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AAOS Now

Published 8/1/2008
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Stephen J. Brown, JD, MBA

Legal trends in the evolution of medical risk

The adoption of EMRs and best practices is changing the scene

Medical “risk” generally takes two related forms. The first is the physical risk to patients that medical treatment, therapy, surgery, or drugs will harm them or leave them in a worse position than when they started. This risk is referenced in the goal of any physician to “do no harm.”

The second form of risk is financial and legal, and belongs to the healthcare provider. A patient who has been harmed may file a lawsuit. This second form of risk does not even require actual harm to have been caused, because doctors and other medical care providers may be sued regardless of whether they are truly at fault.

Fortunately, the interests of both patients and healthcare providers are aligned when it comes to lowering medical risk. Steps taken to reduce the likelihood of adverse patient outcomes (or perceived adverse outcomes) will also lessen the likelihood of litigation.

Legally speaking, the risks to patients and to healthcare providers are also closely related. These risks are defined and allocated by the following three elements that must be proven by the plaintiff in any medical malpractice case:

  1. What was the appropriate standard of care, given the medical situation?
  2. Was that standard of care upheld and respected or was a lower standard mistakenly applied?
  3. If a mistake was made, did it actually cause the harm that the patient alleges?

The potential for change
This three-variable legal formula is unlikely to change in the coming decades. The healthcare industry, by contrast, is already experiencing a period of major change and will continue to rapidly evolve over the next 20 years. Information technology and changes in healthcare culture, staffing, operations, and finance, are rapidly evolving. The patient base is also changing, as 78 million baby boomers age and begin to increase their use of healthcare services.

The revolution in medical recordkeeping will probably be the single most important driver of medical and legal change. Improved electronic health records enable greater communication and sharing of information among teams of medical specialists caring for a patient in different locations and at different times.

Gone will be the days when paper records stored at just one office kept healthcare providers in other locations unaware of the patient’s history. Gone will be the days when nurses administered the wrong medication because they couldn’t read the handwriting on the prescription or when the decision to abbreviate a drug’s name on a prescription enabled it to be mistaken for another drug. Doctors will no longer have to depend on a patient’s own memory and records to know what drugs or which inoculations a patient may have received.

As medical records become more modular and standardized, and as medical information technology systems become more integrated, a patient’s complete medical history will be quickly available to every healthcare provider who needs it.

The impact on litigation
This revolution in the availability of information promises to materially improve patient outcomes. The new technology and techniques make it more likely that the proper standard of care for a given situation will be followed. In addition to preventing mistakes, better and more accurate information will also take much of the uncertainty and gamesmanship out of the litigation process.

Electronic medical records not only provide much greater access to information but also create evidence as to who knew what when. A physician who claims not to have known that patient X had been given drug Y can now be faced with electronic evidence of when he or she visited the relevant medical record and what was in that record. A signed paper patient consent that might otherwise have become lost is now irrevocably committed to electronic memory.

The fact that lawyers will have more information may also help defendants. Better information about a patient’s previous injuries and ailments will make it easier for defense attorneys to argue that a plaintiff’s present symptoms were caused by a previously existing condition rather than a recent alleged medical mistake.

Electronic records may also minimize the risks of information abuse inherent in paper-based technology by enabling identification of information abusers. Evolving information systems often employ protective features that not only permit wide sharing of information, but also minimize the risk of over-sharing by ensuring access only by those who need the information. Persons wishing to access sensitive information must leave behind an indelible electronic record of having done so. These security features will assist newer information systems in remaining compliant with various laws ensuring the protection of medical information.

A cultural shift in health care
In part, the improvement in information sharing among a patient’s specialized caregivers is just one component of a larger cultural change that should lower medical risk. This cultural change was demanded by Congress, which recently decided to change the way it funds research grants awarded by the National Institutes of Health. Frustrated with the abstract and arcane research being funded, Congress demanded that future research be of the “bench-to-bedside” variety. Bench-to-bedside research generates practical knowledge that can be used to improve patients’ lives and shared across disciplinary lines.

This shift in emphasis reinforces the need for new forms of information technology. The renewed focus on the patient and on improving the patient’s quality of care should lower medical risk. It should also cause a general revision of what the appropriate standard of care is in malpractice cases. As more information becomes available and easily obtainable, standards of care should become both more stringent and more obvious.

The medical industry is also moving toward creating a standardized body of “best practices” for specific medical situations. By having a “play book” of proven treatments, the healthcare community not only lowers the patient’s risk of receiving suboptimal treatment, but also clearly answers the question of what the standard of care should be for a given situation.

Organizations such as The Joint Commission strive to foster higher, more uniform standards for patient treatment. The Medicare accreditation power given to The Joint Commission by Congress helps ensure that its suggestions will have some level of vicarious statutory authority. This movement toward uniformity of standards attacks medical risk on all sides and is yet another sign of the cultural change taking place within the medical community.

Third-party payors such as health maintenance organizations and insurance companies are also adopting rules and sets of best practices. The power of the purse enjoyed by such private organizations is obviously significant, increasing the probability that such standards will actually be implemented.

Legal culture is changing, too
The legal culture is also changing in a way that transforms medical risk. Malpractice defense lawyers and the doctors and hospitals they counsel have realized that harmed patients might sue, but harmed and angry patients will sue. Healthcare providers have realized that the financial risk to them arising from a medical mistake can, at times, be minimized simply by being forthright with patients about mistakes, apologizing to patients, and outlining corrective steps to ensure the error is not repeated.

For years, lawyers counseled doctors accused of malpractice to admit nothing and to communicate as little as possible with aggrieved patients. This often added insult to injury from the patient’s point of view. Patients accordingly filed lawsuits not only for revenge, but also to call attention to the error so that it would not be repeated.

When a doctor admits an error, and perhaps even presents a plan to an aggrieved patient for preventing future errors, the patient no longer feels that a lawsuit is the only way forward. This new, more honest approach may do much to harmonize patient/healthcare provider relations with the baby-boom generation, which may approve of a forthright approach to mistakes and reward such honesty with fewer lawsuits. Although malpractice defense lawyers once argued that any admission of guilt or culpability would harm their clients, they have realized that an apology may do more good than harm.

Plaintiff’s attorneys have also experienced cultural change, driven, in part, by society’s apparent fatigue with litigation. Plaintiff’s lawyers have realized that their clients would often prefer a prompt, fair, and hassle-free settlement for a reasonable amount of money, rather than an epic 5- to 7-year quest for untold riches.

This dynamic should allow healthcare providers and insurance companies to shift their litigation budgets to the remaining cases and reinforce the movement toward early settlement for reasonable amounts. Plaintiff’s attorneys would learn that being overly aggressive doesn’t pay.

Improving competencies
Both healthcare organizations and patients share a common interest in screening out incompetent medical professionals. During the past 25 years, lawsuits have started targeting not just the doctors who made mistakes, but also the hospitals and other organizations that employed them or that did not take adequate steps to ensure staff competence.

Early attempts to screen doctors and to provide information on their outcome statistics were often met with resistance. This was partly cultural and came from the reservoir of respect and prestige that doctors enjoyed in society. As that social prestige has dropped, patients have become more willing to hold doctors accountable and to demand up-front evidence of actual medical skill before entrusting them with their bodies. This shift occurred just as the information technology (the Internet) developed to enable a wider range of information sharing among otherwise total strangers.

Recent legal controversies have been sparked by so-called “tiered physician networks,” in which managed care organizations and other payors rank physicians by cost and perceived effectiveness. Payors then send “pricing signals” to their enrolled healthcare consumers to show them which doctors are cheaper or more competent. Although such tiering mechanisms may be geared to reducing costs, they may also be used to steer patients away from doctors who raise medical risks.

Physicians have counter attacked with a wave of lawsuits alleging anything from breach of contract to defamation. As attempts to shine more light on medical service providers and their patient outcomes continue, the trend is toward providing more—rather than less—information and transparency. Because a disproportionate amount of medical risk may be generated by relatively few troubled healthcare providers, the movement toward transparency and tiering should do much to reduce risk in general.

These changes are causing the three main questions controlling medical risk to be answered (and to be answerable) in new ways. As a result, medical risk should decline in the future and the risk that remains will be allocated differently.

Stephen Joseph Brown, JD, is an associate in the firm of Seyfarth Shaw LLP. He can be reached at SJBrown@seyfarth.com

Articles labeled “Orthopaedic Risk Manager” are presented by the Medical Liability Committee under the direction of contributing editor Douglas W. Lundy, MD. Comments and input are welcome. E-mail your comments to feedback-orm@aaos.org or contact the contributors directly.