Liability. To a physician, the word conjures the threat of a malpractice lawsuit and the reality of escalating insurance costs. But some protection may be at hand in the form of several laws recently passed by Congress that aim to relieve both threat and reality.
Hospitalists and Liability
For the time being, the majority of hospitalists are covered by their employer’s liability insurance, according to the cover article in the December 2005 issue of The Hospitalist (“A Malpractice Primer” p. 1). However, that doesn’t mean they’re unaffected by risk of malpractice suits.
—Mary A. Germann, RN, MN, CHE
Mary A. Germann, RN, MN, CHE, certified healthcare compliance officer and founder of Operations Solutions for Healthcare, Inc., a consulting firm based in Atlanta, has answered many liability questions from hospitalists and believes they are at least as worried about the issue as other physicians.
“Hospitalists tend to be concerned about their risk,” she says. “They want to know how to protect themselves. Even though they may not be ‘personally’ at risk, their medical license is still on the line."
Germann explains that hospitalists may in fact be more vulnerable to liability suits than other physicians. “In some ways [hospitalists] are more at risk because they are usually new to their patients,” she says. “They have not had the opportunity to build a relationship with a patient, and must create trust and open communications in a very short time. This weak link can increase a hospitalist’s vulnerability. Lack of information and communication is one of the biggest reasons reported that patients choose to sue.”
With this in mind, let’s take a look at current and pending legislation that will shape liability risk and claims for years to come.
The HEALTH Act of 2005
Passed into law in July of last year, the HEALTH Act (or Help Efficient, Accessible, Low-cost, Timely Healthcare Act), places multiple limits on liability claims. The law caps noneconomic damages in medical malpractice suits at $250,000 for compensating patient injury, limits attorneys’ contingency fees, and requires a finding of malicious intent to support an award of punitive damages. The law also exempts manufacturers and distributors of medical products from punitive damage awards if the U.S. Food and Drug Administration approved the product.
The Patient Safety and Quality Improvement Act of 2005
Also signed into law last July, this act establishes a voluntary, confidential reporting structure for use by physicians, hospitals, and other healthcare professional and entities. This law renders reported medical errors into confidential, privileged data and allows healthcare providers to report their medical errors under a “patient safety activity” umbrella that prohibits the information from being used in a civil action (i.e. liability case). All medical errors reported are covered by the law and not subject to subpoena, Freedom of Information Act request, or use in a disciplinary proceeding.
On reporting medical errors within a hospital system, Germann says, “This is really a joint effort; I don’t think any one entity or organization can do it by themselves. Hospitals have to have a system in place for reporting errors and near misses. Studies have shown that organizations that aggressively support error disclosure have a decreased incidence in the number of suits and a decrease in the compensation payouts.”
The National Medical Error Disclosure and Compensation Act of 2005
Also known as the MEDiC Act, this bill was introduced in the Senate in September 2005 by Senator Hillary Rodham Clinton (D-N.Y.) and Senator Barack Obama (D-Ill.).
Designed to extend the Patient Safety and Quality Improvement Act of 2005 and “promote a culture of safety within hospitals, health systems, clinics, and other sites of healthcare,” this act would establish a federal Office of Patient Safety and Health Care Quality to implement and oversee a new national patient safety database, as well as the MEDiC Program. This program would provide funding to those healthcare providers with systems to disclose medical errors to patients and offer fair compensation to patients if the provider is at fault.
In reducing administrative and legal costs for medical malpractice claims, the MEDiC Act would require participating medical liability insurance companies and healthcare providers to apply a percentage of their savings toward reducing medical errors. The bill also requires that, to the extent possible, some of these cost savings be passed along to providers as lower malpractice insurance premiums.
Although not specifically stated in the bill, a goal of the MEDiC Act is to provide an interim solution to the escalating costs of liability lawsuits.
“I think [medical error reporting] is a very good direction to take,” says Germann. “One of the major barriers to disclosing errors is fear of malpractice suits. To improve quality and decrease medical errors, it’s important for physicians to be able to disclose errors.”
In addition, she stresses that hospitalists and other physicians have little to fear in disclosure. “The majority of errors are not caused by incompetent physicians,” notes Germann. “They are secondary to system failures. Physicians must be able to expose these. And hospitalists see more system errors because they live within the system; they can be a great asset in helping hospital administrators improve quality and systems.”
The MEDiC Act has been under review by the Senate Committee on Health, Education, Labor, and Pensions since September.
So far, 2005 and 2006 have seen big changes in liability reform and in medical error reporting. Together, this legislation—perhaps in conjunction with future laws—will change the risks of liability faced by hospitalists. "No one law is going to solve the entire problem,” says Germann. “All of these together will make the improvements." TH
Jane Jerrard writes “Public Policy” every month for The Hospitalist.