world’s wealthiest countries are convinced that patients and their lawyers are seized by a similar compulsion whenever treatment goes wrong.The talk is all of massive payouts for trivial claims, huge legal bills, escalating insurance premiums, and the withdrawal of health practitioners and insurers from high-risk specialities such as obstetrics and neurosurgery. This in its turn is fuelling on-going calls for legal reforms that can limit the frequency and costs of litigation and keep premiums within bounds. There have been high-profile campaigns on this issue in the US, for instance, and some states have already legislated in this area.A recent report by the OECD Insurance and Private Pensions Committee, Medical Malpractice: Prevention, Insurance and Coverage Options, notes that claims for clinical mistakes have been rising in both the number and amounts of compensation sought over recent years. In the US, the most striking example, claims have increased nearly 10% annually since 2000, and total damages awarded in 2004 reached $28.7 billion.In Austria, damages awarded rose 50% between 2002 and 2003, while in Japan the number of new malpractice suits filed at first instance courts more than doubled between 1990 and 2000. Meanwhile, one of Australia’s providers of medical compensation insurance, UMP/AMIL, was put into provisional liquidation in 2002.Largely because of the increase in claims since 2000, insurance profits in this sector have slumped, and in some cases insurers have made net losses on this branch of their business. For instance, there were overall loss ratios of around 190 in Austria and 250 in Italy in 2003, and 145 in the US and 112 in Greece in 2002.The OECD report suggests that the above trends are producing three main adverse effects in a number of countries. The first of these is a reduction in the market offer of health compensation insurance, including restrictions on cover and withdrawals from the sector. For example, the St Paul group withdrew dramatically from US and European markets in December 2001.The second effect is a reduction in some instances in the numbers of practitioners willing to work in specialised disciplines for which it is difficult to find insurance cover, and/or in regard to which premiums have risen particularly steeply. For example, premiums for disciplines such as obstetrics and gynaecology have more than doubled since 2000 in some US states. Also, a 2004 survey by the Society of Thoracic Surgeons in the US showed that more than 30% of cardiothoracic surgeons questioned had relocated, closed their practices or stopped providing high-risk services, in large part because of increased liability costs.The third effect is the development of defensive medicine to reduce the risk of litigation. This leads doctors to call for more tests than necessary, prescribe more drugs, refer to specialists when not particularly useful, or even recommend invasive procedures, such as biopsies to confirm diagnoses. These measures have a cost and may even involve risks for patients. According to a survey by Harris Interactive in 2004, 76% of doctors in the US stated that their concern about possible malpractice litigation had impaired their ability to provide quality care to patients and had caused them to practice defensive medicine. Going further, a report issued by the US department of Health and Human Services (HHS) in 2003, showed that money spent on defensive medicine is money not spent on improving the quality of care.The above considerations do not necessarily present the whole picture, though. The fact that the sums claimed and awarded are rising does not mean simply that litigants are putting in inflated claims. In part, this trend reflects factors such as the increasing cost of medical care. Also, despite anxiety about the creation of a “compensation culture”, most patients do not sue their doctors and hospitals.Moreover, hikes in insurance premiums are often dictated in part by general market movements and may to some extent be cyclical in nature. In his book, The Medical Malpractice Myth, Tom Baker, Director of the Insurance Law Center at the University of Connecticut School of Law, argues that high-profile cases such as medical malpractice suits are far less important in dollar terms than more run-of-the-mill claims such as auto accidents or workers’ compensation. He points out that in 2003 US businesses paid $27 billion for auto liability premiums and $57 billion for workers’ compensation insurance premiums, whereas health professionals paid only around $11 billion in total in medical malpractice premiums.Mr Baker calculates that this means an average annual premium (in 2003) of around $12,000 per doctor, though he admits that some practitioners have to pay much more. He also suggests new procedures that would allow patients to find out what caused their injuries without having to sue first.Medical malpractice law and coverage provisions vary considerably between countries. For instance, in many jurisdictions, liability depends on fault, though this concept is interpreted differently in different places, and some countries such as Finland, Denmark, Sweden and New Zealand have introduced no-fault compensation systems of varying types. Also, cover may be provided by a variety of organisations including commercial insurance companies, not-for-profit mutuals and state-run guarantee systems. Accordingly, even though the basic issues concerning compensation and cover for medical errors are similar throughout the OECD area, it would be difficult to suggest standard solutions. A number of options are, however, available.For instance, the recent OECD report on medical malpractice coverage suggests several alternatives. One of the more radical of these is to replace fault-based liability with a comprehensive no-fault system. Issues to be considered in this context include the possible increased costs related to this change and the transitional period according to national circumstances, as well as how compensation is to be triggered, what types of damages should be awarded, and whether the scheme should be financed through taxation, levies on health practitioners and/or market mechanisms.
 
Another approach is to retain fault-based litigation (tort or civil liability law), and to fine-tune litigation procedures and insurance provisions. Possible measures include alternative dispute resolution such as arbitration and ombudsman facilities. In addition, damages can be capped, time-limits for starting proceedings can be tightened, and clearer legislative distinctions can be made between easily and less-easily avoidable injuries.Measures can also be considered to buttress insurance cover for medical injury awards. For instance, non-profit bodies, such as medical defence organisations, can be encouraged to develop more private alternative financing mechanisms, particularly for doctors who cannot find adequate coverage within the standard insurance market. In exchange, these practitioners would agree to apply best medical practice standards.The introduction of dedicated funds and/or insurance and reinsurance pools aimed at covering high-cost claims or particularly “bad risks”(such as health care establishment or high-risk specialties), could also help to improve the insurability of medical liability and to enhance the insurance market capacity in this branch.However, much more important than any of the above is the implementation of medical risk management procedures that reduce the chances of error occurring in the first place. The mistakes that most frequently occur are often relatively simple matters, such as accidentally giving the wrong drug or failing to diagnose an underlying condition that is hidden by another one.The results of such errors can be dramatic. For instance, in one case in England a three-year-old girl had fallen prey to a flesh-eating bug, but this was not spotted at first because she also had chickenpox. Adequate review procedures and an environment that encourages voluntary reporting of mistakes figure highly on the list of measures that can help.References
  • OECD (2007), Medical Malpractice: Prevention, Insurance and Coverage Options, Paris.
  • Baker, T. (2005), The Medical Malpractice Myth, University of Chicago Press, available at www.press.uchicago.edu
  • Cull H. (2001), Review of processes concerning adverse medical events, Wellington: Ministry of Health.
    GAO (Government Accountability Office) (2003), Malpractice Insurance: Multiple Factors Have Contributed to Increased Premium Rates, June.
  • HHS (2003), Addressing the new health care crisis: Reforming the medical litigation system to Improve the Quality of care, HHS, May.
  • HOPE (Hospitals of the European Union) (2004), Insurance and Malpractice, Final Report, Brussels, 12 April. 
  • Institute of Medicine, research by L. T. Kohn et al. (1999), To Err is Human: Building a Safer Health System, National Academy Press, Washington.
Visit www.oecd.org/dafFor more detail on OECD work in medical malpractice insurance, contact Flore-Anne.Messy@oecd.orgTribute: This article was written by our dear friend, Michael Rowe, who passed away suddenly in April 2007 following a major operation. Michael was a well-known and highly respected journalist, with many friends in media circles in France and beyond. Unlocking difficult issues for wider audiences was his great gift, which he performed with a fluid, natural writing style. Michael was an expert in tax, for instance, and apart from many a serious article (including one or two for this magazine), freelance journalists working in France will remember him for his brilliant little guide, “Tax for Hacks”. He was also a great lover of Spain. ¡Adiós, Michael! ~ RJC
 ©OECD Observer 2007


Economic data

E-Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Suscribe now

<b>Subscribe now!</b>

To receive your exclusive print editions delivered to you directly


Online edition
Previous editions

Don't miss

  • “Nizip” refugee camp visit
    July 2016: OECD Secretary-General Angel Gurría visits the “Nizip” refugee camp, situated between Gaziantep and the Turkish-Syrian border, accompanied by Turkey’s Deputy Prime Minister Mehmet Şimşek. The camp accommodates a small number of the 2.75 million Syrians currently registered in Turkey, mostly outside the camps. In his tour of the camp, Mr Gurría visits a school, speaks with refugees and gives a short interview.
  • OECD Observer i-Sheet Series: OECD Observer i-Sheets are smart contents pages on major issues and events. Use them to find current or recent articles, video, books and working papers. To browse on paper and read on line, or simply download.
  • Queen Maxima of the Netherlands gives a speech next to Mexico's President Enrique Pena Nieto (not pictured) during the International Forum of Financial Inclusion at the National Palace in Mexico City, Mexico June 21, 2016.
  • How sustainable is the ocean as a source of economic development? The Ocean Economy in 2030 examines the risks and uncertainties surrounding the future development of ocean industries, the innovations required in science and technology to support their progress, their potential contribution to green growth and some of the implications for ocean management.
  • OECD Environment Director Simon Upton presented a talk at Imperial College London on 21 April 2016. With the world awash in surplus oil and prices languishing around US$40 per barrel, how can governments step up efforts to transform the world’s energy systems in line with the Paris Agreement?
  • Happy 10th birthday to Twitter. This 2008 OECD Observer interview with Henry Copeland said you’d do well.
  • The OECD Gender Initiative examines existing barriers to gender equality in education, employment, and entrepreneurship. The gender portal monitors the progress made by governments to promote gender equality in both OECD and non-OECD countries and provides good practices based on analytical tools and reliable data.
  • Once migrants reach Europe, countries face integration challenge: OECD's Thomas Liebig speaks to NPR's Audie Cornish.

  • Message from the International Space Station to COP21

  • COP21 Will Get Agreement With Teeth: OECD Secretary-General Angel Gurría on Bloomberg

  • The carbon clock is ticking: OECD’s Gurría on CNBC

  • If we want to reach zero net emissions by the end of the century, we must align our policies for a low-carbon economy, put a price on carbon everywhere, spend less subsidising fossil fuels and invest more in clean energy. OECD at #COP21 – OECD statement for #COP21
  • They are green and local --It’s a new generation of entrepreneurs in Kenya with big dreams of sustainable energy and the drive to see their innovative technologies throughout Africa. blogs.worldbank.org
  • Pole to Paris Project
  • In order to face global warming, Asia needs at least $40 billion per year, derived from both the public and private sector. Read how to bridge the climate financing gap on the Asian Bank of Development's website.
  • How can cities fight climate change?
    Discover projects in Denmark, Canada, Australia, Japan and Mexico.
  • Climate: What's changed, what hasn't, what we can do about it.
    Lecture by OECD Secretary-General Angel Gurría, hosted by the London School of Economics and Aviva Investors in association with ClimateWise, London, UK, 3 July 2015.

  • Climate change: “We should not disagree when scientists tell us we have a window of opportunity–10-15 years–to turn this thing around” argues Senator Bernie Sanders.

  • In the long-run, the EU benefits from migration, says OECD Head of International Migration Division Jean-Christophe Dumont.
  • Is technological progress slowing down? Is it speeding up? At the OECD, we believe the research from our Future of ‪Productivity‬ project helps to resolve this paradox.
  • Is inequality bad for growth? That redistribution boosts economies is not established by the evidence says FT economics editor Chris Giles. Read more on www.ft.com.
  • Catherine Mann, OECD Chief Economist, explains on Bloomberg why "too much bank lending can slow economic growth".
  • Interested in a career in Paris at the OECD? The OECD is a major international organisation, with a mission to build better policies for better lives. With our hub based in one of the world's global cities and offices across continents, find out more at www.oecd.org/careers .

Most Popular Articles

Poll

What issue are you most concerned about in 2016?

Unemployment
Euro crisis
International conflict
Global warming
Other

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2016