Published 10/1/2010
Manish Sethi, MD; A. Alex Jahangir, MD; Samir Mehta, MD; Adrian Thomas, MD; Carolyn Hettrich, MD

Medical liability reform and HR 3590

By Manish Sethi, MD; A. Alex Jahangir, MD; Samir Mehta, MD; Adrian Thomas, MD; and Carolyn Hettrich, MD

Do medical liability demonstration project awards predict the future direction of reform?

The facts surrounding medical liability and the practicing American physician remain causes for concern. According to an analysis of the American Medical Association’s 2007–2008 Physician Practice Information Survey, for every 100 practicing doctors, 95 active malpractice lawsuits exist. More than 60 percent of physicians older than age 55—and 90 percent of surgeons age 55 or older—have faced a malpractice lawsuit, and the average cost of litigation continues to soar.

HR 3590, the Patient Protection and Affordable Care Act, which was passed by the 111th Congress, will result in the greatest changes in American health care since the administration of President Lyndon Johnson. But although the bill addresses a wide variety of issues—from healthcare information technology to the abuses of the health insurance industry, it does not include any major reforms in the medical liability realm. Section 6801 of the bill does suggest “medical liability alternatives,” but includes no concrete legislative changes.

Through lobbying efforts of the American Association of Orthopaedic Surgeons (AAOS) and its government relations office, as well as other physician associations, the Obama Administration did ultimately set aside $25 million for “Medical Liability Demonstration Projects.” Given that these projects will be funded by the U.S. government and will examine diverse solutions to the medical liability crisis, it is critical that AAOS members know about them and the potential future implications of such research on medical liability reform at both federal and state levels.

Recipients announced
On June 11, 2010, the Department of Health and Human Services (HHS) released the final list of recipients of the HHS Medical Liability Demonstration Projects. Two types of funding were available: large 3-year $3 million demonstration grants to examine wider health system reform proposals relating to patient safety and medical liability, and more targeted 1-year $300,000 planning grants proposing smaller, more specific changes.

A careful examination of the approved demonstration and planning grants provides a sense of the administration’s concept of the future of medical liability reform in the United States. In total, seven large demonstration grants were awarded (Table 1). Three focus on increasing patient safety and limiting medical errors; the other four center on open disclosure of medical errors and novel means of settling malpractice claims, such as the judge-directed negotiation programs currently being used in New York state.

HHS also provided 13 1-year planning grants, some of which investigate the development of “safe harbors” for state-endorsed evidence-based care guidelines, early medical error disclosure, and offers of prompt compensation.

Taken together, these grants provide a window into the current administration’s view of medical liability reform, which centers on improving patient safety initiatives and open disclosure of errors. Although other major contributors to the liability crisis—including frivolous litigation, insurance premiums, and caps on noneconomic damages—are not considered, it is imperative that the AAOS remain abreast of both the progress and ultimate results of these studies, because these results will drive the future of any medical liability reform during the Obama administration.

Orthopaedic surgeons should take steps to learn about any such projects being conducted within their communities.

Manish Sethi, MD; A. Alex Jahangir, MD; Samir Mehta, MD; Adrian Thomas, MD; and Carolyn Hettrich, MD, are members of the Washington Health Policy Fellows.

Editor’s note: This is the fifth in a series of articles on redefining health care in America prepared by the AAOS Washington Health Policy Fellows. The series takes a close look at various aspects of the healthcare reform legislation signed by President Obama earlier this year.

Additional Links:

Ledue, Chelsey. AMA Report: 95 medical liability claims filed for every 100 physicians. Healthcare Finance News. 8/4/2010.

Clarke, Theodore. HHS initiates medical liability demonstration projects, AAOS Now April 2010.

Demonstration Grants

Planning Grants